Saipem S.P.A and others (Respondents) v Petrofac Limited and another (Appellants)

Permission to Appeal application lodged

Case summary
Permission to Appeal
Previous proceedings

Case summary

Case ID

UKSC/2025/0140

Parties

Appellant(s)

Petrofac Limited and Petrofac International (UAE) LLC

Respondent(s)

(1) SAIPEM S.P.A. (2) SAIPEM SINGAPORE PTE LTD (3) SAMSUNG E&A CO., LTD (4) SAMSUNG E&A (THAILAND) CO., LTD

Issue

What is the correct approach to the treatment of creditors who would be “out of the money” (would not receive a payout) in the “relevant alternative” to a restructuring plan sanctioned under Part 26A of the Companies Act 2006?

Facts

This appeal concerns two restructuring plans (the “Plans”) promulgated under Part 26A of the Companies Act 2006 in respect of Petrofac Limited (“PL”) and Petrofac International (UAE) LLC (“PIUL”) (collectively, the “Plan Companies”). Together with their subsidiaries, PL and PIUL comprise the Petrofac Group (the “Group”), a leading international service provider to the energy industry. The Group is experiencing severe financial difficulties. To enable the Group to continue operating as a going concern, the Plan Companies and the wider Group seek to adopt the Plans (the “PL plan” in relation to PL and the “PIUL plan” in respect of PIUL) to effectuate a restructuring. Among other things, this would compromise certain of the Group’s existing debt and provide for the investment of US$ 350 million of new money (the “New Money”). Under section 901G of the Companies Act 2006, the Court has the power to sanction a Part 26A restructuring plan even where a class of creditors dissent to the plan if it is satisfied that none of the members of the dissenting class would not be “any worse off” under the plan than they would be in the event of the relevant alternative. For this purpose, the “relevant alternative” is whatever the Court considers would be most likely to occur in relation to the company if the plan were not sanctioned. Where a restructuring plan is sanctioned under Part 26A notwithstanding the objection of a dissenting class, this is referred to as a “cross-class cram down.” Originally, the Plans were sanctioned by an order of Mr Justice Marcus Smith on 20 May 2025 (the “Sanction Order”). However, two of the Group’s unsecured creditors who dissented to the adoption of the Plans (Samsung and Saipem) appealed the Sanction Order. On 1 July 2025, the Court of Appeal allowed the appeal, setting aside the Sanction Order. The Appellant Plan Companies now seek to establish that the Sanction Order ought not to have been set aside by the Court of Appeal and should accordingly be reinstated by the Supreme Court.