The English Court of Appeal today gave judgment in NAMA’s favour in relation to the high-profile claim brought against it by Irish entrepreneur Patrick McKillen. The claim forms part of Mr McKillen’s ongoing case in the English Courts against a number of parties, including NAMA, Sir David and Sir Frederick Barclay, and Derek Quinlan.

Mr McKillen had challenged NAMA’s transfer in September 2011 of the debts of Coroin Limited (“Coroin”), the holding company of the Maybourne Hotel Group, to a company owned by the Barclay Brothers, Maybourne Finance Limited (“MFL”). NAMA had first acquired those debts in June 2010.

Mr McKillen alleged that the debt transfer from NAMA to MFL was invalid, arguing that NAMA had failed to comply with a contractual requirement to consult with Coroin before transferring the loans. He also alleged that MFL was not a suitable transferee of the loans.

At a preliminary stage in the English High Court proceedings, the Court was asked to determine whether the underlying loan agreement permitted NAMA to transfer the Coroin loans to MFL without needing to consult with Coroin, and without any restriction on the identity of the proposed transferee. Mr McKillen argued that there was no such right, and that NAMA was obliged to consult, and to have regard to the restrictions on permitted transferees in the loan agreement.

Today, 27 June 2012, the English Court of Appeal delivered a unanimous judgment in favour of NAMA, holding that NAMA was free to transfer the loans without restriction. The Court of Appeal’s judgment was given by England’s most senior Court of Appeal judge – the Master of the Rolls, Lord Neuberger – who overturned the initial decision of Mr Justice David Richards in Mr McKillen’s favour

As a result, the validity of the transfer of the Coroin debt from NAMA to MFL is no longer in question and Mr McKillen has failed to persuade the Courts that the debt should be returned to NAMA. Mr McKillen was ordered to pay NAMA’s costs.

Separately, judgment is still awaited from the English High Court following the trial of the broader issues in Mr McKillen’s case against the Barclay Brothers and others, which was heard between March and May of this year. However, in light of today’s Court of Appeal decision, the decision in that trial cannot now impact on NAMA. 

Commenting on today’s judgment, Brendan McDonagh, NAMA Chief Executive, said:

“I am delighted that the English Court of Appeal has upheld the validity of NAMA’s transfer of the Coroin debt, a transaction which led to a very substantial financial recovery by NAMA”.

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