Judgment Hand Down: Caxton International Limited & Ors v Essity Aktiebolag (Publ) and Essity Capital BV [2025] EWHC 1477 (Ch)

The Judge rejected the Defendants’ argument that there was no serious issue to be tried that a court would grant the Claimants, who were the ultimate beneficial owners of certain loan notes issued by the Defendants, declaratory relief in respect of whether an event of default had occurred under the notes and as to which party was entitled to serve acceleration notices. The notes were intermediated securities held by noteholders in a common custodial structure, via the clearing systems and custodians.

The Judge held that it was no bar to granting the relief sought that the Claimants were not parties to the notes and did not have any direct rights against the Defendants thereunder, and found that the Claimants clearly had a legitimate interest in having the matters in dispute determined as their equitable interests in the notes would be directly affected by the relief sought. The Claimants’ claim for declaratory relief did not contravene the “no look through” principle which applies to intermediated securities.

This is an important decision which clarifies the ability of ultimate beneficial holders of intermediated securities to obtain declaratory relief in respect of those securities.

Tom Smith KC and Annabelle Wang acted for the successful Claimants, instructed by White & Case LLP.

The judgment can be read here.