The Corporate Insolvency and Governance Act 2020 and  the Oil & Gas Industry

United KingdomScotland

The Corporate Insolvency and Governance Bill was published on 20 May 2020 and went through an accelerated parliamentary process, receiving Royal Assent on 25 June 2020 (with the provisions coming into force on 26 June 2020).

The Corporate Insolvency and Governance Act 2020 (“CIGA”) introduces a mixture of permanent and temporary “debtor friendly” measures to restructuring and insolvency law in England and Wales and in Scotland, jurisdictions which have historically been viewed as being “creditor friendly”.

Although a key immediate objective of CIGA was to provide businesses with the flexibility and breathing space required to continue trading during the financial strain caused by the Covid-19 crisis, CIGA also introduces new permanent restructuring procedures, which give the directors of a company the opportunity to restructure the business with the benefit of a moratorium, which pauses creditor and counterparty enforcement rights. Within the context of the North Sea oil & gas industry, CIGA has the potential to impact upon relations with the supply chain, and within joint ventures.

Click here to view the full publication.