3-4 South Sq scores magnificent seven on Metronet insolvency

Commercial chambers 3-4 South Square has scored all the lead instructions in the public-private partnership (PPP) administration of Metronet, confirming the set as the bar leader for insolvency work.

Seven of the set’s silks came in front of Mr Justice Patten in the Chancery Division to discover whether it was possible to transfer the undertakings of two Metronet companies to one or more subcontracted companies to bring an end to the administration by Ernst & Young (E&Y).

The companies in question were Metronet Rail BCV and Metronet Rail SSL, which were jointly responsible for the London Underground network before going bankrupt.

Metronet went into insolvency on 18 July when Mr Justice Lightman made the first-ever PPP administration order, appointing four E&Y partners as administrators.

Through the powers of the Mayor of London and the Greater London Authority Act 1999, the PPP agreements were set up to finance and maintain the Tube’s infrastructure.

Patten J needed to decide whether, under the 1999 act, E&Y could transfer some or all of Metronet’s property, rights and liabilities to maintenance subcontractors.

Patten J held that any transfer would have to be to a new PPP company rather than to a private business. The judge left it to counsel to draft a form of direction that reflected this construction of the act.

Gabriel Moss QC acted for the administrators, while William Trower QC was instructed for Transport for London and London Underground.

Mark Phillips QC acted for Balfour Beatty, Antony Zacaroli QC for Thames Water and EDF Energy, and Simon Mortimore QC for Trans4M.

Bombardier Transportation instructed Simon Mortimore QC, while Metronet was represented by Richard Sheldon QC. All silks were from 3-4 South Square.