Executive Summary
- Kiko UK Ltd (original tenant) entered a 10-year lease in 2016, assigned to Jamino Ltd (first defendant) in 2019.
- Kiko provided an Authorised Guarantee Agreement (AGA) and Pianoforte Holdings S.p.A (second defendant) gave a parent company guarantee.
- Jamino Ltd defaulted and entered liquidation in May 2024; its liquidator disclaimed the lease in June 2024 under Insolvency Act (IA) s.178.
- Central legal issue: effect of the disclaimer on Kiko’s and Pianoforte’s continuing liabilities under the lease and guarantees.
- Court held that the AGA must be construed as a whole; Kiko’s liability does not automatically terminate on disclaimer despite clause 6.2.
- The case clarifies the interplay between IA s.178 disclaimer rights and the continuing obligations under AGAs post-1995 Act.
Sanctions Highlights
- — No sanctions implications identified in the case.
Emerging Risks
- Potential uncertainty in lease guarantee liabilities post-liquidation disclaimer may increase litigation risk for guarantors.
- Parent companies providing guarantees face exposure despite liquidation disclaimers by subsidiaries.
- Newly discovered payments (rent deposit, £40,000 cash) may complicate indemnity claims and defenses.
- Risk of trial delay or appeal may affect timely resolution and increase legal costs.
Geopolitical Impact
- UK jurisdictional precedent reinforces the legal framework governing lease assignments, liquidations, and guarantees.
- Confirms the UK’s commercial law approach to insolvency and landlord-tenant relationships, relevant for international investors and multinational corporate groups operating in London.
- Highlights the importance of clear contractual drafting under English law to manage cross-border insolvency risks.
Economic Intelligence
- The ruling impacts commercial lease risk management in London’s prime retail locations (Oxford Street).
- Parent company guarantees remain a critical risk mitigation tool but with nuanced exposure post-liquidation disclaimer.
- Potential cost savings from early summary judgment denied; prolonged litigation may increase financial burdens on parties.
- The case underscores the financial risks for parent companies in guaranteeing subsidiaries’ lease obligations.
Strategic Recommendations
- Review and clarify AGA and parent company guarantee clauses to explicitly address disclaimer scenarios.
- Monitor liquidations closely to assess disclaimer impacts on lease-related liabilities.
- Consider alternative risk mitigation strategies beyond guarantees, such as insurance or escrow arrangements.
- Prepare for potential litigation delays and appeals by allocating sufficient legal resources.
- Advise clients on the importance of comprehensive due diligence on lease assignments and guarantee agreements in UK commercial property deals.
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**Source Notes:**
Case Title: *Sanctions Intelligence Digest*
Link: [https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/720.txt](https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/720.txt)