Extension of Court Protection in "Exceptional Circumstances" | Fieldfisher
Skip to main content

Extension of Court Protection in "Exceptional Circumstances"



The High Court considered an application for an extension of the protection period in an examinership yesterday. The Examiner sought a final extension of 50 additional days beyond day 100 on the basis of “exceptional circumstances” as introduced by the Companies Miscellaneous Provisions (Covid-19)) Act, 2020 (the "2020 Act").

The 2020 Act was introduced in response to the economic difficulties caused by Covid-19 and it had been thought that "exceptional circumstances" warranting a further extension may be confined to reasons caused by Covid-19 during the Interim Period referred to in the Act.

The Law
The 2020 Act provides that where an Examiner has obtained an order extending the period of 70 days protection and where, during the interim period, on the application of the Examiner, the court is satisfied that—
(i) the examiner has been unable to report to the court within the period of 70 days,
(ii) having obtained an order of the court to extend the period, he or she would be unable to report to the court within the period of extension,
(iii) the examiner would be able to report to the court if the examinership period were further extended, and
(iv) exceptional circumstances exist in respect of the company the subject of the application,
the court may by order further extend the extended period by not more than 50 days to enable the Examiner to make his or her report.
The Legislation provides that "exceptional circumstances’ include (but are not limited to) the nature and potential or actual impact of Covid-19 on the company".
The Facts
In the circumstances of the application yesterday, where the company relies very heavily on gas for the manufacture of its product, the Court was satisfied that the unprecedented rise in gas prices caused by the war in Ukraine amounted to an "exceptional circumstance" in respect of the company in examinership. The Court was accordingly satisfied that the provisions of the 2020 Act were met and the period of examinership was extended by a further 50 days.
The Court held that the specific words employed by the Legislature indicated a clear intention that the provision is not to be confined solely to the effects of Covid 19 on Irish businesses, but that other exceptional or unusual circumstances, which may affect a company in examinership during the interim period, could also be considered.
It is now clear that the additional period of 50 days Court protection, introduced by the 2020 Act to protect businesses from the various effects of Covid19, may be applied where an extension of the examinership period is required due to other exceptional reasons.
The "Interim Period" as defined in the 2020 Act is currently extended to 30 April 2022. The Government may further extend the interim period, for such period as it considers appropriate, if it is satisfied that the making of such an order is in the public interest.
It remains to be seen whether the Government will consider a further extension appropriate, but in the meantime, the High Court decision demonstrates a very commercially minded interpretation of the Legislation, which was introduced to protect wider economic interests.
Written by: Mark Woodcock and Ciara Gilroy