The High Court has refused San Leon Energy plc a stay that would have continued to prevent Brightwaters Energy Ltd from presenting a winding-up petition over an alleged US$16.65 million debt.
The ruling follows an earlier January judgment in which Mr Justice Liam Kennedy rejected San Leon’s application for an interlocutory injunction restraining Brightwaters from bringing the petition.
San Leon had committed in an October 2023 agreement to pay Brightwaters US$16,652,608 within four business days. It argued that the obligation depended on funding being received under a separate arrangement with another party. The High Court previously found that the contract itself contained no such condition and that San Leon had not established a prima facie case that the debt was genuinely disputed on substantial grounds.
The earlier judgment also relied on unchallenged evidence concerning San Leon’s financial position, including failure to file annual returns and financial statements for three years and suspension of its AIM listing.
On the stay application, San Leon argued that allowing Brightwaters to file a winding-up petition before an appeal was heard could cause serious damage and potentially undermine the appeal. The company sought what was effectively a continuation of the earlier restraint pending the first Court of Appeal hearing.
Mr Justice Kennedy was not satisfied that San Leon had demonstrated bona fide arguable grounds of appeal rather than a tactical attempt to gain further time. He also found that the balance of justice weighed against a stay, citing creditors’ interests, the integrity of the statutory insolvency process and San Leon’s unexplained filing defaults and solvency issues.
Before the written ruling was finalised, a related English court decision led the parties to negotiate a new payment plan. Brightwaters agreed to pause further enforcement while that arrangement remained in place, making an immediate court-ordered stay unnecessary.
The High Court nevertheless formally dismissed San Leon’s stay application and awarded Brightwaters the costs of the injunction application, stay application and associated proceedings.