Associate, international litigation and arbitration, London

Who? Ekaterina Churanova, associate, international litigation and arbitration, Skadden, Arps, Slate, Meagher & Flom (UK) LLP, London.  

Churanova

Why is she in the news? The firm secured a Supreme Court victory on behalf of French paper company Sequana SA and the former directors of one of its UK subsidiaries, AWA, in a case concerning a €135m dividend paid by AWA (which later became insolvent) to its sole shareholder Sequana SA, and the lawfulness of that payment. The 160-page ruling clarified the law on the duty owed to creditors by directors of financially distressed companies.

Thoughts on the case: ‘As Lady Arden noted, this is a “momentous decision for company law” and the Supreme Court was under a lot of pressure to get the test for the so-called “creditor duty” exactly right so, while ensuring protection of the interests of the creditors, it does not have a “chilling effect” on business activity.

‘It remains to be seen how the proposed test will be applied in other cases and how the concept of “creditor duty” develops further. However, it is already clear that the Supreme Court’s guidance will provide significant comfort to directors and those advising them, and will allow the directors to take steps more freely to lead the company away from insolvency. This is especially important now, as businesses may be facing or about to face financial difficulties resulting from the Covid-19 pandemic and the current economic situation.’

Dealing with the media: ‘Given the significance of this case for English company law, it has been subject to the media’s attention since the issue of the High Court judgment in 2016. However, we are only now (since the dispute has been resolved by the Supreme Court) able to provide commentary in respect of this matter.’

Why become a lawyer? ‘I’ve always had a keen sense of justice and a drive to defend the interests of those who have been wronged.’

Career high: ‘This case. Leaving aside the wider implications of the Supreme Court judgment, the knowledge that a great weight has been lifted from the clients’ shoulders and that after eight years a €135m claim against them has been finally dismissed is truly rewarding.’

Career low: ‘When, after an unmeritorious claim against your client has been struck out, it is (as a matter of precaution) overturned on appeal, only to be dismissed on the same grounds following the trial a couple of years later, causing the client unnecessary suffering.’

Topics