On 15 August 2025 Mr Justice Richard Smith handed down judgment sanctioning the restructuring plan in respect of Madagascar Oil Limited (MOL), a company registered in Mauritius. The case concerned a large thermal heavy oilfield in Madagascar, operated by MOL’s subsidiary, MOSA, a company registered in Madagascar.

The case has various interesting features.

Uniquely, it involved just two creditors, MOL’s parent company, BMK Resources Ltd (BMK) and Outrider Master Fund LP (Outrider), both based in the Cayman Islands.  In essence the plan was proposed by one creditor (BMK), with a view to cramming down the other’s (Outrider) debt, whilst retaining its own $600m intercompany claim.  The rationale advanced for this was an injection of funding to be provided by BMK post-sanction.

The decision is one of the first to be published following recent Court of Appeal authority (Thames Water, Petrofac) addressing the injection of new money and related fairness considerations. The Petrofac decision (which reiterated that the burden was on the plan company to show that returns on new money were equivalent to the market rate or justified as a fair allocation of post-restructuring benefits) was delivered the day after the sanction hearing and is referred to in the judgment. The Court’s approach to the issue is likely to be of significant interest to practitioners.

The restructuring plan involved considerations of multiple jurisdictions and issues of COMI and recognition in other jurisdictions.  MOL’s COMI was shifted to England and Wales, despite insolvency proceedings already being underway in Mauritius, solely for the purposes of restructuring its debt and avoiding liquidation in Mauritius.  The international effectiveness of the plan was actively contested and the Court heard evidence from Mauritian and Malagasy law experts on issues concerning recognition and public policy constraints. Despite the Court finding that it would not be acting in vain in sanctioning the plan, it was not satisfied there was a reasonable prospect that the rule in Re Gibbs provided a basis for MOL to achieve recognition in Mauritius.

Matthew Weaver KC and Katie Longstaff, instructed by Trowers & Hamlins LLP, acted for Outrider. The full judgment can be accessed here.