Nortel-Lehman could "leapfrog" to the Supreme Court

Mr Justice Briggs, presiding, said he was planning to pass down judgment on the crucial case before Christmas, and suggested an appeal to the verdict could jump directly to the highest court in the land, if certain conditions are met.

The adviser to the Nortel pension scheme, PricewaterhouseCoopers (PwC), has added its support for this course.

“I think whatever happens it will go straight to the Supreme Court,” said PwC partner Jonathon Land. “It is very important, and it is very difficult.”

According to the parliamentary blue book, one condition for the leapfrog is the judge’s decision contains a “point of law of general importance” about a specific act which has been exhaustively argued before the High Court.

For the appeal to proceed, the party must apply for a certificate of the High Court and the “leave” of the House of Lords within 14 days of the judgment.

The point of law in the Nortel-Lehman case is the extent of the regulator’s powers of restitution against parent companies  – the financial support direction (FSD) and the contribution notice (CN) – in the context of insolvency.

PwC and Ernst & Young are representing subsidiaries of the Lehman Brothers and Nortel groups, which have brought the challenge against FSDs issued by the regulator.

And schemeXpert.com  has learned the latest courtroom clash followed an extraordinary closed-door meeting in New York between the involved parties.

This followed the failure of the regulator’s appeal in Ontario’s court of appeal in July  after its warning notice to Nortel was seen to breach the firm’s bankruptcy protection arrangements under Canadian insolvency law.

Justin Briggs, a partner at Burges Salmon, agreed the leapfrog appeal was “essential” to clarify this point of law. Ernst & Young and the regulator declined to comment on the future course of the litigation.