EMIS Finance BV v ICU Trading Ltd & Ors

Mr Justice Henshaw: (A) INTRODUCTION 2 (B) ISSUES 3 (C) BACKGROUND FACTS 4 (1) The parties 4 (2) LPN Programme 4 (3) The Russian invasion of Ukraine and subsequent events 5 (4) EMIS’s proposed restructuring 6 (5) ICU’s Consent Solicitation Memorandum 7 (6) The injunction application 8 (7) Other procedural matters 8 (D) MAIN TERMS OF THE CONTRACTS 9 (E) PRINCIPLES 15 (1) Contract interpretation: general 15 (2) Implied terms 20 (F) ANALYSIS 21 (G) CONCLUSION 28 (A) INTRODUCTION

1. This judgment follows an expedited Part 8 trial of a dispute primarily between the Claimant (“ EMIS ”), the issuer of two series of loan participation notes (“ LPNs ”), and the First Defendant (“ ICU ”), a BVI investment firm specialising in distressed debt which has acquired a holding in the LPNs with a par value of US$47 million.

2. EMIS seeks declaratory relief as to the proper construction and effect of transactional documents related to two series of notes, viz: i) the Series LPN-26 U.S.$50,000,000 8.75 percent LPNs due 7 November 2022 (ISIN XS1907535576) (“ the Series 26 Notes ”), and ii) the Series LPN-31 U.S.$50,000,000 9.50 percent LPNs due 15 October 2024 (ISIN XS2228241175) (“ the Series 31 Notes ”). I shall refer to the two series of LPNs together as “ the Notes ”.

3. The dispute arises from the purported appointment in relation to the Notes of: i) the Third Defendant (“ GLAS Trustees ”) as Trustee in place of BNY Mellon Corporate Trustee Services Limited (“ BNYM Trustees ”), and ii) GLAS Trust Company LLC (“ GLAS Trust Co ”) as Principal Paying Agent (“ PPA ”) in place of Bank of New York Mellon (“ BNYM ”).

4. The purported removals and appointments were made by Extraordinary Resolutions of Noteholders passed on 22 and 24 July 2025, procured by ICU as Requesting Noteholder via the Second Defendant (“ GLAS SSL ”) and GLAS Trustees. GLAS SSL acted as ICU’s Solicitation, Information and Tabulation Agent for the purposes of procuring the relevant Extraordinary Resolutions. It is now accepted that the purported replacement of the PPA was ineffective.

5. It is common ground that the contractual documentation relating to the Notes provides for a Trustee to be appointed to protect the interests of the Noteholders. The Trustee has a broad range of powers to allow it to supervise and control the Issuer’s conduct under the Notes. Ultimately, if there is an event of default, the Trustee has the right to enforce the security granted by the Issuer on the Noteholders’ behalf. The Trustee can then seek to make recoveries for the benefit of the Noteholders. Save in exceptional circumstances, Noteholders cannot take enforcement action themselves. The Notes have been in default since 2022, but the current Trustee considers itself unable to act due to sanctions concerns.

6. EMIS contends that the purported appointment of GLAS Trustees was invalid because, under the relevant terms of the Notes, the Noteholders do not have the power to appoint or remove the Trustee. EMIS argues that the Issuer has exclusive rights of removal and appointment. ICU, supported by GLAS SSL and GLAS Trustees, contends that the terms of the Notes make clear that the Noteholders are entitled to remove an existing Trustee and appoint a new Trustee in order to protect their interests.

7. For the reasons set out below, I have concluded that:- i) the Issuer has the right to appoint and remove a Trustee; ii) the Noteholders do not have the right to appoint a Trustee; iii) the Noteholders have a right to remove a Trustee, but such removal will become effective only on the appointment by the Issuer or the court of a new Trustee; and iv) the purported appointment of GLAS Trustees in July 2025 was therefore ineffective. (B) ISSUES

8. The issues for determination in the Part 8 trial are as follows. i) Were the Extraordinary Resolutions of Noteholders passed on 22 July 2025 (in respect of the Series 31 Notes) and 24 July 2025 (in respect of the Series 26 Notes) effective to appoint GLAS Trustees as Trustee of the Notes and/or to remove BNYM Trustees as Trustee of the Notes? ii) Do Noteholders have the power by Extraordinary Resolution, independently of any action and/or approval by the Issuer, to (i) remove and/or (ii) appoint the Trustee? If not, what action and/or approval by the Issuer is required in order for such removal and/or appointment to be effective? iii) Does the Issuer have the power, independently of any action and/or approval by the Noteholders by Extraordinary Resolution, to (i) remove and/or (ii) appoint the Trustee? If not, what action and/or approval by Noteholders is required in order for such removal and/or appointment to be effective? (C) BACKGROUND FACTS (1) The parties

9. EMIS is a company incorporated in 2006 under the law of the Netherlands. It is a special purpose vehicle used for multiple transactions, pursuant to which loan credit is extended to borrowers. In turn, that credit is financed by the issuance of LPNs, including the Notes.

10. ICU is a company incorporated in the British Virgin Islands. It is an investment firm with an established strategy of acquiring positions in distressed debt, including in particular Ukrainian distressed assets. ICU holds 42% by value of the total amount issued of the Series 26 Notes, and 52% of the Series 31 Notes.

11. GLAS SSL and GLAS Trustees are both incorporated in England and Wales and are part of the GLAS group of companies, which provides professional trustee and agency services worldwide with around US$600 billion of assets under administration. (2) LPN Programme

12. In or around 2007, EMIS introduced a “ Secured Programme for the issue of Loan Participation Notes, Notes, Warrants and Certificates ”, by which it issued a series of LPNs used to finance loans to borrowers. The value of LPNs which could be issued was originally capped at US$1 billion, but the cap was increased to US$10 billion by 2013. The Notes are two of a total of ten LPN series issued by EMIS.

13. The Series 26 Notes and Series 31 Notes are governed by different but materially similar versions of contractual documents. The Series 26 Notes are constituted and governed by:- i) a Constituting Instrument dated 7 November 2018; ii) Master Trust Terms (“ the 2010 Master Trust Terms ”); iii) Master Conditions (“ the 2010 Master Conditions ”); iv) Master Definitions; and v) Master Agency Terms; each of (ii) to (v) being dated 18 January 2010. All the above documents are expressed to be governed by English law and subject to the exclusive jurisdiction clause of the courts of England & Wales.

14. Similarly, the Series 31 Notes are constituted and governed by:- i) a Constituting Instrument dated 22 September 2020; ii) Master Trust Terms (“ the 2019 Master Trust Terms ”); iii) Master Conditions (“ the 2019 Master Conditions ”); iv) Master Definitions; and v) Master Agency Terms; each of (ii) to (v) being dated 12 November 2019, and all the documents expressed to be governed by English law and subject to the exclusive jurisdiction of the courts of England & Wales.

15. Each of the LPN series, including the Notes, provides for the issue proceeds to be on-lent by EMIS to borrowers under loan agreements. The LPNs are limited recourse obligations, with coupon and principal payments to Noteholders derived solely from, and contingent on, loan repayments by the ultimate borrower (see, e.g., 2010 Master Trust Terms clauses 4.2 and 4.3, 2010 Master Conditions clause 2(b)).

16. The ultimate borrower for the whole series was, in fact, ABH Ukraine Limited, a company registered in Cyprus (“ ABHU ”), which is owned by ABH Holdings S.A., a company registered in Luxembourg (“ ABHH ”). ABHU invested the loan proceeds into various commercial assets in Ukraine, in particular JSC Alfa-Bank (Ukraine), now called Sense Bank. From 2009 to 2018, ABHU was a majority shareholder in Sense Bank, and from 2019 to 2023 it held a significant minority shareholding. ABHH is a member of the Alfa Group, whose beneficial owners include Mr Mikhail Fridman and Mr Petr Aven, Russian businessmen who are subject to UK and other sanctions.

17. EMIS assigned the benefit of the EMIS/ABHU loan agreements to the Trustee by way of security. If there is an event of default by ABHU, the Trustee is entitled to enforce the security and therefore enforce the loan agreements directly against ABHU, on behalf of the Noteholders. (3) The Russian invasion of Ukraine and subsequent events

18. EMIS’s evidence indicates that the Russian invasion of Ukraine on 24 February 2022 had a material impact on Sense Bank’s operations. The National Bank of Ukraine imposed restrictions which significantly impaired Sense Bank’s ability to generate revenue. In July 2023, Sense Bank was, according to the evidence, expropriated by the Ukrainian government by nationalisation without compensation. As a result, EMIS’s evidence indicates that ABHU was unable to repay the sums EMIS had lent it. ABHU has not made payments to EMIS since 2022, and EMIS has stopped making payments under the Notes. These events gave rise to Events of Default under the EMIS/ABHU loan agreements, making the loans immediately due and payable.

19. The invasion also resulted in the imposition of sanctions on certain industries, financial institutions and individuals connected with Russia. In May 2022, this led to the Trustee of the Notes, BNYM Trustees, stating that it was no longer prepared to take certain actions in respect of the Notes due to concerns about EU sanctions. The evidence indicates that BNYM Trustees now considers itself unable to take any actions as Trustee of the Notes.

20. ICU’s evidence casts the background to the current situation in somewhat different terms, as follows. It indicates that EMIS was originally managed by an independent director who had no connection with ABHU or the Alfa Group. However, that director resigned in the aftermath of the Russian invasion of Ukraine. ABHU then procured the appointment of replacement directors, through the Dutch courts, who do have links with the Alfa Group. Since then, EMIS has sought to take steps to limit any potential enforcement action against ABHU. It has proposed a restructuring of the Notes that, ICU says, would prevent such enforcement (as outlined below), it has sought to prevent the appointment of a replacement Trustee who may take enforcement actions in respect of the Notes (including via these proceedings), and it has failed to exercise its own (purported) power to appoint a replacement Trustee. ICU infers that EMIS is now under common control with ABHU. (4) EMIS’s proposed restructuring

21. From autumn 2022 onwards, there were discussions between interested parties, including EMIS, as to how value might be realised for the Noteholders. As of early 2025, no resolution had been reached.

22. On 17 February 2025, EMIS launched a Consent Solicitation Memorandum (“ EMIS CSM ”) containing a proposal to restructure all ten series of notes. This document proposed that Noteholders pass Extraordinary Resolutions whereby:- i) each series’ maturity date would be extended by six years beyond its original scheduled maturity; ii) all interest payments on the Notes would be deferred until the new extended maturity dates; iii) the existing Trustee would be removed, and i2 Capital Trust Corporation Ltd (“ i2 ”) would be appointed as the new Trustee and Security Agent for the restructured Notes; iv) all prior breaches in relation to the Notes and the loan agreements that had occurred up to the restructuring effective date (such as payment defaults or maturity defaults) would be formally waived, and all acts taken by EMIS up to that date ratified, with the result that no past default could be relied upon to accelerate or enforce the Notes; and v) the Note Conditions would be amended to authorise EMIS, as Issuer – as opposed to the Trustee – to commence, maintain, compromise and/or settle legal proceedings as it considered to be in the interest of the Noteholders, and to raise funding for such proceedings. This would have authorised EMIS to pursue litigation or arbitration claims if EMIS deemed it necessary to recover assets or enforce rights, the proceeds of which (net of funding costs) would be applied pro rata in redemption of the notes in whole or in part, for the benefit of the Noteholders during the extended period.

23. Extraordinary Resolutions were passed by Noteholders in respect of seven of the LPN series, and their restructuring became effective on 11 March 2025, with i2 appointed as the new Trustee and Security Agent for those Series. The restructuring of an eighth series became effective on 21 March 2025. In relation to the Series 26 and Series 31 Notes, some Noteholders were in support of the proposed Extraordinary Resolutions, but ICU and a significant number of other Noteholders were against, so they were not passed. As a result, EMIS retained the right to pursue action against ABHU under the relevant loan agreements, but (so far as the evidence indicates) has not done so.

24. Ordinarily, the Noteholders could instruct the Trustee to enforce the Note Security, but BNYM has indicated that it is unable to act, and EMIS has taken no steps to appoint a new Trustee. On the other hand, EMIS has made clear that it intends to appoint i2 as Trustee as and when the court determines that it has the right as Issuer under the Notes to do so and that ICU does not have the right to resist such appointment; and that that intention is not contingent on the Noteholders agreeing to the restructuring proposal in the EMIS CSM. If, though, ICU does have the right to resist the appointment of i2, through non-approval or removal, then it will be open to ICU or EMIS to apply to the court under section 41 of the Trustee Act 1925 asking the court to appoint a Trustee.

25. EMIS filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (“ ICSID ”) under the Netherlands-Ukraine bilateral investment treaty (the “ EMIS BIT Claim ”). The EMIS BIT Claim alleges that Ukraine expropriated Sense Bank, causing ABHU to default on its payment obligations to EMIS, in breach of Ukraine’s obligations under the treaty to afford fair and equitable treatment to EMIS, to guarantee the free transfer of funds and not to expropriate EMIS’s investments unlawfully. The EMIS BIT Claim was registered by ICSID on 10 March 2025, as ICSID Case No. ARB/25/10.

26. In addition, ABHH instituted ICSID proceedings against Ukraine on 29 December 2023 pursuant to the Belgium/Luxembourg-Ukraine bilateral investment treaty (ICSID Case No. ARB/24/1). That claim also alleges that Ukraine expropriated Sense Bank in breach of treaty obligations, and is brought by ABHH in its capacity as ultimate owner of Sense Bank. (5) ICU’s Consent Solicitation Memorandum

27. On 19 May 2025, ICU as Requesting Noteholder issued a request to convene a meeting of the holders of the Notes (the “ Requisition Notice ”), setting out ICU’s intention to solicit the consent of the Noteholders to pass certain Extraordinary Resolutions.

28. The proposed Extraordinary Resolutions were set out in the draft Consent Solicitation Memorandum at Appendix 2 to the Requisition Notice, which was in similar terms to a Consent Solicitation Memorandum ultimately issued by ICU on 9 July 2025, and included a proposal to remove and replace the existing Trustee under the Notes.

29. There was then correspondence between EMIS and ICU in which they disagreed about the validity of the proposals, in particular the Noteholders’ power to appoint and remove trustees and PPAs.

30. On 9 July 2025, following its purported appointment by ICU as Solicitation, Information and Tabulation Agent, GLAS SSL issued the Consent Solicitation Memorandum in its final form on behalf of ICU as Requesting Noteholder (the “ ICU CSM ”). In the ICU CSM, ICU proposed Extraordinary Resolutions in relation to each series of the Notes to bring about:- i) the removal of BNYM Trustees as Trustee; ii) the removal of BNYM as PPA; iii) the appointment of GLAS Trustees as the new Trustee; and iv) the appointment of GLAS Trust Co as the new PPA. The draft resolutions indicated that, if passed, they would have immediate effect with no need for any further authorisation, approval or document.

31. The ICU CSM proposed for the Extraordinary Resolutions to be passed either on the basis of a resolution in writing by a proposed deadline of 4pm Monday 28 July 2025, or at a meeting of Noteholders proposed to be held at 11am on Thursday 31 July 2025.

32. The ICU CSM was publicised via market alerts, and a voting website established by GLAS SSL. It was promptly published on financial news and intelligence platforms including Bloomberg, Debtwire and the Financial Times, and EMIS became aware of it the following day. EMIS was sent a copy of the ICU CSM on 18 July 2025 by a Noteholder. GLAS SSL subsequently made public announcements that Extraordinary Resolutions had been passed on 22 and 24 July 2025 for the Series 31 and 26 Notes respectively. (6) The injunction application

33. On 24 July 2025, EMIS applied for a prohibitory injunction restraining the Defendants from taking further action in relation to the purported appointments, after ICU had declined the previous day to refrain from procuring Extraordinary Resolutions to progress the proposals in the ICU CSM. EMIS issued the present claim the same day.

34. The injunction application was listed to be heard on 28 July 2025, with the Defendants having been given short notice. However, prior to the hearing ICU and GLAS Trustees gave undertakings not to give or act on instructions in relation to the Trustee’s activities, until 7 September 2025. On 28 July 2025, a consent order was approved by Bright J pursuant to which the hearing of the injunction application was vacated and relisted, to be heard on notice between 20 and 29 August 2025. The Bright J order recorded that ICU submitted to the jurisdiction of the English court for the purposes of the injunction application and the claim. The on notice hearing was listed for 27 August 2025 before Bryan J. During the course of that hearing, ICU agreed to extend the duration of the undertakings pending an expedited trial, and EMIS agreed to provide fortification of its cross-undertaking in damages in the amount of £200,000. (7) Other procedural matters

35. Bryan J also gave directions for the Defendants to make any application for security for their costs (if not agreed) by 12 September 2025. On 3 September 2025, EMIS agreed in principle to give security to all Defendants. On 12 September 2025, EMIS agreed with the GLAS Defendants to provide security for their costs in the amount of £150,000. EMIS and ICU could not agree the amount of security to be given, and following a security application issued by ICU, Dias J at the pre-trial review on 10 October 2025 ordered EMIS to provide security in the amount of £425,000. That was done on 17 October 2025.

36. On 15 October 2025, ICU confirmed that it accepted that the Noteholders do not have power to appoint or remove the PPA (as to which different contractual provisions apply) and that the purported appointment of GLAS Trust Co and removal of BNYM from that role were ineffective. (D) MAIN TERMS OF THE CONTRACTS

37. The relevant provisions of the 2010 Master Trust Terms and the 2019 Master Trust Terms (together, the “ Master Trust Terms ”) are materially the same, and include the following.

38. Clause 18 provides:- “18. APPOINTMENT, RETIREMENT AND REMOVAL OF TRUSTEE” 18.1 The power of appointing a new Trustee in respect of the LPNs shall be vested in the Issuer. A trust corporation shall at all times be Trustee in respect of the LPNs and may be sole Trustee. Any appointment of a new Trustee shall as soon as practicable thereafter be notified by the Issuer to the Holders in accordance with the Terms and Conditions. 18.2 The Trustee may retire at any time upon giving not less than 60 days’ notice in writing to the Issuer without assigning any reason and without being responsible for any costs occasioned by such retirement and the Arranger shall have power to remove the Trustee provided that the retirement or removal of any sole Trustee or sole trust corporation shall not become effective until a trust corporation is appointed as successor Trustee. The Issuer undertakes that if a sole Trustee or sole trust corporation gives notice of retirement, it shall use all reasonable endeavours to procure that another trust corporation be appointed as Trustee. If no Trustee is so appointed within two months of the date the Trustee gave notice to retire, the Trustee may itself appoint another trust corporation to act as Trustee in its place subject to the approval of the Issuer and the Arranger. … 18.4 The Trustee shall, notwithstanding the provisions of Sub-clause 18.1, have power by notice in writing to the Issuer to appoint any person to act as co-Trustee jointly with the Trustee: (a) if the Trustee considers such appointment to be in the interests of the Holders; (b) for the purpose of conforming with any legal requirement, restriction or condition in any jurisdiction in which any particular act is to be performed; or (c) for the purpose of obtaining a judgment in any jurisdiction, or the enforcement in any jurisdiction against the Issuer of either a judgment already obtained or any of the provisions of the Constituting Instrument and/or, if applicable, the Charging Instrument. Any person so appointed shall (subject to the provisions of the Constituting Instrument and/or, if applicable, the Charging Instrument) have such rights (including as to reasonable remuneration), powers, duties and obligations as shall be conferred or imposed by the instrument of appointment. The Trustee shall have power to remove any person so appointed. At the request of the Trustee and for the purpose of facilitating the exercise of powers of the Trustee pursuant to the Trust Deed, the Issuer shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and hereby irrevocably appoints the Trustee to be its attorney in its name and on its behalf to do the same. Such a person shall (subject always to the provisions hereof) have such trusts, powers, authorities and discretions (not exceeding those conferred on the Trustee by the Constituting Instrument and/or, if applicable, the Charging Instrument) and such duties and obligations as shall be conferred or imposed by the instrument of appointment. Before appointing such person to act as separate Trustee or co-Trustee, the Trustee shall (unless it is not, in the opinion of the Trustee, reasonably practicable to do so) give notice to the Issuer of its intention to make such appointment (and the reason therefor).”

39. As to the provision in clause 18.1 for notification of Noteholders “ in accordance with the Terms and Conditions ”, clause 3.10 of the Master Trust Terms provides that “ references … to the Terms and Conditions, are to the terms and conditions of the LPNs of such Series ”, i.e. to the 2010 Master Conditions and the 2019 Master Conditions. Under the heading “ NOTICES ”, clause 14 of each set of Master Conditions provides:- “All notices to the Loan Participation Noteholders will be valid if published in a leading English language daily newspaper published in London or such other English language daily newspaper with general circulation in Europe as the Trustee may approve…”

40. Schedule 1 to 2010 Master Trust Terms and the 2019 Master Trust Terms is headed “Provisions regarding Meetings of Noteholders”. Paragraph 1.19 provides that:- “A meeting of the Noteholders shall, in addition to the power hereinbefore given, but without prejudice to any powers conferred on other persons by these Master Trust Terms, have the following powers exercising by Extraordinary Resolution, namely:- (a) power to sanction any proposal by the Issuer for any modification, alteration, abrogation, variation or compromise of, or arrangement in respect of, the rights of the Noteholders against the Issuer, or of the Issuer against the Borrower (and/or, if applicable, any other Obligor), whether such rights shall arise under these Master Trust Terms, the applicable Loan Agreement or otherwise; (b) power to sanction any scheme or proposal of the exchange or sale of the LPNs for or the conversion of the LPNs into or the cancellation or termination of the LPNs in consideration of shares, stock, notes, bonds, debentures, debenture stock and/or other obligations and/or securities of the Issuer or any other company formed or to be formed, or for or into or in consideration of cash, or partly for or into or in consideration of such shares, stock, notes, bonds, debentures, debenture stock and/or other obligations and/or securities as aforesaid and partly for or into or in consideration of cash; (c) power to assent to any alteration of the provisions contained herein or the LPNs which shall be proposed by the Issuer or the Trustee; (d) power to approve a person proposed to be appointed as a new Trustee under the Trust Deed and power to remove any Trustee or Trustees for the time being thereof; (e) power to authorise the Trustee to concur in and execute and do all such documents, acts and things as may be necessary to carry out and give effect to any Extraordinary Resolution; (f) power to discharge or exonerate the Trustee from any liability in respect of any act or omission for which the Trustee may have become responsible under these Master Trust Terms or in respect of the LPNs; (g) power to approve the substitution of any entity for the Issuer (or any previous substitute) as principal debtor under these Master Trust Terms; (h) power to give any authority, discretion or sanction under which the provisions herein or the LPNs is required to be given by Extraordinary Resolution; and (i) power to appoint any persons (whether a Noteholder or not) as a committee or committees to represent the interests of the LPNs and to confer upon such committee or committees any powers or discretions which the Noteholders could themselves exercise by Extraordinary Resolution, subject to a proviso imposing a quorum of two-thirds of those voting for certain reserved matters (e.g. alteration of the terms and conditions relating to the maturity, redemption, prepayment and repayment of the Notes or their coupons).

41. Schedule 1 § 1.20 provides that any resolution passed at a meeting of the Noteholders duly convened and held shall be binding upon all the Noteholders. Paragraph 1.21 provides that an Extraordinary Resolution requires a 75% majority, but that is revised to require a bare majority by § 2.20 of the Constituting Instrument for the Notes.

42. The Master Trust Terms provide that EMIS grants the Trustee, on trust for itself and the Noteholders, security over all its rights under the EMIS/ABHU loan agreements relating to the relevant series of notes (the “ Note Security ”). If ABHU defaults on the loans, then the Trustee is entitled to enforce the Note Security, either by instructing EMIS to take action against ABHU or by taking such action itself (clause 7.6 of the Master Trust Terms, as amended by clause 2.7 of the Constituting Instrument). The Trustee is required to take such action if requested by the holders of a majority of the relevant series of Notes, or if directed to do so by Extraordinary Resolution passed by the relevant Noteholders ( ibid .). Only the Trustee may take these enforcement steps: clause 22.1 of the Master Trust Terms provides that only the Trustee is entitled to pursue the remedies available under the Trust Deed. The Noteholders cannot pursue them directly, save that clause 12(b) of the Master Conditions indicates that a Noteholder may proceed directly against the Issuer if the Trustee, having become bound to do so, fails to do so within a reasonable time and the failure is continuing. The remedies of the Trustee are limited recourse, so that they are limited to taking action in relation to the Note Security: the Trustee does not have rights against the Issuer’s other assets.

43. The Trustee also has extensive other powers, both to act on behalf of the Noteholders and to constrain and control the conduct of the Issuer. ICU highlights the following features of the contractual scheme:- i) The Trust is constituted for the benefit of the Noteholders, who (together with the “ Agents ” appointed under the contractual documents) are the “ Secured Parties ”. This is stated and restated in numerous places in the contractual documents, including:- a) clause 7.2 of the Master Trust Terms, as amended by clause 2.5(a) of the Constituting Instrument, by which the Issuer grants the “Note Security” to the Trustee; b) clause 7.3 of the Master Trust Terms, as amended by clause 2.6 of the Constituting Instrument, which provides for the Trustee to enforce the Note Security, and which provides that the Trustee shall do so if directed by the Noteholders by Extraordinary Resolution; c) clause 7.6(a) of the Master Trust Terms provides that:- “If an Event of Default (as defined in the relevant Loan Agreement) occurs, the Trustee may, and shall if requested to do so by holders of more than one-half in principal amount of the LPNs outstanding or if directed to do so by an Extraordinary Resolution and, in either case, subject to it being indemnified and/or provided with security to its satisfaction against all liabilities to which it may thereby become liable and all liabilities which may be incurred by it in connection therewith require the Issuer to declare all amounts payable under the applicable Loan Agreement by the Borrower to be due and payable and do all such other acts in connection therewith, that the Trustee may direct.” d) clause 7.11 of the Master Trust Terms, by which the Issuer grants an irrevocable power of attorney to the Trustee to act as the Issuer’s attorney in respect of the Issuer’s own obligations under the Constituting Instrument; and e) clause 2.21 of the Constituting Instrument, which provides that the Trustee shall hold the Note Security on trust for itself and the Secured Parties. ii) The Trustee has extensive powers to act for the benefit of the Noteholders, as set out in clause 12 and Schedule 5 of the Master Trust Terms. iii) The Trustee is entitled to determine, as between itself and the Noteholders, questions relating to:- a) the exercise of its powers: clause 12.2(f) of the Master Trust Deed, and b) whether an Event of Default is capable of remedy (clause 12.2(o) of the Master Trust Deed), though not whether an Event of Default has occurred. iv) The Trustee can agree to certain modifications to the contractual documentation provided it forms the opinion that such modifications do not materially prejudice the interests of the Noteholders or are of a formal, minor or technical nature or are made to correct a manifest error: clause 17.1 of the Master Trust Terms, as amended by clause 2.12 of the Constituting Instrument. Other modifications can be made only if sanctioned by an Extraordinary Resolution: clause 2.20 of the Constituting Instrument. v) The Trustee may waive any breaches of the contractual documents, provided it forms the opinion that this would not materially prejudice the interests of the Noteholders: clause 17.1 of the Master Trust Terms, as amended by clause 2.12 of the Constituting Instrument. Other breaches can be waived only if sanctioned by Extraordinary Resolution: clause 2.20 of the Constituting Instrument. vi) The Trustee is required to have regard to the interests of the Noteholders as a class in exercising its powers, authorities and discretions: clause 12.2(q) of the Master Trust Deed. vii) The breadth of the Trustee’s control is emphasised by the concluding words of clause 9.1, which state that: “In giving any consent pursuant to this Sub-clause 9.1 the Trustee may require the Issuer to agree to such modification or additions to the provisions of the Trust Deed and the Constituting Instrument and/or the Charging Instrument as the Trustee may reasonably require”.

44. The Issuer, on the other hand, was and is subject to significant constraints under the transaction terms:- i) It was required to pass the relevant proceeds of the Notes to ABHU pursuant to the EMIS/ABHU loan agreements, to collect the sums due from ABHU under those agreements, and to pass those sums on to the Noteholders. This reflects the fact that the commercial purpose of the Notes was to raise financing for ABHU, such that the Issuer had no material commercial interest in the Notes. ii) The covenants in clause 9 of the Master Trust Terms include clauses requiring the Issuer to:- a) “at all times execute and do all such further documents, acts and things as are necessary at any time in the opinion of the Trustee to give effect to the provisions of the Constituting Instrument and/or the Charging Instrument” (clause 9.1(g)); b) “use all reasonable endeavours to procure that the Borrower [i.e. ABHU]…complies with its obligations under the applicable Loan Agreement” (clause 9.1(l)); c) “not, without the prior written consent of the Trustee…engage in any activity or do anything whatsoever except” certain administrative acts relating to the operation of the Notes, and issuing other securities on terms that cannot prejudice existing Noteholders (clause 9.1(m)); and d) “[not,] without the prior written consent of the Trustee or any Extraordinary Resolution, agree to any amendments to or any modification or waiver of, or authorise any breach or proposed breach of, the terms of the Loan Agreement and will act at all times in accordance with any instructions of the Trustee from time to time with respect to the Loan Agreement (subject to being indemnified and/or secured by the Noteholders to the Issuer’s satisfaction) except as otherwise expressly provided in the Trust Deed and the Loan Agreement” (clause 9.1(z)); and e) “deliver to the Trustee all information received by it under the Loan Agreement” (clause 9.1(aa)). iii) In extremis, the Issuer can itself be replaced, under clause 17.2, but only with the consent of the Trustee, which has to carry out various steps and is entitled to specified information before such a substitution can occur. (E) PRINCIPLES (1) Contract interpretation: general

45. The basic principles governing the interpretation of commercial contracts can be summarised as follows:- i) The court has to decide what a reasonable person, having all the background knowledge which would have been available to the parties, would have understood them to be using the language in the contract to mean. The court does this by focussing on the meaning of the relevant words in their documentary, factual and commercial context. The meaning has to be assessed in the light of (a) the natural and ordinary meaning of the clause, (b) any other relevant provisions of the contract, (c) the overall purpose of the clause and the contract, (d) the facts and circumstances known or assumed by the parties at the time that the contract was made, and (e) commercial common sense, but disregarding subjective evidence of any party's intentions. ( Arnold v Britton [2015] UKSC 36 , [2015] AC 1619 at [15]). ii) The court has to ascertain the objective meaning of the language used, within the context of the contract as a whole and, depending on the nature, formality, and quality of the contract, give more or less weight to the wider context in reaching a view on objective meaning ( Wood v Capita Insurance Services [2017] UKSC 24 , [2017] AC 1173 at [10]). It is important to have regard to the scheme of the contract as a whole (see, e.g., In re Sigma Finance Corporation [2009] UKSC 2 at [12]). iii) The unitary exercise of construction is an iterative process by which rival constructions are checked against the provisions of the contract, business common sense, and their commercial consequences. The extent to which each factor will assist the court in its task will vary according to the circumstances of the particular agreement. Some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals ( Wood v Capita at [11]-[13]). Nonetheless, it should be borne in mind that even the most skilled drafters sometimes fail to see the wood for the trees ( In re Sigma Finance Corporation at [12]). iv) Consideration of the commercial consequences is part of the iterative exercise of interpretation, and not merely a safety valve in case of absurdity or linguistic ambiguity ( Napier Park European Credit Opportunities Fund Limited v Harbourmaster Pro-Rata CLO 2 BV [2014] EWCA Civ 984 per Lewison LJ at [33] and [36]). Where a contract term is open to more than one interpretation, it is generally appropriate to prefer the one which is most consistent with business common sense i.e. which seems most likely to give effect to the commercial purpose of the agreement ( Rainy Sky SA v Kookmin Bank [2011] UKSC 50 at [20]-[21], [30] and [43]). What matters is not the court’s own view of what is commercially sensible but what a reasonable person would consider commercially sensible in the light of all the background facts: BMA Special Opportunity Hub Fund Ltd & Ors v African Minerals Finance Ltd [2013] EWCA Civ 416 at [24] and [33]. v) At the same time, commercial common sense and surrounding circumstances should not be invoked to undervalue the importance of the language of the provision which is to be construed. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision ( Arnold v Britton at [17]). vi) Contract terms should be construed harmoniously, where possible, so as to avoid any inconsistency between them. When confronted with two provisions that seem inconsistent, the court should do its best to reconcile them if that can conscientiously and fairly be done ( Societe Generale v Geys [2012] UKSC 63 , [2013] 1 AC 523 at [24]; Adactive Media Inc v Ingrouille [2021] EWCA Civ 313 at [35]). The parties may have prescribed how any inconsistency should be resolved by making one provision subject to or without prejudice to another (see, e.g., Scottish Widows Fund and Life Assurance Society v BCG International [2012] EWCA Civ 607 ). vii) Where the parties have used language open to only one interpretation, the court must apply it, even if it leads to an improbable result: Rainy Sky at [23], citing Co-operative Wholesale Society Ltd v National Westminster Bank plc [1995] 1 EGLR 97 , 99 (CA). The plain and ordinary meaning of the words of the contract can be displaced only if they produce a “ commercial absurdity ”: Thompson v Goblin Hill Hotels Ltd [2011] UKPC 8 at [18]). viii) There is a difference between cases of ambiguity and those where it appears something has gone wrong in the drafting of the document and the parties have made a mistake. The court will be slow to find that such mistakes are made in formal documents, though it can reach such a conclusion where there is a clear mistake of language or syntax and it is clear, from the rest of the document interpreted with the admissible background, what correction ought to be made to remedy it ( Pink Floyd Music Ltd v EMI Records Ltd [2010] EWCA Civ 1429 at [20]-[21]; Scottish Widows Fund and Life Assurance Society v BCG International at [21]).

46. As noted above, the relevant ‘factual matrix’ means the facts and circumstances known or assumed by the parties at the time that the contract was made. It does not include matters known or reasonably available only to one party ( Arnold v Britton at [21]). Where the contract sets out terms of a tradeable security or the like, it would be wrong to take account of facts not known to or reasonably available to all present and prospective parties. Thus, in In re Sigma Finance Corporation Lord Collins (with whom Lords Hope and Mance concurred) said:- “…this is not the type of case where the background or matrix of fact is or ought to be relevant, except in the most generalised way. I do not consider, therefore, that there is much assistance to be derived from the principles of interpretation re-stated by Lord Hoffmann in the familiar passage in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 , 912–913. Where a security document secures a number of creditors who have advanced funds over a long period it would be quite wrong to take account of circumstances which are not known to all of them. In this type of case it is the wording of the instrument which is paramount. The instrument must be interpreted as a whole in the light of the commercial intention which may be inferred from the face of the instrument and from the nature of the debtor's business. Detailed semantic analysis must give way to business common sense: The Antaios [1985] AC 191 , 201.” [37] That passage was quoted by the Court of Appeal in Napier Park European Credit Opportunities Fund at [32], adding at [33] and [36]:- “[33] Thus we must seek to discern the commercial intention, and the commercial consequences from the terms of the contract itself; and that feeds in to the process of deciding whether a particular word or phrase is in reality clear and unambiguous. It follows in my judgment that, where possible, the court should test any interpretation against the commercial consequences. That is part of the iterative exercise of interpretation. It is not merely a safety valve in cases of absurdity. So much is, in my judgment, also made clear by the decision of the Supreme Court in Rainy Sky SA v Kookmin Bank [2011] UKSC 50 ; [2011] 1 WLR 2900 . In that case Lord Clarke said at [20]: “It is not in my judgment necessary to conclude that, unless the most natural meaning of the words produces a result so extreme that it was unintended, the court must give effect to that meaning.” … [36] I do not therefore agree with Mr Snowden that commercial considerations have no part to play in deciding whether a particular interpretation is or is not ambiguous. Moreover, to say that ambiguity or unambiguity is the governing factor may be to miss the point. As Lord Sumption observed in Sans Souci Ltd v VRL Services Ltd [2012] UKPC 6 at [14]: “It is generally unhelpful to look for an “ambiguity”, if by that is meant an expression capable of more than one meaning simply as a matter of language. True linguistic ambiguities are comparatively rare. The real issue is whether the meaning of the language is open to question. There are many reasons why it may be open to question, which are not limited to cases of ambiguity.””

47. As part of considering the scheme of the contract as a whole, it may be relevant to have regard to which provision(s) can reasonably be regarded as setting out the most definitive or comprehensive statement of the parties’ intentions on a particular matter, and also to whether one interpretation would result in contradiction as opposed to mere redundancy. In Taylor v Rive Droite Music Limited [2005] EWCA Civ 1300 , clause 4 of the contract stated its duration to be 2 years. However, clause 11(c), which dealt with royalties, included reference to a third 12-month period of the contract, thus assuming at least a 3-year term. The majority stated that, if the clauses were inconsistent, then clause 4 should prevail. Neuberger LJ gave three reasons for taking that view: “100. First, if the term is indeed two years, then clause 4(a)(i) is given its literal and natural effect, and clause 11(c) merely has no effect: it is redundant. On the other hand, if the term is three years, while clause 11(c) is given its natural effect, it is not merely a matter of clause 4(a)(i) being redundant. It is effectively being contradicted, or being given a meaning which it simply does not have: one is concluding that a contract, which the parties have expressly agreed in clear terms will last only two years, is to last three years. If one has to choose between a construction which results in one contractual provision being redundant or irrelevant, and a construction which results in another contractual provision being rewritten or contradicted, it seems to me that it is the latter of those two alternatives which flies more flagrantly in the face of the expressed intention of the parties.

101. Secondly, the issue between the parties in the present case is the duration of the 1998 Agreement. There is no doubt that clause 4(a)(i) is expressly, and indeed solely concerned with that very issue, and it is expressed in unequivocal terms: the duration is to be two years. On the other hand, clause 11(c) is not concerned with the duration of the 1998 Agreement, but with advance payments of royalties. Of course, it contains a clear implicit assumption that the term will have a third twelve months, and will therefore be for a term of three years. However, although obvious and clear, it is nonetheless an assumption, and not an express and unequivocal statement as to duration.

102. Thirdly, clause 4(a)(i) is a central and substantive provision, whereas clause 11(c), although of obvious commercial importance, is ultimately only concerned with machinery. Clause 4(a)(i) is solely concerned with defining the basic duration of the 1998 Agreement − "basic" because it is capable of extension under clause 4(a)(ii) and under clause 12(b). The duration of a contract is one of its fundamental and essential provisions conceptually, legally and commercially. Clause 11(c) is a provision for payment in respect of one year on account of royalties, the calculation, apportionment and payment of which are dealt with in other provisions of the 1998 Agreement. Although obviously such a provision is of commercial importance to the parties, it has no such fundamental or essential significance.” In the event, Neuberger LJ concluded that the clauses could be reconciled. Latham LJ, the other judge in the majority, found that they could not, and held that clause 4 should prevail for the reasons given by Neuberger LJ quoted above:- “86. It seems to me in these circumstances, as Neuberger LJ has more fully set out in his judgment, that the determination of the term of the contract should properly be governed by the clause expressly identifying that term. The fact that there is a contrary indication in a clause dealing with the mechanics of payment which eschews the word "term" and talks of "periods" should not, in my judgment, entitle the maker of the agreement to argue that the clause expressly dealing with the term does not mean what it says.”

48. EMIS submitted that if a clause in a contract is followed by a later clause which destroys the effect of the first clause, then the later clause is to be rejected as repugnant and void, citing Lewison, “The Interpretation of Contracts” (8 th ed., 2023) at [9.75]-[9.77]; Forbes v Git [1922] 1 AC 256 , 259. However, Lewison goes on to say that “[i]f the principle survives in the modern law, it is one to be applied only as a last resort” , and that any mechanistic principle that would prefer earlier clauses in an agreement would be “inimical to the modern approach to the interpretation of contract” [9.79]. That view was endorsed by Trower J in Mitchells and Butlers Pensions Plan [2021] EWHC 3017 (Ch) , [2022] Pens LR 6 at [401]. In RSPCA v Sharp [2011] 1 WLR 980 , Lord Neuberger stated that “…as a freestanding point, the mere fact that one clause precedes another seems to me to be of minor potential relevance on the issue of how they will interrelate to each other.”

49. EMIS also cited Business Mortgage Finance 6 Plc v Greencoat Investment Limited [2019] EWHC 3900 (Ch) and [2019] EWHC 2128 (Ch) , where Zacaroli J had to consider whether the trustee under a series of notes had been validly appointed by noteholders pursuant to certain extraordinary resolutions. The issuer contended that they had not, and successfully sought an interim injunction and, later, final declaratory relief. At the interim injunction hearing [2019] EWHC 3900 (Ch) , the judge stated: “As to the appointment of a trustee or agent, the claimant appears to be on even stronger ground. Paragraph 23.1 of the trust deed states that the power to appoint a trustee vests in the issuer alone. True it is that the appointee must be approved by an extraordinary resolution of the A noteholders but there is nothing in the trust deed which empowers the A noteholders to appoint a trustee.” [11]

50. At the final hearing for declaratory relief [2019] EWHC 2128 (Ch) , Zacaroli J found that the parties who purported to pass the extraordinary resolution effecting appointment were not in fact noteholders at the relevant time, and so the appointment was invalid. However, he stated obiter that even if the extraordinary resolution had been effective:- “The power to appoint a new trustee is vested in BMF6 as the Issuer, by clause 23.1 of the Trust Deed. Although any such appointment must be ratified by an Extraordinary Resolution of the A Noteholders (while they remain outstanding), the Noteholders do not have the power to appoint a trustee.” [44] As ICU points out, in § [11] of the first judgment the judge stated that the contract wording there provided that the power to appoint a trustee was vested in the issuer “ alone ” (though in fact the judgments do not reproduce the relevant part of the terms of the notes). In addition, in Greencoat there was no direct equivalent to Schedule 1 § 1.19(d) in the present case, but only a provision that the issuer’s choice of trustee “must be approved by an extraordinary resolution of the noteholders” . The case is therefore of limited assistance. (2) Implied terms

51. A term will be implied if it is necessary to make the contract work and is so obvious as to go without saying or is necessary to give business efficacy to the contract: Marks & Spencer Plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72 ; [2016] AC 742 . The test of business efficacy will be satisfied “if, without the term, the contract would lack commercial or practical coherence” ( ibid. at [21]). No term can be implied that would contradict an express term ( ibid . at [28]). Lord Neuberger added:- “… it would seem logically to follow that, until the express terms of a contract have been construed, it is, at least normally, not sensibly possible to decide whether a further term should be implied. Having said that, I accept Lord Carnwath JSC's point in para 71 to the extent that in some cases it could conceivably be appropriate to reconsider the interpretation of the express terms of a contract once one has decided whether to imply a term, but, even if that is right, it does not alter the fact that the express terms of a contract must be interpreted before one can consider any question of implication.” [28]

52. Lewison § 6.65 identifies five criteria to be considered (by reference to BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1978) 52 ALJR 20) when deciding whether a term should be implied:- i) The term should be reasonable and equitable. ii) The term should be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it. iii) The term should be so obvious that it goes without saying. iv) The term should be capable of clear expression. v) The term should not contradict any express term of the contract. (F) ANALYSIS

53. ICU submits, in outline, as follows:- i) The language of Schedule 1 § 1.19(d) and the scheme of the Notes’ contractual provisions make clear that the Noteholders are entitled to remove an existing Trustee and appoint a new Trustee to protect their interests. ii) It is clear from the scheme of the Notes that the role of the Trustee is to protect the Noteholders, including (if required) in a dispute between the Noteholders and the Issuer or ABHU. For the Issuer to have the sole power to control the identity of the Trustee would be entirely inconsistent with this scheme. iii) In any event the wording of the relevant clauses strongly supports ICU’s interpretation. Thus: a) Paragraph 1.19(d) of Schedule 1 to the Master Trust Terms confers an express power on the Noteholders to remove a Trustee, whereas clause 18 confers no such power on the Issuer at all. b) The reference in Schedule 1 to the Noteholders ‘approving’ an appointment of a new Trustee is (in context) a reference to the Noteholders approving the proposal put forward in the draft Extraordinary Resolution. c) The Issuer’s powers of appointment of a new Trustee under clause 18.1 would fall to be exercised only in the limited circumstances set out in clause 18.2, i.e. where a Trustee has resigned or been removed (by another party) with no replacement appointed. iv) ICU’s interpretation produces a harmonious interpretation of the relevant terms, whereby each of the Noteholders and Issuer have powers that are consistent with the express language of the clauses, their respective roles in the transaction structure, and the scheme of the relevant documentation. By contrast, EMIS’s interpretation gives no meaningful content to paragraph 1.19(d) of Schedule 1 at all, leaves the Noteholders with no contractual mechanism for controlling the identity of the Trustee (a party who is supposed to represent them), and is inconsistent with the limited role played by the Issuer in the transaction structure. v) ICU’s interpretation is manifestly more consistent with business common sense, since it gives the Noteholders the power to choose the party that will represent their interests. EMIS’s interpretation gives the Issuer the power to choose the entity that will act on behalf of the Noteholders, including in disputes with the Issuer itself. Only ICU’s interpretation makes sense.

54. Conversely, EMIS contends as follows:- i) The purported appointment of GLAS Trustees as Trustee was, and is, invalid and ineffective because the Noteholders do not have the power to remove the existing Trustee or to appoint a new Trustee, whether by Extraordinary Resolution or otherwise. ii) The power of appointment and removal of the Trustee under the Notes is reserved exclusively to EMIS as Issuer. iii) Clause 18 of the Master Trust Terms, the key operative provision, unambiguously vests the sole and exclusive power to appoint a new Trustee in the Issuer. iv) On a proper construction of clause 18, EMIS’s express exclusive power to appoint a new Trustee includes the right to remove an existing Trustee. Alternatively, the right to remove the existing Trustee is necessarily implied. v) Paragraph 1.19(d) of Schedule 1 to the 2010 Master Trust Terms cannot bear the weight which ICU seeks to place on it: it provides only that the Noteholders may approve the appointment of a person proposed to be Trustee. It does not purport to provide Noteholders with any freestanding right to appoint. Moreover, the approval of a Trustee (whether proposed by the Issuer or the Noteholders) by the Noteholders is not mandatory and there is therefore no requirement that approval should be obtained before a Trustee is validly appointed by the Issuer. vi) Paragraph 1.19(d) confers no freestanding power to remove a Trustee. vii) The language of the relevant provisions is clear, but even if there were ambiguity, EMIS’s proposed interpretation makes good commercial sense. The Issuer is best placed to appoint and remove the Trustee of the Notes, as is common in such financing arrangements. The Issuer is able to carry out the administrative function of appointing and removing the Trustee without the potential difficulties that Noteholders might face, such as a division between them as to the appropriate candidate. ICU’s bald assertion that Noteholders must have the right to carry out the appointment and removal function because they will act in their own best interests (whereas the Issuer will not) is flawed, not least because the Issuer has an interest in ensuring the proper administration of the Notes. It is also wrong to assert, as ICU does, that the Noteholders’ lack of power to appoint and remove the Trustee somehow undermines their best interests. The Trustee can be held to account to comply with its obligations under the Trustee Act 1925 and in accordance with the general law, as well as its obligations under the Master Trust Terms. Noteholders may seek the assistance of the Court to exercise a supervisory jurisdiction and/or appoint a new Trustee if necessary.

55. I am unable to accept ICU’s submission or, in part, EMIS’s contentions.

56. I begin with ICU’s submission that commercial common sense indicates that the power to appoint and remove Trustees must have been intended to be conferred primarily on Noteholders, because the Trustee plays a vital role in protecting the interests of the Noteholders. ICU cites the various examples from the transaction documents which I summarise in §§ 42 and 43 above. The Trustee is a key party (ICU says the key party) in the transaction; and its principal role is to constrain the Issuer’s conduct and, if necessary, override the Issuer’s decisions regarding enforcement of the Note Security. Though the Trustee must act on the instructions of the Noteholders in certain respects, including when the Note Security should be enforced, the Trustee also has significant discretion to take certain actions which it considers to be in the Noteholders’ interests, and its decisions will generally bind the Noteholders. Thus, ICU submits, it would be extraordinary if the Notes gave the Issuer the exclusive power to remove and appoint the Trustee: an entity whose very contractual role is to constrain the Issuer.

57. However, there are in my view significant counter-arguments. First, the Master Trust Terms provide for the Trustee to be a trust corporation, and in practice it seems likely to have been envisaged that it would be a professional trustee. The Trustee will in any event be subject to duties arising under the transaction terms and the general law. Professional and legal constraints can therefore be expected to bear on the Trustee’s exercise of its powers.

58. Secondly, and more specifically, the transaction documents themselves legislate for the ways in which the Trustee is to exercise its duties, including as regards enforcement action, giving the Noteholders defined powers to instruct the Trustee to take action, or to veto its decisions, in specified circumstances: see the provisions referred to in §§ 42, 43(i)(b) and (c) and 43(iv) (2 nd sentence) and (v) (2 nd sentence) above. In other situations, the Trustee has to form an opinion that a course of action is in the interests of the Noteholders: see the provisions referred to in § 43(iv) (1 st sentence) and (v) (1 st sentence) above. The parties have thus stipulated with some precision the relationship between the Noteholders and a Trustee, which in my view somewhat cuts against the view that only a Trustee appointed by the Noteholders can be expected adequately to protect their interests. Further, the Trustee may incur legal liability for failing to act in good faith or for manifest error (Master Trust Terms § 12.2(v)).

59. Thirdly, ICU’s submission proves too much. If Issuer influence over the identity of the Trustee were as inconsistent with the scheme of the Notes, including the proper protection of Noteholders, as ICU suggests, then one would not expect the transaction to confer any powers on the Issuer in that regard: yet clause 18 clearly does. ICU suggests that, on its approach, clause 18 is an ‘administrative’ provision which confers power on the Issuer to appoint a new Trustee only in ‘non-controversial’ circumstances giving rise to a vacancy. However, it cannot be assumed that a Trustee will (in particular) retire only in non-controversial circumstances: the converse seems at least as likely. Moreover, ICU did not suggest (or adduce evidence) that there is anything unusual about bond or note issuers having the power to appoint and remove trustees, either generally or in the context of non-recourse securities.

60. Fourthly, there is practical merit in the Issuer having the ability to appoint the same Trustee for the various series of a Note programme, to help ensure consistency of approach.

61. I do not therefore consider that a reasonable person would necessarily regard ICU’s proposed construction of the Master Trust Terms as the only commercially sensible one, or would regard an interpretation that did not give Noteholders control over the identity of the Trustee as commercially surprising.

62. Turning to the language of the contract, clause 18 is the, or at least a, logical starting point, because it is expressly and solely concerned with appointment, retirement and removal of the Trustee, whereas Schedule 1 § 1 addresses a different topic, namely the powers of Noteholders exercisable by Extraordinary Resolution: though it is clear that clause 18 must be read in conjunction with Schedule 1 § 1.19(d) because the latter expressly contains further powers connected with Trustee appointment and removal.

63. The structure of clause 18 suggests that clause 18.1 is a primary power, which can be read in its own right and not merely as an adjunct to clause 18.2, which it precedes. If clause 18.1 really were intended to apply only in circumstances where a vacancy had arisen due to a retirement or removal by the Arranger within clause 18.2, one might reasonably expect clause 18.1 to follow clause 18.2.

64. The natural meaning of the phrase “ appointing a new Trustee ” in clause 18.1 includes the replacement of an existing trustee as well as filling a vacancy. A comparison can be made with the use of similar language in any number of everyday examples referring to appointment to a position typically occupied by a single person (e.g. ‘appoint a new chief executive’, ‘find myself a new doctor’, and so on).

65. That view is reinforced by the language of section 41 of the Trustee Act: a statute which is mentioned several times in other provisions of the contract documentation and can reasonably be assumed to have been within the parties’ contemplation. Section 41 appears in the section of Part IV of the Act entitled “ Appointment of new Trustees ” and is itself headed “ Power of court to appoint new trustees ”. Section 41 provides:- “The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient difficult or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee. In particular and without prejudice to the generality of the foregoing provision, the court may make an order appointing a new trustee in substitution for a trustee who lacks capacity to exercise his functions as trustee, or is a bankrupt, or is a corporation which is in liquidation or has been dissolved.” Thus, the term “ appointing a new trustee ” is used to cover each of (a) appointment in substitution for an existing trustee, (b) appointment in addition to any existing trustee and (c) appointment where there is a vacancy. Hence the replacement of a trustee is, in terms of the statutory language used, a species of “ appointing a new trustee ”. Where clause 18.1 uses that very same phrase, it seems likely to mean the same thing, and hence to include the substitution of one Trustee for another.

66. That is so despite the fact that the Master Trust Terms use the words ‘remove’ or ‘removal’ elsewhere (see clause 18.2 and Schedule 1 § 1.19(d)), as do the Master Agency Terms (clause 16.2). On the basis that appointing a new Trustee can include substituting one trustee for another, i.e. a dual process of removal plus appointment, it is not significant in my view that the phrase does not use the specific word ‘remove’. The phrase encapsulates, but is not limited to, removal. By contrast, in the case of the Arranger’s power, it was necessary to refer in specific terms to removal because the Arranger has no power to appoint a Trustee.

67. Further, clause 18.1 indicates that the Issuer is (subject to clause 18.4) given the sole power to appoint a new Trustee: “ The power of appointing a new Trustee … shall be vested in the Issuer” (my emphasis), even though, as Noteholders point out, it does not expressly use the word ‘alone’. The use of the emphatic phrases I have underlined contrasts with other language such as one might expect were the power non-exclusive (e.g. “The Issuer shall have power to appoint a new Trustee” ).

68. The same view is supported by the language of clause 18.4:- “The Trustee shall, notwithstanding the provisions of Sub-clause 18.1, have power by notice in writing to the Issuer to appoint any person to act as co-Trustee jointly with the Trustee: …” The words “ notwithstanding the provisions of Sub-clause 18.1 ” are most readily explicable on the basis that clause 18.4 confers a power that would otherwise be inconsistent with clause 18.1 by reason of clause 18.1 conferring the sole power to appoint trustees.

69. I do not accept ICU’s submission that the scheme of clause 18.4 indicates that, had the parties intended clause 18.1 to confer an exclusive power on the Issuer to appoint the Trustee, then one would have expected clause 18.1 to contain either (a) a consent mechanism requiring Noteholder approval (of the kind which existed in Business Mortgage Finance 6 Plc v Greencoat Investment Limited ) or (b) an express requirement to act in Noteholders’ interests of the kind set out in clause 18.4. The proviso “if the Trustee considers such appointment to be in the interests of the Holders” in clause 18.4 is in my view directed, wholly or mainly, at the question of whether it is in Noteholders’ interests for there to be two Trustees. The absence of any similar proviso to the Issuer’s and Trustee’s appointment powers in subclauses 18.1 and 18.2 suggests that the parties did not intend to impose an express requirement to act in Noteholders’ best interests as regards the identity of the Trustee being appointed.

70. For these reasons, clause 18.1 in my view (and subject to any contrary conclusion that might be reached after considering the relevant provisions in the round) by its express wording, without the need to resort to an implied term, empowers the Issuer alone to remove a Trustee and appoint another in its place.

71. Clause 18.2 makes clear that any Trustee retirement or any removal by the Arranger will not take effect until a trust corporation is appointed as successor trustee. That indicates an intention by the parties that there should never be a situation where there is no Trustee. This appeared to be common ground, reflecting for example the fact that the Trustee has to hold title to assets: see §§ 43(i)(a) and (d) above.

72. Schedule 1 § 1.19(d) includes two elements. The first is “ power to approve a person proposed to be appointed as a new Trustee ”. On an ordinary reading, that language does not amount to power of appointment. It appears to contemplate a process under which the Noteholders would be consulted about a proposed appointment by, presumably, the Issuer. Such consultation is not expressly provided for in the Master Trust Terms, though it could nonetheless take place.

73. ICU suggests that this wording gives the Noteholders the power by Extraordinary Resolution to approve a person proposed by individual Noteholders (by convening a Noteholders meeting), and by doing so to appoint that person as the Trustee. ICU notes that the language of ‘proposal’ reflects Schedule 1 § 1.4, part of the mechanism for Noteholders’ meetings, which requires notice of a Noteholders’ meeting to “specify the terms of the resolution(s) to be proposed” . In addition, other parts of Schedule 1 § 1.19 refer to proposals from the Issuer or the Trustee (see subparagraphs (a) and (c)), whereas subparagraph (d) leaves open the question of whose proposal is contemplated.

74. However, the suggestion that a power to “ approve a person proposed to be appointed as a new Trustee ” means a power to appoint a Trustee proposed by individual Noteholders in my view involves a strained construction. The language fits more naturally with an approval by Noteholders of a Trustee appointment to be made by someone else. Further, Schedule 1 § 1.4 concerns the ‘proposal’ of Noteholder resolutions, whereas § 1.19(d) contemplates the approval of a person, making § 1.4 of limited assistance in the interpretation of § 1.19(d).

75. In addition, and significantly, ICU’s approach would be inconsistent with clause 18.1, conferring the sole appointment power on the Issuer, unless – like clause 18.4 – Schedule 1 § 1.19(d) contained wording indicating that it applied notwithstanding clause 18.1, i.e. that it qualified clause 18.1. However, Schedule 1 § 1.19(d) contains no such language: to the contrary, it states that it is “ without prejudice to any powers conferred on other persons ” by the Master Trust Terms, hence including clause 18.1. If necessary, therefore, this part of § 1.19(d) must give way to clause 18.

76. The second element of Schedule 1 § 1.19(d) is a power “ to remove ” any trustee. It is difficult to see how that provision can be ‘read down’ (as EMIS submits) so as to apply only in circumstances where the Noteholders have exercised a power to approve a trustee proposed to be appointed by the Issuer within the first part of § 1.19(d). Further, I do not consider this part of Schedule 1 § 1.19(d) to be inconsistent with clause 18, because clause 18 does not in my view indicate that the removal powers which it confers on the Issuer and the Arranger, as distinct from the appointment power conferred on the Issuer, are to be exclusive.

77. On the other hand, any such removal power must in my view be read in conjunction with the portion of clause 18.2 stating that “the retirement or removal of any sole Trustee or sole trust corporation shall not become effective until a trust corporation is appointed as successor Trustee” . On one view, that language might be thought to apply only in the particular circumstances envisaged by the preceding part of clause 18.2, i.e. Trustee retirement or removal by the Arranger (so long as the Arranger remains involved in the transaction). However, in its terms it is broad enough to cover Trustee removal by Noteholders; and the policy aim, of avoiding a situation where there is no Trustee, supports the view that it covers Trustee removal by Noteholders too. On that basis, a Trustee removal by Noteholders under Schedule 1 § 1.19(d) will not become effective until the Issuer has appointed a new Trustee, in the exercise of its powers under clause 18.1. Since the Terms do not positively oblige the Issuer to do so in such circumstances, it may be necessary for an application to be made to the court to appoint a new trustee in the event of deadlock.

78. Both parties submitted, for different reasons, that the power to appoint a Trustee goes hand in hand with the power to remove. The Noteholders thus submit that, if Schedule 1 § 1.19(d) confers a power to remove a Trustee, it is likely that the power to approve a Trustee contained in the same paragraph amounts to a power to appoint. However:- i) power to appoint and power to remove do not necessarily go hand in hand: under clause 18 the Arranger has a power to remove but not a power to appoint; ii) on the construction indicated above, the Noteholders’ power to remove a Trustee is by no means an absolute one, because it takes effect only on the appointment by the Issuer or the court of a new Trustee; and iii) the ‘hand in hand’ argument would in my view be insufficient to overcome the problem of inconsistency with clause 18 to which I refer in § 75 above.

79. The view that (a) clause 18 empowers the Issuer both to appoint and to remove the Trustee and (b) a Trustee removal by Noteholders takes effect only on appointment of a new Trustee by the Issuer or the court, gives effect to the language of both sets of provisions (clause 18 and Schedule 1 § 1.19(d)), avoids direct inconsistency, and does not appear commercially absurd. To the extent that it might be regarded as untidy, that is a product of the parties’ choices in the drafting of the documentation. In practice, it means that if a sufficient number of Noteholders to pass an Extraordinary Resolution require it, a Trustee can be removed, but only once the Issuer has appointed a replacement. If the Issuer refused to give effect to the Noteholders’ wishes so expressed, then an application could be made to the court seeking the appointment of a new Trustee. It is true that this approach makes the power of approval in Schedule 1 §1.19(d) one of limited potency, but any other approach would in my view be open to the formidable objection referred to in §§ 74 and 75 above. It may also be worth noting that, as EMIS points out, Schedule 1 § 1.19(g) (“ power to approve the substitution of any entity for the Issuer (or any previous substitute) as principal debtor under these Master Trust Terms” ) provides an example of a stated approval power where the body of the Master Trust Terms makes clear that Noteholder approval is in fact not required: clause 17.2 states that the Trustee may “ without the consent of the Holders ”, agree to the Issuer being substituted as the principal debtor in respect of the LPNs by any other company, provided that specified steps are taken, none of which involves Noteholder approval.

80. ICU suggests that the more coherent approach, viewing the provisions in the round, is that a Trustee removal by Noteholders under Schedule 1 § 1.19(d) can be made effective by reading the ‘power to approve’ wording in the preceding part of the paragraph as in fact conferring a power to appoint a replacement. The end result then would be that either:- i) the Issuer can both appoint and remove Trustees under clause 18.1 and the Noteholders can both appoint and remove under Schedule 1 § 1.19(d); or ii) (ICU’s primary case) only the Noteholders have the power to appoint and remove a Trustee, with the Issuer having no power to remove a trustee so appointed, nor to appoint a replacement (because there will be no vacancy, since the Noteholders have both removed and replaced the trustee).

81. In my view, both of those alternatives are inconsistent with the scheme of the Master Trust Terms read as a whole, including both the exclusive power prima facie conferred on the Issuer by clause 18.1 and the fact that Schedule 1 § 1.19(d) is expressed to be without prejudice to ( inter alia ) clause 18. The Noteholders’ approach would either severely undermine clause 18 by allowing the Noteholders to make any Issuer appointment/removal ineffective in practice (alternative (i) above), or turn the structure upside down by giving the effective powers to the Noteholders to the exclusion of the Issuer (alternative (ii) above). I therefore consider that the construction indicated in § 79 above should be preferred. (G) CONCLUSION

82. I shall hear the parties on the precise formulation of the appropriate relief, but in substance I consider the answers to the issues raised for determination to be as follows:- i) The Extraordinary Resolutions of Noteholders passed on 22 July 2025 (in respect of the Series 31 Notes) and 24 July 2025 (in respect of the Series 26 Notes)were not effective to appoint GLAS Trustees as Trustee of the Notes and/or to remove BNYM Trustees as Trustee of the Notes. ii) Noteholders do not have the power by Extraordinary Resolution, independently of any action and/or approval by the Issuer, to appoint the Trustee. Noteholders have a power to remove a Trustee, but such removal takes effect only on the appointment of a new Trustee by the Issuer or the court. iii) The Issuer has the power, independently of any action and/or approval by the Noteholders by Extraordinary Resolution, to (i) remove and/or (ii) appoint the Trustee.

83. I am grateful to counsel for their cogent and persuasive submissions.