Appeal Judges in the Court of Session yesterday issued a decision directing that the liquidators of Scottish Coal Company (SCC) cannot abandon sites or disclaim statutory licences imposing obligations on the company.
SCC went into liquidation owning six working opencast mines and several non-operational sites. Following a sale of some of the sites the liquidators continued to have statutory obligations to maintain the remaining sites. These obligations were a substantial financial burden in the liquidation. In order to protect the interests of SCC's creditors, the liquidators sought directions from the court on whether they could abandon the sites and disclaim the statutory licences.
The Court initially held that the liquidators could abandon the sites and disclaim the licences. This decision was controversial and had far-reaching environmental consequences as it allowed the liquidators to walk away from the company's statutory environmental obligations.
The decision was appealed to the Inner House of the Court of Session by SEPA, the Scottish Ministers, and Councils.
Yesterday's decision reversed the court's original decision. It held that a person cannot "abandon" land, in such a way as to render it ownerless, and thus avoid any obligations (such as those under statutory licences) which run with the land.
The court held that a liquidator was bound to comply with the licence requirements until the licence was surrendered or the company dissolved and the liquidator ceased office.
The decision was welcomed by environmental groups and campaigners. Scottish Labour's environment spokeswoman Claire Baker MSP said: "the announcement is a victory for local communities and the environment. It is a reminder to companies that exploit Scotland's resources that they can't walk away from their responsibilities."
The funds realised by selling some of SCC's assets in July will now be used to maintain the eight remaining sites. Once these run out, the liquidators intend to dissolve SCC.
It is understood however that the liquidators are considering a further appeal so we may not yet have heard the last word in this case.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
