A dispute over the termination of a funding agreement for a debt advisory group working to provide social and affordable housing has been referred to arbitration, the Commercial Court heard.
The “New Beginning” group claims it will be destroyed by a decision of a funding partner to halve payments for its day-to-day operations from €20 million to €10 million.
New Beginning Management Services Ltd (NBMS) and New Beginning Development Services Ltd (NBDS) are involved in providing, through partnership with international capital, funding for social and affordable homes leased on a long-term basis to local authorities and approved housing bodies.
Last April, they brought Commercial Court proceedings against four asset and fund management firms. Their case seeks to restrain the termination of an agreement which they say will have “devastating and irremediable consequences for New Beginning”.
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The proceedings are against Platform ICAV, for and on behalf of its sub-funds Irish Social Housing Fund I and the ISH New Build Fund, and against RS ISH Advisors Ltd, IQ EQ Fund Management (Ireland) Ltd and the RoundShield Partnership LLP.
The defendants deny the claims.
The first plaintiff, NBMS, says that in 2018 it entered into an asset management agreement with The Platform ICAV and RoundShield.
It was amended in 2022 with RS ISH Investment Advisors as a party in relation to the ISH sub-fund. In 2021, the second New Beginning firm, NBDS, entered into a separate agreement with the Platform ICAV. IQ EQ Fund Management was the alternative investment fund manager.
It is claimed a decision has been made that RoundShield investors will exit the ISH fund and that RoundShield conspired to bring about the termination of that agreement.
It will have the result of at least halving the commercial return due to NBMS “and of destroying NBMS as a going concern with the loss of jobs”, the plaintiffs say.
The case was briefly mentioned on Tuesday before Mr Justice Denis McDonald in the Commercial Court which was told the dispute is now going to arbitration.
Joe Jeffers SC, for New Beginning, said it had also been agreed between the parties that there would be no need for a separate injunction hearing seeking to stop the termination notice coming into effect.
Mr Jeffers also said the underlying proceedings have been referred to arbitration, which is under way.
The judge said this was good news but he would give a later hearing date to deal with an argument about legal costs to date.
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