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Slaughter and May Reservations over Royal Dutch Shell SEC filing

Screen Shot 2013-10-01 at 07.56.54I wonder how many ordinary stock holders in Royal Dutch Shell Plc are aware of the extensive reservations set out by Slaughter and May in Exhibit 5.1 attached to an SEC filing involving gazillions of dollars, in which Royal Dutch Shell Plc is the sole guarantor?; e.g. “undertakings, covenants and indemnities contained in the Indenture may not be enforceable before an English court…”; Is this a prudent move bearing in mind the flood of recent negative news about Shell, with the CEO about to jump ship?

By John Donovan

I have published below the reservations of Slaughter and May in relation to a filing by SHELL INTERNATIONAL FINANCE B.V. with the United States Securities and Exchange Commission on 13 November 2013 signed by Company Secretary, Michiel Brandjes. Royal Dutch Shell Plc is the guarantor.

Huge sums of money are involved.

US$1,000,000,000 0.900 per cent. Guaranteed Notes due 2016;

US$1,250,000,000 2.000 per cent. Guaranteed Notes due 2018;

US$750,000,000 Floating Rate Guaranteed Notes due 2015; and

US$1,000,000,000 Floating Rate Guaranteed Notes due 2016, 

The estimated filing fees are over $700,000.

I wonder how many ordinary stock holders in Royal Dutch Shell Plc are aware of the extensive reservations set out by Slaughter and May in Exhibit 5.1 attached to an SEC filing involving gazillions of dollars, in which Royal Dutch Shell Plc is the sole guarantor?

Is this a prudent move bearing in mind the flood of recent negative news about Shell, with the CEO about to jump ship?

EXTRACT

Reservations

8. Our opinion is qualified by the following reservations:

(a) the term “binding” is used in this opinion to describe an obligation of the type which the English Courts would enforce. This does not mean that the obligation will necessarily be legally binding and enforceable in all circumstances in accordance with its terms;

(b) undertakings, covenants and indemnities contained in the Indenture may not be enforceable before an English court insofar as they purport to require payment or reimbursement of the costs of any unsuccessful litigation brought before an English court or where the court itself has made an order for costs;

(c) insofar as any obligation under the Indenture is to be performed in any jurisdiction other than England and Wales, an English court may have to have regard to the law of that jurisdiction in relation to the manner of performance and the steps to be taken in the event of defective performance;

(d) we express no opinion as to whether specific performance, injunctive relief or any other form of equitable remedy would be available in respect of any obligation of the Company under or in respect of the Indenture;

(e) the obligations of the Company under or in respect of the Indenture will be subject to any law from time to time in force relating to insolvency, liquidation or administration or any other law or legal procedure affecting generally the enforcement of creditors’ rights;

(f) in our opinion, under English law there is doubt as to the enforceability in England and Wales, in original actions or in actions for enforcement of judgments of United States courts, of liabilities predicated upon United States Federal or State securities laws;

(g) the Searches are not conclusive as to whether or not insolvency proceedings have been commenced in relation to the Company or any of its assets. For example, information required to be filed with the Registrar of Companies or the Central Registry of Winding-Up Petitions is not in all cases required to be filed immediately (and may not be filed at all or on time); once filed, the information may not be made publicly available immediately (or at all); information filed with a District Registry or County Court may not, and in the case of administrations will not, become publicly available at the Central Registry of Winding-Up Petitions; and the Searches may not reveal whether insolvency proceedings or analogous procedures have been commenced in jurisdictions outside England and Wales. However, the certificate of the Deputy Company Secretary referred to in paragraph 3(h) above confirms that to the Deputy Company Secretary’s knowledge, no such event had occurred as at the date hereof; and

(h) our opinions in paragraphs 7(e) and 7(f) above are based upon existing statutory, regulatory and judicial authority, all of which may be changed at any time with retrospective effect. Any change in applicable laws or the facts and circumstances surrounding the offering of the Notes, or any inaccuracy in the statements upon which we have relied, may affect the continuing validity of our opinions in paragraphs 7(e) and 7(f) above. We assume no responsibility to inform you of any such change or inaccuracy that may occur or come to our attention.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. This opinion is being provided to the Company in connection with the Registration Statement and the Prospectus Supplement and may not be reproduced, quoted, summarised or relied upon by any other person or for any other purpose without our express written consent.

Yours faithfully,

/s/ Slaughter and May

EXTRACTS END

The reservations can be seen in their full context here

More related information can be accessed here

And here

definition: reservation

noun

1. (often plural) doubt, reluctance, scepticism, qualms, scruples, demur, hesitancy Their demands were met with some reservation.

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