![Global rules on foreign direct investment](https://www.nortonrosefulbright.com/-/media/images/nrf/nrfweb/knowledge/publications/us_24355_legal-update--fdi-alert.jpeg?w=265&revision=a5124a65-abf9-40e4-8e96-9df39ffdb212&revision=5250068427347387904&hash=96B456347C3246E5649838DF281C5F5D)
Publication
Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
United Kingdom | Publication | October 2020
This three-part series focuses on the key considerations when negotiating s.106 obligations, being a type of agreement or unilateral undertaking needed to secure mitigation measures in connection with proposed development. From securing a resolution to grant, through to the issue of the planning permission, this series offers practical tips on how to draft and negotiate s.106 obligations quickly whilst maintaining value and cash flow, as well as ensuring the scheme remains attractive to funders and prospective purchasers. These articles will look at common issues and how effective drafting can help.
Part 1 focuses on: How to retain flexibility in drafting; ensuring the final s.106 obligation remains attractive to funders; and the steps to be taken to maintain development cash flow.
Part 2 will look at: Early and late stage development viability reviews; dealing with multiple parties; and deeds of variation associated with s.73 applications.
Part 3 will consider: Common obligations and common pitfalls, particularly agreed carbon targets and contributions, employment and training obligations, and Grampian obligations.
A milestone is reached at the point that a local planning authority (LPA) resolves to grant planning permission subject to completion of a s.106 planning obligation. The permission is almost granted, the uplift in site value is within grasp, and if the site is under option or subject to funding terms, then the developer may be close to achieving a “Satisfactory Planning Permission”. Whilst the heads of terms of the s.106 obligation may be in the committee or delegated report, the skill in translating these into a bankable permission is in the drafting. The s.106 obligation must deliver on the heads of terms, but these are rarely agreed with legal input. Given that the difference between workable and onerous obligations often lies in the detail and drafting, it makes sense to obtain early legal input. Attempting to amend heads of terms post-resolution may mean going back to committee/delegated authority. In addition to the delay, there is no guarantee that approval will be given a second time round.
In these uncertain times, no developer wants to be bound to perform obligations without any wiggle room. It is therefore critical to retain some flexibility in the drafting of s.106 obligations. Ways to achieve flexibility include:
In drafting s.106 obligations, consideration should be given not only to funders providing development finance, but also to funders financing RPs and to purchasers obtaining residential mortgages. Considerations include:
Maintaining development cash flow is important and often an issue not understood by LPAs. Frequent issues include:
Look out for Part 2 of this series of s.106 insights. If you have any questions arising from this article, or would like to discuss your s.106 requirements, please contact Sarah Fitzpatrick, Head of Planning on sarah.fitzpatrick@nortonrosefulbright.com or +44 207 444 3678.
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Publication
On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
Publication
In the recent decision of Euronav Shipping NV (Euronav) v Black Swan Petroleum DMCC (BSP) [2024] EWHC 986 (Comm) (the Judgment), the English Commercial Court has underscored the role of comity in international disputes.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2023