Key developments in B&F case law—financial contracts

Key developments in B&F case law—financial contracts

Caroline Edwards, partner and David Thomas, solicitor at Travers Smith, discuss the key cases and developments in relation to financial contracts.

What have been the key cases in this area over the past 12 months?

A large number of cases concerning complex financial contracts have come before the courts in the last 12 months. The following decisions are of particular interest:

Credit Suisse International v Stichting Vestia Groep [2014] EWHC 3103 (Comm), [2014] All ER (D) 58 (Oct)

In this case the defendant sought to disclaim various transactions that it had entered into under an International Swaps and Derivatives Association (ISDA) Master Agreement in order to avoid liabilities to the claimant. It claimed that it did not have authority to conclude the transactions, despite the ISDA Master Agreement including representations and warranties that stated that it did. The court held that, while the transactions were made without authority, and therefore void:

  • the defendant was estopped from claiming that it did not have the requisite authority to enter into the transactions as a consequence of the warranties given by the defendant in the ISDA Master Agreement, and
  • even if the defendant was not so estopped, the claimant would have an equivalent claim for breach of warranty which would succeed, the value of which would be equivalent to the claim under the transactions themselves

The case is the latest attempt made by a public body to disclaim an interest rate swap, which can be traced to the early '90s cases of Hazell v Hammersmith and Fulham London Borough Council [1990] 2 QB 697, [1990] 3 All ER 33 and Westdeutsche Landesbank Girozentrale v Islington London Borough Council, [1996] AC 669, [1996] 2 All ER 961. This decision is currently under appeal (that appeal will be heard in July 2015). Dexia Crediop SpA v Provincia Di Crotone and Banco Santander Totta v Companhia Carris de Ferro de Lisboa, which are currently

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About the author:

Miranda is a solicitor specialising in leveraged and acquisition finance. She trained at Hogan Lovells International LLP and qualified into the international banking and finance team. During her time at Hogan Lovells she worked on a variety of domestic and cross-border transactions, acting for both borrowers and lenders. She also experienced secondments to Barclays Bank PLC and Kaupthing Bank hf.