- High court finds no breach of duty by bank in exercise of enforcement rights under finance agreements (Aegean Baltic Bank SA v Renzlor Shipping and others)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Issue 1—was a duty owed when exercising rights under the finance agreements?
- Issue 2—was there a breach of duty?
- What are the key points to consider for lenders who are enforcing their rights under loan agreements and security documents?
- Case details
Banking and Finance analysis: The High Court found in favour of a bank’s claim against two companies (and the managing director of one of them) to recover outstanding sums due under a $US 9m loan agreement and related security agreements (the finance agreements). In doing so, the court confirmed that the bank owed an equitable duty in exercising its enforcement rights under the finance agreements. However, that duty was capable of amendment and constriction by contractual agreement and, on the facts, there had been no breach by the bank of its equitable duty Written by Natasha Johnson, partner and Nihar Lovell, professional support lawyer in the Banking Litigation team at Herbert Smith Freehills LLP.
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