High Court considers contractual construction of guarantees

The High Court has recently considered a number of questions of contractual construction in the context of guarantees: Barclays Bank plc v Price & Ors [2018] EWHC 2719 (Comm). Financial institutions should welcome the pragmatic and commercial approach adopted by the court to the question of whether a demand to claim under a guarantee was valid. In … Read more

High Court Strikes out claim alleging an implied overarching ‘customer agreement’ requiring the parties to “cooperate with each other and act in good faith”.

Standish & Ors v The Royal Bank of Scotland plc & Anor [2018] EWHC 1829 (Ch) will be of interest to financial institutions seeking to enforce rights or exercise powers under facility agreements. In particular, where counterparties allege the existence of implied duties which they allege restrict the exercise of express rights and powers in facility agreements, … Read more

Commercial Court finds that ‘negative’ interest is not payable on cash collateral posted in accordance with the standard form ISDA Credit Support Annex

The question of whether ‘negative interest’ will be payable by a transferor of cash collateral in the context of a standard form ISDA 1995 Credit Support Annex (Bilateral Form – Transfer) (“CSA“) has been considered by the Commercial Court in The State of the Netherlands v Deutsche Bank AG [2018] EWHC 1935 (Comm). The court found that … Read more

Court of Appeal holds no real prospect of success for claim alleging contractual obligations owed by a bank to its customers in the conduct of FCA review

The Court of Appeal has refused the claimants permission to appeal in the most recent interest rate hedging product (“IRHP“) mis-selling claim to come before the appellate courts: Elite Property Holdings & Anor v Barclays Bank plc [2018] EWCA Civ 1688. The Court of Appeal considered the High Court’s decision to refuse the claimants permission to make … Read more

Supreme Court provides clear guidance on liability to third parties for bankers’ references: clarifying the circumstances where banks will be liable for incorrect information

The recent decision of the Supreme Court in NB Banca Nazionale del Lavoro SPA v Playboy Club [2018] UKSC 43 upheld the decision of the Court of Appeal, confirming that where a bank reference is requested on behalf of an undisclosed principal, then no duty of care is owed by the bank providing the reference to the undisclosed … Read more

Court of Appeal gives guidance on anti-set off provisions in security documentation

A borrower’s right of set-off may be excluded in loan and security documentation (subject to limited exceptions), with the commercial aim of the lender to secure payment, free from potential cross-claims. The recent Court of Appeal decision in Woodeson & Anor v Credit Suisse (UK) Ltd [2018] EWCA Civ 1103 provides helpful guidance as to the operation of … Read more

High Court finds bank unreasonably withheld consent to sale of secured property where sale would not have satisfied the secured liability in full

Paul Crowther & Anor v Arbuthnot Latham & Co Ltd[2018] EWHC 504 (Comm) provides an interesting example of how the High Court applied the test of objective reasonableness to the exercise of a bank’s discretion to consent to the sale of a secured property. In reaching this conclusion, the court refused to apply the so-called Braganza duty … Read more