Sucden Financial Ltd v Fluxo-Cane Overseas Ltd & Anor [2010] EWHC 2133 (Comm) (13 August 2010)

Sucden Financial Ltd v Fluxo-Cane Overseas Ltd & Anor [2010] EWHC 2133 (Comm) (13 August 2010)

Sucden was entitled to liquidate Fluxo-Cane's positions following Mr Garcia's repudiation of contractual obligations at the 18 January 2008 meeting, which constituted an Event of Default under clause 46.1(e), entitling Sucden to act under clause 47.1(c). Sucden's actions in liquidation were not negligent and were contractually justified. Notice requirements under clause 46.1(a) for margin default were not strictly complied with, but repudiation and other Events of Default provided sufficient contractual basis for liquidation.

Citation
[2010] EWHC 2133 (Comm)
Parties
Claimant: Sucden Financial Limited (Formerly Sucden (UK) Limited); First Defendant: Fluxo-Cane Overseas Limited; Second Defendant: Manoel Fernando Garcia
Jurisdiction
England and Wales
Judgment Date
13 August 2010
Procedural Posture
Commercial Claim for Account Balance and Counterclaim for Damages / High Court Trial Judgment
Outcome
Claim allowed; counterclaim dismissed
Legal Topics
Breach of Contract, Default and Liquidation of Positions, Margin Calls, Repudiation, Broker Client Relationship, Derivatives Trading
Commercial Law Contract Law Financial Services Breach of Contract Default and Liquidation of Positions Margin Calls Repudiation Broker Client Relationship +1 more

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Parties

Sucden Financial Limited (Formerly Sucden (UK) Limited)

Claimant

Fluxo-Cane Overseas Limited

First Defendant

Manoel Fernando Garcia

Second Defendant

Procedural Posture

Commercial Claim for Account Balance and Counterclaim for Damages / High Court Trial Judgment

Legal Issues

  1. 1 Whether Sucden was contractually entitled to liquidate Fluxo-Cane's positions
  2. 2 Whether Sucden's conduct in liquidation was negligent or in breach of contract
  3. 3 Whether Fluxo-Cane repudiated the contract

Ratio Decidendi

Sucden was entitled to liquidate Fluxo-Cane's positions following Mr Garcia's repudiation of contractual obligations at the 18 January 2008 meeting, which constituted an Event of Default under clause 46.1(e), entitling Sucden to act under clause 47.1(c). Sucden's actions in liquidation were not negligent and were contractually justified. Notice requirements under clause 46.1(a) for margin default were not strictly complied with, but repudiation and other Events of Default provided sufficient contractual basis for liquidation.

Court Disposition

Claim allowed; counterclaim dismissed

Orders

  • Fluxo-Cane Overseas Limited to pay Sucden Financial Limited US$5,632,679.98 plus interest.
  • Counterclaim by Fluxo-Cane dismissed.