Marex Financial Ltd v Fluxo-Cane Overseas Ltd & Anor [2010] EWHC 2690 (Comm) (27 October 2010)

Marex Financial Ltd v Fluxo-Cane Overseas Ltd & Anor [2010] EWHC 2690 (Comm) (27 October 2010)

Marex was contractually entitled to close out FCO's positions and recover the resulting debt due to FCO's failure to meet margin calls and provide liquidation instructions. FCA's guarantee was enforceable according to its terms, which expressly provided for liability regardless of FCO's insolvency or liquidation. Marex complied with all relevant contractual and regulatory obligations.

Citation
[2010] EWHC 2690 (Comm)
Parties
Claimant: Marex Financial Limited; First Defendant: Fluxo-Cane Overseas Limited; Second Defendant: S/A Fluxo Comercio e Assessoria Internacional
Jurisdiction
England and Wales
Judgment Date
27 October 2010
Procedural Posture
Commercial Claim (debt Recovery and Guarantee Enforcement) / High Court Judgment After Hearing; Defendants Not Represented
Outcome
Judgment for the claimant against the second defendant (FCA); claim against first defendant (FCO) stayed due to liquidation proceedings.
Legal Topics
Brokerage Agreements, Guarantees, Margin Calls, Contractual Default, Exchange Rules Compliance, Liquidation of Positions
Commercial Law Contract Law Financial Services Law Brokerage Agreements Guarantees Margin Calls Contractual Default Exchange Rules Compliance +1 more

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Parties

Marex Financial Limited

Claimant

Fluxo-Cane Overseas Limited

First Defendant

S/A Fluxo Comercio e Assessoria Internacional

Second Defendant

Procedural Posture

Commercial Claim (debt Recovery and Guarantee Enforcement) / High Court Judgment After Hearing; Defendants Not Represented

Legal Issues

  1. 1 Whether Marex was contractually entitled to close out FCO's positions and recover the resulting debt
  2. 2 Whether FCA is liable under its guarantee for FCO's indebtedness to Marex
  3. 3 Whether the guarantee is enforceable notwithstanding FCO's insolvency or liquidation

Ratio Decidendi

Marex was contractually entitled to close out FCO's positions and recover the resulting debt due to FCO's failure to meet margin calls and provide liquidation instructions. FCA's guarantee was enforceable according to its terms, which expressly provided for liability regardless of FCO's insolvency or liquidation. Marex complied with all relevant contractual and regulatory obligations.

Court Disposition

Judgment for the claimant against the second defendant (FCA); claim against first defendant (FCO) stayed due to liquidation proceedings.

Orders

  • FCA to pay Marex US$4,246,094.97 plus contractual interest at 4% over 3 month LIBOR from 23 January 2008 until payment.
  • FCA to pay Marex's legal and enforcement costs under the guarantee.