Barclays Bank Plc v Unicredit Bank AG & Anor [2012] EWHC 3655 (Comm) (21 December 2012)

Barclays Bank Plc v Unicredit Bank AG & Anor [2012] EWHC 3655 (Comm) (21 December 2012)

Barclays' refusal to consent to early termination unless paid the balance of five years' fees was commercially reasonable within the meaning of the Guarantees. There was no operative shared or acquiesced understanding binding UniCredit to pay five years' fees, and the entire agreement clause precluded reliance on any such prior understanding. However, Barclays' insistence on five years' fees was not irrational, arbitrary, or capricious, and UniCredit's failure to offer any payment in return for consent further justified Barclays' position. The Guarantees were not validly terminated by UniCredit.

Citation
[2012] EWHC 3655 (Comm)
Parties
Claimant: Barclays Bank PLC; First Defendant: UniCredit Bank AG (formerly known as Bayerische Hypo- und Vereinsbank AG); Second Defendant: UniCredit Bank Austria AG
Jurisdiction
England and Wales
Judgment Date
21 December 2012
Procedural Posture
Commercial Court Dispute (claim for Declaration and Related Relief) / Judgment After Trial
Outcome
Claim allowed; declaration granted in favour of Barclays.
Legal Topics
Exercise of Contractual Discretion, Commercial Reasonableness, Securitisation Agreements, Early Termination Clauses, Estoppel by Convention, Interpretation of Entire Agreement Clauses
Contract Law Banking and Finance Law Exercise of Contractual Discretion Commercial Reasonableness Securitisation Agreements Early Termination Clauses Estoppel by Convention Interpretation of Entire Agreement Clauses

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Parties

Barclays Bank PLC

Claimant

UniCredit Bank AG (formerly known as Bayerische Hypo- und Vereinsbank AG)

First Defendant

UniCredit Bank Austria AG

Second Defendant

Procedural Posture

Commercial Court Dispute (claim for Declaration and Related Relief) / Judgment After Trial

Legal Issues

  1. 1 Whether Barclays exercised its discretion to withhold consent to early termination in a commercially reasonable manner under the Guarantees
  2. 2 Whether a shared or acquiesced understanding existed regarding payment of five years' fees on early termination for Regulatory Change
  3. 3 Whether the entire agreement clause precluded reliance on such understanding or estoppel

Ratio Decidendi

Barclays' refusal to consent to early termination unless paid the balance of five years' fees was commercially reasonable within the meaning of the Guarantees. There was no operative shared or acquiesced understanding binding UniCredit to pay five years' fees, and the entire agreement clause precluded reliance on any such prior understanding. However, Barclays' insistence on five years' fees was not irrational, arbitrary, or capricious, and UniCredit's failure to offer any payment in return for consent further justified Barclays' position. The Guarantees were not validly terminated by UniCredit.

Court Disposition

Claim allowed; declaration granted in favour of Barclays.

Orders

  • Declaration that Barclays' refusal of consent was commercially reasonable and the Guarantees have not been validly terminated.
  • No order for payment of five years' fees as a debt; parties to bear their own costs unless otherwise agreed.