CFH Clearing Ltd v Merrill Lynch International

CFH Clearing Ltd v Merrill Lynch International

MLI's Terms, specifically clause 7, did not incorporate general market practice into the contract governing the 27 FX transactions. The ISDA Master Agreement and Confirmations prevailed, and the alleged market practice was too vague and uncertain to be contractually binding. Therefore, CFH had no real prospect of success.

Parties
Appellant/claimant: CFH Clearing Limited; Respondent/defendant: Merrill Lynch International
Jurisdiction
England and Wales
Judgment Date
14 August 2020
Procedural Posture
Civil Appeal / Appeal From Summary Judgment in High Court
Outcome
Appeal dismissed
Legal Topics
Incorporation of Market Practice, Interpretation of Contractual Terms, Summary Judgment, Foreign Exchange Transactions
Contract Law Financial Markets Incorporation of Market Practice Interpretation of Contractual Terms Summary Judgment Foreign Exchange Transactions

Case Brief

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Parties

CFH Clearing Limited

Appellant/claimant

Merrill Lynch International

Respondent/defendant

Procedural Posture

Civil Appeal / Appeal From Summary Judgment in High Court

Legal Issues

  1. 1 Whether 'market practice' was incorporated into the contract via MLI's Terms
  2. 2 Whether clause 7 of MLI's Terms imposed a contractual obligation to comply with market practice
  3. 3 Whether the ISDA Master Agreement and Confirmations override MLI's Terms

Ratio Decidendi

MLI's Terms, specifically clause 7, did not incorporate general market practice into the contract governing the 27 FX transactions. The ISDA Master Agreement and Confirmations prevailed, and the alleged market practice was too vague and uncertain to be contractually binding. Therefore, CFH had no real prospect of success.

Court Disposition

Appeal dismissed

Orders

  • CFH's claim against MLI remains dismissed
  • No trial will be held on the issue of market practice incorporation