Cheyne Capital (Management) UK (LLP) v Deutsche Trustee Company Ltd

Cheyne Capital (Management) UK (LLP) v Deutsche Trustee Company Ltd

Clause 26.4(b) requires actual confirmation from all Rating Agencies that the appointment of a successor Issuer Servicer or Issuer Special Servicer will not result in an Adverse Rating Event. The failure of a Rating Agency to provide such confirmation, even as a matter of policy, cannot be ignored. The exception for Noteholder approval is the intended mechanism for such situations.

Parties
Appellant/first Defendant: Cheyne Capital (Management) UK (LLP); Respondent/claimant: Deutsche Trustee Company Limited; Respondent/second Defendant: DECO 15-PAN EUROPE 6 LIMITED
Jurisdiction
England and Wales
Judgment Date
17 May 2016
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Interpretation of Contract Clauses, Securitisation Transactions, Conditions Precedent, Commercial Common Sense
Contract Law Commercial Law Interpretation of Contract Clauses Securitisation Transactions Conditions Precedent Commercial Common Sense

Case Brief

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Parties

Cheyne Capital (Management) UK (LLP)

Appellant/first Defendant

Deutsche Trustee Company Limited

Respondent/claimant

DECO 15-PAN EUROPE 6 LIMITED

Respondent/second Defendant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Proper interpretation of clause 26.4(b) of the Issuer Servicing Agreement
  2. 2 Whether failure of a Rating Agency to provide confirmation can be ignored if it is their policy not to provide such confirmations
  3. 3 Effect of the exception for Noteholder approval in clause 26.4(b)

Ratio Decidendi

Clause 26.4(b) requires actual confirmation from all Rating Agencies that the appointment of a successor Issuer Servicer or Issuer Special Servicer will not result in an Adverse Rating Event. The failure of a Rating Agency to provide such confirmation, even as a matter of policy, cannot be ignored. The exception for Noteholder approval is the intended mechanism for such situations.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed.