Barings (UK) Ltd v Deutsche Trustee Company Ltd & Ors (Rev 1) [2020] EWCA Civ 521 (09 April 2020)

Barings (UK) Ltd v Deutsche Trustee Company Ltd & Ors (Rev 1) [2020] EWCA Civ 521 (09 April 2020)

The ICMF is not payable on redemption of the Class F Notes under Condition 7(b)(i)(A) and Condition 11 waterfall because the contractual definitions and structure expressly limit payment of the ICMF to distributions under Condition 3, and the appellant's interpretation would require impermissible re-writing of the contract.

Citation
[2020] EWCA Civ 521
Parties
Defendant/appellant: Barings (UK) Limited; Claimant/respondent: Deutsche Trustee Company Limited; Defendant/respondent: Duchess VI CLO BV; Defendant/respondent: Napier Park European Credit Opportunities Fund Limited
Jurisdiction
England and Wales
Judgment Date
09 April 2020
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal dismissed
Legal Topics
Interpretation of Contractual Terms, Collateral Management Fees, Structured Finance, Redemption of Notes
Commercial Law Contract Law Financial Services Interpretation of Contractual Terms Collateral Management Fees Structured Finance Redemption of Notes

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Parties

Barings (UK) Limited

Defendant/appellant

Deutsche Trustee Company Limited

Claimant/respondent

Duchess VI CLO BV

Defendant/respondent

Napier Park European Credit Opportunities Fund Limited

Defendant/respondent

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether the Incentive Collateral Management Fee (ICMF) is payable on redemption of Class F Notes under Condition 7(b)(i)(A) and Condition 11 waterfall
  2. 2 Proper interpretation of the ICMF and Cumulative Subordinated Income (CSI) definitions in transaction documents

Ratio Decidendi

The ICMF is not payable on redemption of the Class F Notes under Condition 7(b)(i)(A) and Condition 11 waterfall because the contractual definitions and structure expressly limit payment of the ICMF to distributions under Condition 3, and the appellant's interpretation would require impermissible re-writing of the contract.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed.
  • Monies held to the order of the Claimant to abide the outcome of the proceedings shall be paid to the Class F Secured Income Noteholders, subject to specified provisions.