Barings (UK) Ltd v Deutsche Trustee Company Ltd & Ors (Rev 1)

Barings (UK) Ltd v Deutsche Trustee Company Ltd & Ors (Rev 1)

The Collateral Manager is not entitled to an Incentive Collateral Management Fee when an option to redeem the Class F Notes under Condition 7(b)(i)(A) is exercised, as the definition of ICMF limits payment to Condition 3 and does not extend to Condition 7 or Condition 11.

Parties
Claimant/respondent: Barings (UK) Limited; First Defendant/respondent: Deutsche Trustee Company Limited; Second Defendant/appellant: Duchess VI CLO BV; Third Defendant/respondent: Napier Park European Credit Opportunities Fund Limited
Jurisdiction
England and Wales
Judgment Date
09 April 2020
Procedural Posture
Civil Appeal / Court of Appeal Judgment and Order
Outcome
Appeal dismissed
Legal Topics
Interpretation of Contractual Terms, Collateral Management Fee, Redemption of Notes, Priority of Payments
Commercial Law Contract Law Interpretation of Contractual Terms Collateral Management Fee Redemption of Notes Priority of Payments

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Parties

Barings (UK) Limited

Claimant/respondent

Deutsche Trustee Company Limited

First Defendant/respondent

Duchess VI CLO BV

Second Defendant/appellant

Napier Park European Credit Opportunities Fund Limited

Third Defendant/respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment and Order

Legal Issues

  1. 1 Proper interpretation of Incentive Collateral Management Fee (ICMF) definition
  2. 2 Whether ICMF is payable on redemption under Condition 7 and Condition 11
  3. 3 Application of waterfall provisions in Conditions 3, 7, and 11

Ratio Decidendi

The Collateral Manager is not entitled to an Incentive Collateral Management Fee when an option to redeem the Class F Notes under Condition 7(b)(i)(A) is exercised, as the definition of ICMF limits payment to Condition 3 and does not extend to Condition 7 or Condition 11.

Court Disposition

Appeal dismissed

Orders

  • Appeal 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