Deutsche Trustee Company Ltd v Cheyne Capital (Management) UK (LLP) & Anor [2015] EWHC 2282 (Ch) (31 July 2015)

Deutsche Trustee Company Ltd v Cheyne Capital (Management) UK (LLP) & Anor [2015] EWHC 2282 (Ch) (31 July 2015)

Clause 26.4(b) requires confirmation from all Rating Agencies; absence of confirmation from any prevents replacement unless all classes of Noteholders approve the successor by Extraordinary Resolution. The natural meaning of the clause prevails, and the second limb provides a partial solution to the problem of non-confirmation. Cheyne's interpretation is inconsistent with clause 29.13 and does not warrant re-writing the contract.

Citation
[2015] EWHC 2282 (Ch)
Parties
Claimant: Deutsche Trustee Company Limited; First Defendant: Cheyne Capital (Management) UK (LLP); Second Defendant: DECO 15 – PAN EUROPE 6 LIMITED
Jurisdiction
England and Wales
Judgment Date
31 July 2015
Procedural Posture
Part 8 Claim / Judgment
Outcome
Claim determined in favour of the Claimant's interpretation.
Legal Topics
Interpretation of Servicing Agreements, Commercial Mortgage Backed Securitisation, Rating Agency Confirmations, Replacement of Special Servicer
Commercial Law Banking and Finance Contract Law Interpretation of Servicing Agreements Commercial Mortgage Backed Securitisation Rating Agency Confirmations Replacement of Special Servicer

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Parties

Deutsche Trustee Company Limited

Claimant

Cheyne Capital (Management) UK (LLP)

First Defendant

DECO 15 – PAN EUROPE 6 LIMITED

Second Defendant

Procedural Posture

Part 8 Claim / Judgment

Legal Issues

  1. 1 Whether clause 26.4(b) of the Issuer Servicing Agreement permits replacement of the Issuer Special Servicer when a Rating Agency declines to confirm that the appointment will not result in an Adverse Rating Event

Ratio Decidendi

Clause 26.4(b) requires confirmation from all Rating Agencies; absence of confirmation from any prevents replacement unless all classes of Noteholders approve the successor by Extraordinary Resolution. The natural meaning of the clause prevails, and the second limb provides a partial solution to the problem of non-confirmation. Cheyne's interpretation is inconsistent with clause 29.13 and does not warrant re-writing the contract.

Court Disposition

Claim determined in favour of the Claimant's interpretation.

Orders

  • Clause 26.4(b) is to be interpreted as requiring confirmation from all Rating Agencies unless each class of Noteholders approves the successor by Extraordinary Resolution.