Allianz Global Investors GmbH & Ors v Barclays Bank Plc & Ors (Rev1) [2022] EWCA Civ 353 (23 March 2022)

Allianz Global Investors GmbH & Ors v Barclays Bank Plc & Ors (Rev1) [2022] EWCA Civ 353 (23 March 2022)

Redemptions by investors at a lower NAV do not constitute avoidance or passing on of loss by the Funds for the purposes of reducing recoverable damages. The benefit to the Funds from paying less on redemption is a collateral benefit arising from independent contractual arrangements, not from the wrongdoing. The reflective loss principle bars claims by redeeming shareholders for diminution in redemption value, and analogous principles apply to trusts and partnerships. Therefore, the Funds' recoverable loss is not reduced by redemptions, and the Banks' pass-on/avoided loss defence fails as a matter of law.

Citation
[2022] EWCA Civ 353
Parties
Claimants/appellants: Allianz Global Investors GmbH and Others (1st-19th, 24th-40th, 43rd-172nd & 175th Claimants); Defendant/respondent: Barclays Bank PLC; Defendant/respondent: Citibank N.A.; Defendant/respondent: Citigroup Inc.; Defendant/respondent: HSBC Bank PLC; Defendant/respondent: JP Morgan Chase Bank N.A.; Defendant/respondent: JP Morgan Chase & Co; Defendant/respondent: Nat West Markets PLC; Defendant/respondent: UBS AG
Jurisdiction
England and Wales
Judgment Date
23 March 2022
Procedural Posture
Civil Appeal / Appeal From High Court (commercial Court) to Court of Appeal
Outcome
Appeal allowed
Legal Topics
Pass on Defence, Reflective Loss, Collateral Benefit, Standing to Sue, Mitigation of Loss, Article 101 TFEU, Section 2 Competition Act 1998
Competition Law Commercial Law Trusts Law Company Law Partnership Law Pass on Defence Reflective Loss Collateral Benefit +4 more

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Parties

Allianz Global Investors GmbH and Others (1st-19th, 24th-40th, 43rd-172nd & 175th Claimants)

Claimants/appellants

Barclays Bank PLC

Defendant/respondent

Citibank N.A.

Defendant/respondent

Citigroup Inc.

Defendant/respondent

HSBC Bank PLC

Defendant/respondent

JP Morgan Chase Bank N.A.

Defendant/respondent

JP Morgan Chase & Co

Defendant/respondent

Nat West Markets PLC

Defendant/respondent

UBS AG

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From High Court (commercial Court) to Court of Appeal

Legal Issues

  1. 1 Whether investment funds' losses are avoided or 'passed on' to redeeming investors for the purposes of damages claims against banks for FX market manipulation.
  2. 2 Whether redeeming investors acquire a cause of action for losses suffered by the fund upon redemption at a lower NAV.
  3. 3 Whether the 'pass-on' or avoided loss defence is available to the banks in law, and whether the reflective loss principle or collateral benefit doctrine applies.

Ratio Decidendi

Redemptions by investors at a lower NAV do not constitute avoidance or passing on of loss by the Funds for the purposes of reducing recoverable damages. The benefit to the Funds from paying less on redemption is a collateral benefit arising from independent contractual arrangements, not from the wrongdoing. The reflective loss principle bars claims by redeeming shareholders for diminution in redemption value, and analogous principles apply to trusts and partnerships. Therefore, the Funds' recoverable loss is not reduced by redemptions, and the Banks' pass-on/avoided loss defence fails as a matter of law.

Court Disposition

Appeal allowed

Orders

  • Strike-out of the Banks' pass-on/avoided loss defence granted; the Banks' defence on this point is struck out.