WestLB Ag v Nomura Bank International Plc & Anor [2010] EWHC 2863 (Comm) (11 November 2010)

WestLB Ag v Nomura Bank International Plc & Anor [2010] EWHC 2863 (Comm) (11 November 2010)

The calculation agent's determination of the NAV at nil was valid and binding under the contract. The agent acted within its contractual discretion, did not act irrationally or in bad faith, and the use of a dealer poll was not inconsistent with market practice for illiquid assets. The contract expressly permitted delayed performance, and the claimant failed to show manifest error, irrationality, or bad faith.

Citation
[2010] EWHC 2863 (Comm)
Parties
Claimant: WestLB AG; First Defendant: Nomura Bank International PLC; Second Defendant: Nomura International PLC
Jurisdiction
England and Wales
Judgment Date
11 November 2010
Procedural Posture
Commercial Claim / High Court Trial Judgment
Outcome
Claim dismissed
Legal Topics
Valuation of Financial Instruments, Contractual Interpretation, Discretion of Calculation Agent, Good Faith and Rationality in Contractual Discretion
Commercial Law Banking and Finance Valuation of Financial Instruments Contractual Interpretation Discretion of Calculation Agent Good Faith and Rationality in Contractual Discretion

Case Brief

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Parties

WestLB AG

Claimant

Nomura Bank International PLC

First Defendant

Nomura International PLC

Second Defendant

Procedural Posture

Commercial Claim / High Court Trial Judgment

Legal Issues

  1. 1 Whether the calculation agent's valuation of the NAV at nil was valid and binding
  2. 2 Whether the calculation agent acted irrationally or in bad faith
  3. 3 Proper construction of the contractual terms regarding timing and method of valuation

Ratio Decidendi

The calculation agent's determination of the NAV at nil was valid and binding under the contract. The agent acted within its contractual discretion, did not act irrationally or in bad faith, and the use of a dealer poll was not inconsistent with market practice for illiquid assets. The contract expressly permitted delayed performance, and the claimant failed to show manifest error, irrationality, or bad faith.

Court Disposition

Claim dismissed

Orders

  • Claimant's claim for payment under the Notes is dismissed
  • No order for payment to the claimant