Westlb AG v Nomura Bank International Plc & Anor [2012] EWCA Civ 495 (24 April 2012)

Westlb AG v Nomura Bank International Plc & Anor [2012] EWCA Civ 495 (24 April 2012)

The court held that Nomura Bank's physical delivery notice was invalid and did not constitute a binding determination of NAV. Nomura International's subsequent valuation of the Fund at nil, while irrational in method, was not dishonest. The court found no evidence that a rational valuation would have produced a value for the Fund assets exceeding the Nomura fee. Therefore, WestLB failed to prove any recoverable loss.

Citation
[2012] EWCA Civ 495
Parties
Appellant / Claimant: WESTLB AG; Respondent / Defendant: Nomura Bank International PLC; Respondent / Defendant: Nomura International PLC
Jurisdiction
England and Wales
Judgment Date
24 April 2012
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court, Queen's Bench Division
Outcome
Appeal dismissed
Legal Topics
Valuation of Financial Instruments, Calculation Agent Discretion, Damages for Breach of Contract, Interpretation of Financial Contracts, Redemption of Notes, Market Value Determination
Banking and Finance Contract Law Valuation of Financial Instruments Calculation Agent Discretion Damages for Breach of Contract Interpretation of Financial Contracts Redemption of Notes Market Value Determination

Case Brief

Summary, issues, holding and outcome

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Parties

WESTLB AG

Appellant / Claimant

Nomura Bank International PLC

Respondent / Defendant

Nomura International PLC

Respondent / Defendant

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Appeal From High Court, Queen's Bench Division

Legal Issues

  1. 1 Whether Nomura Bank's physical delivery notice constituted a binding determination of NAV under the contract
  2. 2 Whether Nomura International's valuation of the Fund at nil was irrational or in bad faith
  3. 3 Whether the court should substitute its own discounted value for the Fund assets in the absence of a valid contractual valuation

Ratio Decidendi

The court held that Nomura Bank's physical delivery notice was invalid and did not constitute a binding determination of NAV. Nomura International's subsequent valuation of the Fund at nil, while irrational in method, was not dishonest. The court found no evidence that a rational valuation would have produced a value for the Fund assets exceeding the Nomura fee. Therefore, WestLB failed to prove any recoverable loss.

Court Disposition

Appeal dismissed

Orders

  • No damages awarded to WestLB AG
  • No binding NAV determination found in Nomura Bank's physical delivery notice