Lehman Brothers International (Europe)v Exotix Partners LLP

Lehman Brothers International (Europe)v Exotix Partners LLP

The court found the trade was for GDNs with a notional value of PEN 22,955 at a price of 91.5% of that value (USD 7,707.93), not for 22,955 GDNs. A term was implied to allow settlement of fractional GDNs by delivery of 22 GDNs and cash for 0.955 GDNs. LBIE was entitled to restitution for over-delivery and Exotix's windfall. If no implied term, the contract would be void for impossibility and LBIE would still be entitled to restitution.

Parties
Claimant: Lehman Brothers International (Europe) (in administration); Defendant: Exotix Partners LLP
Jurisdiction
England and Wales
Judgment Date
09 September 2019
Procedural Posture
Commercial Dispute / Final Judgment
Outcome
Judgment for claimant (LBIE)
Legal Topics
Interpretation of Contracts, Implied Terms, Mistake, Restitution, Market Practice, Failure of Consideration
Contract Law Restitution Commercial Law Interpretation of Contracts Implied Terms Mistake Market Practice Failure of Consideration

Case Brief

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Parties

Lehman Brothers International (Europe) (in administration)

Claimant

Exotix Partners LLP

Defendant

Procedural Posture

Commercial Dispute / Final Judgment

Legal Issues

  1. 1 What was the true subject matter and price of the oral trade agreement for Peruvian Government Global Depository Notes (GDNs)?
  2. 2 Should a term be implied to enable settlement of fractional GDNs?
  3. 3 Is LBIE entitled to restitutionary relief for over-delivery and Exotix's windfall?

Ratio Decidendi

The court found the trade was for GDNs with a notional value of PEN 22,955 at a price of 91.5% of that value (USD 7,707.93), not for 22,955 GDNs. A term was implied to allow settlement of fractional GDNs by delivery of 22 GDNs and cash for 0.955 GDNs. LBIE was entitled to restitution for over-delivery and Exotix's windfall. If no implied term, the contract would be void for impossibility and LBIE would still be entitled to restitution.

Court Disposition

Judgment for claimant (LBIE)

Orders

  • LBIE entitled to restitution for over-delivery of GDNs and coupon payments received by Exotix.
  • If parties disagree on quantum, further hearing to determine appropriate monetary relief.