Lehman Brothers International (Europe) v Exxonmobil Financial Services BV [2016] EWHC 2699 (Comm) (28 October 2016)

Lehman Brothers International (Europe) v Exxonmobil Financial Services BV [2016] EWHC 2699 (Comm) (28 October 2016)

The Default Notice served by EMFS on 15 September 2008 was valid under the GMRA, as it sufficiently conveyed that an event was being treated as an Event of Default, even though it did not specify the event. The Default Valuation Notice was served in time and in accordance with the GMRA, and EMFS was entitled to value the securities as it did, including the use of actual sale prices and reasonable discounts for unsold securities. The contractual requirements for service and timing of notices were substantively complied with, and the valuation methodology adopted by EMFS was reasonable in the circumstances.

Citation
[2016] EWHC 2699 (Comm)
Parties
Claimant: Lehman Brothers International (Europe) (in administration); Defendant: ExxonMobil Financial Services BV
Jurisdiction
England and Wales
Judgment Date
28 October 2016
Procedural Posture
Commercial Dispute (high Court, Commercial Court) / Judgment After Trial
Outcome
Judgment for the defendant (EMFS) on the validity of the Default Notice and Default Valuation Notice; EMFS entitled to value the securities as it did under the GMRA.
Legal Topics
Repo Transactions, Default Notices, Valuation of Securities, Interpretation of Standard Form Contracts, Service of Contractual Notices
Commercial Law Banking and Finance Law Contract Law Insolvency Law Repo Transactions Default Notices Valuation of Securities Interpretation of Standard Form Contracts +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 12 Party arguments 2 Amounts and remedies 6
Sign in to unlock

Parties

Lehman Brothers International (Europe) (in administration)

Claimant

ExxonMobil Financial Services BV

Defendant

Procedural Posture

Commercial Dispute (high Court, Commercial Court) / Judgment After Trial

Legal Issues

  1. 1 Whether the Default Notice served by EMFS on 15 September 2008 was valid under the GMRA
  2. 2 Whether the Default Valuation Notice (DVN) was validly served and in time under the GMRA
  3. 3 Whether EMFS was entitled to value the securities as it did under the GMRA, including the use of actual sale prices, quotations, and discounts for unsold securities

Ratio Decidendi

The Default Notice served by EMFS on 15 September 2008 was valid under the GMRA, as it sufficiently conveyed that an event was being treated as an Event of Default, even though it did not specify the event. The Default Valuation Notice was served in time and in accordance with the GMRA, and EMFS was entitled to value the securities as it did, including the use of actual sale prices and reasonable discounts for unsold securities. The contractual requirements for service and timing of notices were substantively complied with, and the valuation methodology adopted by EMFS was reasonable in the circumstances.

Court Disposition

Judgment for the defendant (EMFS) on the validity of the Default Notice and Default Valuation Notice; EMFS entitled to value the securities as it did under the GMRA.

Orders

  • Declaration that the Default Notice served by EMFS on 15 September 2008 was valid under the GMRA.
  • Declaration that the Default Valuation Notice was validly served and in time.