K/S Preston Street v Santander (UK) Plc

K/S Preston Street v Santander (UK) Plc

Clause 6.2 of the loan agreement entitles the lender to indemnity for losses actually incurred as a result of early repayment, but not for future or contingent losses calculated on an estimated basis. The defendant is entitled in principle to recover losses suffered up to the date of demand, but not to a summary judgment for future losses. The sums recoverable under clause 6.2 are in addition to any prepayment fees under clause 9.

Parties
Claimant: K/S Preston Street; Defendant: Santander (UK) PLC
Jurisdiction
England and Wales
Judgment Date
14 March 2012
Procedural Posture
Civil (commercial/contract) / Summary Judgment Applications by Both Parties
Outcome
Summary judgment refused for both parties; defendant entitled in principle to recover actual losses incurred, subject to quantification at a future hearing.
Legal Topics
Loan Agreements, Indemnity Clauses, Summary Judgment, Early Loan Repayment, Escrow Arrangements
Contract Law Banking and Finance Loan Agreements Indemnity Clauses Summary Judgment Early Loan Repayment Escrow Arrangements

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Parties

K/S Preston Street

Claimant

Santander (UK) PLC

Defendant

Procedural Posture

Civil (commercial/contract) / Summary Judgment Applications by Both Parties

Legal Issues

  1. 1 Whether the defendant is entitled to recover the sum claimed under clause 6.2 of the loan agreement
  2. 2 Whether the defendant can recover future losses or only losses actually incurred at the time of demand
  3. 3 Proper construction of indemnity and prepayment provisions in the loan agreement

Ratio Decidendi

Clause 6.2 of the loan agreement entitles the lender to indemnity for losses actually incurred as a result of early repayment, but not for future or contingent losses calculated on an estimated basis. The defendant is entitled in principle to recover losses suffered up to the date of demand, but not to a summary judgment for future losses. The sums recoverable under clause 6.2 are in addition to any prepayment fees under clause 9.

Court Disposition

Summary judgment refused for both parties; defendant entitled in principle to recover actual losses incurred, subject to quantification at a future hearing.

Orders

  • Further hearing or enquiry to determine actual losses incurred by the defendant as at the date of demand.
  • Release of escrow funds stood over until after further evidence is filed and served.