MHB- Bank Ag v Shanpark Ltd [2015] EWHC 408 (Comm) (25 February 2015)

MHB- Bank Ag v Shanpark Ltd [2015] EWHC 408 (Comm) (25 February 2015)

Set-off of mis-selling claims against Early Termination Amounts is contractually excluded under the ISDA Master Agreement and the STFA. Only netting as defined in sections 2(c) and 6(e) is permitted, and set-off under section 6(f) is not available to Shanpark in the circumstances of termination following a Termination Event. The assignment to MHB is valid, and Shanpark's defences have no realistic prospect of success.

Citation
[2015] EWHC 408 (Comm)
Parties
Claimant: MHB-Bank AG; Defendant: Shanpark Ltd; Defendant: Vendart Limited; Defendant: Structadene Limited
Jurisdiction
England and Wales
Judgment Date
25 February 2015
Procedural Posture
Summary Judgment Application / High Court, Commercial Court, Post Assignment, Summary Judgment
Outcome
Summary judgment granted in favour of MHB-Bank AG against all defendants.
Legal Topics
ISDA Master Agreement, Set Off, Netting, Interest Rate Swaps, Assignment of Claims, Contractual Interpretation
Contract Law Banking Law Financial Derivatives ISDA Master Agreement Set Off Netting Interest Rate Swaps Assignment of Claims +1 more

Case Brief

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Parties

MHB-Bank AG

Claimant

Shanpark Ltd

Defendant

Vendart Limited

Defendant

Structadene Limited

Defendant

Procedural Posture

Summary Judgment Application / High Court, Commercial Court, Post Assignment, Summary Judgment

Legal Issues

  1. 1 Whether Shanpark and other defendants can set-off mis-selling claims against Early Termination Amounts under ISDA Master Agreements and related loan agreements
  2. 2 Proper construction and interaction of ISDA Master Agreement sections 2(c), 6(e), 6(f), and STFA clauses 30.3 and 31

Ratio Decidendi

Set-off of mis-selling claims against Early Termination Amounts is contractually excluded under the ISDA Master Agreement and the STFA. Only netting as defined in sections 2(c) and 6(e) is permitted, and set-off under section 6(f) is not available to Shanpark in the circumstances of termination following a Termination Event. The assignment to MHB is valid, and Shanpark's defences have no realistic prospect of success.

Court Disposition

Summary judgment granted in favour of MHB-Bank AG against all defendants.

Orders

  • Defendants to pay Early Termination Amounts to MHB-Bank AG.
  • MHB undertakes not to enforce security without notice to Shanpark to allow application to court.