MHB- Bank Ag v Shanpark Ltd

MHB- Bank Ag v Shanpark Ltd

The ISDA Master Agreement and STFA do not permit the defendants to set-off their mis-selling claims against the Early Termination Amounts. Set-off under s. 2(c) is limited to netting contemporaneous payment obligations under the same transaction, and s. 6(f) is not engaged because termination occurred by Additional Termination Event, not Event of Default. STFA clause 30.3 further excludes set-off rights for Shanpark. There is no realistic prospect of success in the defence, and summary judgment is appropriate.

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
Commercial / Summary Judgment Application
Outcome
summary judgment granted for claimant
Legal Topics
ISDA Master Agreement, Set Off, Netting, Early Termination, Mis Selling, Assignment of Claims
Contract Law Banking Law ISDA Master Agreement Set Off Netting Early Termination Mis Selling Assignment of Claims

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Parties

MHB-Bank AG

Claimant

Shanpark Ltd

Defendant

Vendart Limited

Defendant

Structadene Limited

Defendant

Procedural Posture

Commercial / Summary Judgment Application

Legal Issues

  1. 1 Whether Shanpark and other defendants can set-off mis-selling claims against Early Termination Amounts under ISDA Master Agreement and STFA
  2. 2 Whether s. 2(c) or s. 6(f) of the ISDA Master Agreement permit set-off of unliquidated damages
  3. 3 Effect of STFA clauses 30.3 and 31 on set-off rights

Ratio Decidendi

The ISDA Master Agreement and STFA do not permit the defendants to set-off their mis-selling claims against the Early Termination Amounts. Set-off under s. 2(c) is limited to netting contemporaneous payment obligations under the same transaction, and s. 6(f) is not engaged because termination occurred by Additional Termination Event, not Event of Default. STFA clause 30.3 further excludes set-off rights for Shanpark. There is no realistic prospect of success in the defence, and summary judgment is appropriate.

Court Disposition

summary judgment granted for claimant

Orders

  • Summary judgment entered for MHB-Bank AG against Shanpark Ltd, Vendart Limited, and Structadene Limited.
  • Defendants are to pay Early Termination Amounts as claimed.