Credit Suisse International v Stichting Vestia Groep
2014
COMMERCIAL COURT
United Kingdom
CORAM
- MR JUSTICE ANDREW SMITH
Areas of Law
- Contract Law
- Corporate Law
- Commercial Law
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
Credit Suisse International sought €83,196,829 from Stichting Vestia Groep under an ISDA 2002 Agreement after terminating the Master Agreement for Vestia's failure to provide collateral. Vestia contested this amount, claiming it lacked the capacity and authority to enter into the disputed transactions. The court held that while some contracts were ultra vires, representations and warranties in the ISDA Master Agreement precluded Vestia from disputing liability. Credit Suisse's claim was allowed under the Master Agreement, or alternatively, via damages for breach of warranties.
Judgment
Mr Justice Andrew Smith:
Introduction
In these proceedings Credit Suisse International (“Credit Suisse”) claim €83,196,829 from Stichting Vestia Groep (“Vestia”), a Dutch social housing association (“SHA”), as money due under an International Swaps and Derivatives Association (“ISDA”) 2002 Agreement (the “Master Agreement”), including a Credit Support Annex (“CSA”). Credit Suisse say that they duly terminated the Master Agreement on 19 June 2012 after Vestia had failed to provide security due under the CSA and that the Early Termination Amount that therefore fell due was €83,196,829. Vestia dispute the claim on the grounds that:
Some of the derivative transactions (the “disputed transactions”) that Credit Suisse made with Vestia’s former Treasury & Control Manager, Mr Marcel de Vries, and recorded in confirmation documents countersigned by their then Chief Executive Officer and Managing Director, Mr Erik Staal, were never binding upon them because the disputed transactions were not within their objects and Vestia did not have capacity to make them. (I shall refer to this as the “capacity defence”.)
Neither Mr de Vries nor Mr Staal had authority to enter into the disputed transactions on Vestia’s behalf. (I shall call this the “authority defence”.)
The termination notice served by Credit Suisse was invalid because, when it was sent, Vestia were not in default of their obligations to provide security. (I shall call this the “notice defence”.)
In their particulars of claim Credit Suisse plead alternative claims that they are entitled to €113,223,299 or €93,669,401 on the basis that only some of the disputed transactions were valid and binding on Vestia, but during the trial they elected to limit the principal amount of their claim to €83,196,829.
Vestia do not accept that the sum of €83,196,829 is properly calculated in accordance with the Master Agreement (even assuming that their other defences fail), and they put forward various other figures, the lowest of which was €73.7 million. This dispute did not emerge on the pleadings, but the parties agreed to it being included in the list of issues, where, however, it is couched only in general terms. The parties did not specify the differences between them in any detail in their openings, and the issues were not identified. The time allowed for the trial was in any case inadequate. I therefore decided to defer this dispute for later determination, if necessary. The parties agreed to this, or at