Publisher Citation: [2014] All ER (D) 03 (Feb)
Neutral Citation: [2014] EWHC 142 (Comm)
Court: Queen's Bench Division, Commercial Court

Burton J

Representation David Wolfson QC and Adam Rushworth (instructed by Watson Farley & Williams) for the claimant.
  Sonia Tolaney QC and Tom de Vecchi (instructed by Simmons & Simmons LLP) for the defendant.
Judgment Dates: 31 January 2014


Swap agreement - Interest rate swap agreement - Validity - Defendant entering two interest rate swaps with Italian local authority - Claimant subsequently entering third swap with authority - Italian court finding third swap impermissible derivative transaction - Claimant issuing proceedings against defendant on basis second swap void - Whether second swap being void.

The Case

Swap agreement Interest rate swap agreement. The defendant entered two interest rate swaps with an Italian local authority. The claimant entered a third swap with the authority, which the Italian Court of Auditors of the Regional Chamber of Control for Campania found to be an impermissible derivative transaction under a decree. The claimant issued proceedings against the defendant on the basis that the second swap had been void. The Commercial Court, in dismissing the claim, held that the claimant had failed to show that: (i) the decree did not permit restructuring of principal; (ii) the second swap had resulted in an increasing profile; and (iii) there was a premium.

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