Source: All England Reporter
Publisher Citation: [2016] All ER (D) 27 (Feb)
Neutral Citation: [2016] EWHC 146 (Comm)
Court: Queen's Bench Division, Commercial Court

Knowles J

Representation Tom Smith QC and Andrew Shaw (instructed by Quinn Emanuel Urquhart & Sullivan UK LLP) for GSO.
  Bankim Thanki QC and Rupert Allen (instructed by Simmons & Simmons LLP) for Barclays.
  Guy Philipps QC (instructed by Stephenson Harwood LLP) for HCC.
Judgment Dates: 29 January 2016


Commercial contract - Construction - Loan Market Association terms - Proceedings concerning secondary trading using standard form documentation published by 2012 Loan Market Association terms - Senior facilities agreement (SFA) providing that certain lenders could make credit facilities, including a surety bonds facility, available to certain borrowers - Third party (HCC) lender under credit facilites issuing surety bonds in favour of public authorities in Spain and Italy - Claimant (GSO) agreeing to buy from defendant (Barclays), and Barclays agreeing to buy from HCC, portion of commitment under surety bonds facility (trades) - Dispute arising as to identity of subject matter of trades where LMA standard form documentation used and where seller being lender under surety bonds facility - True construction of terms in LMA documentation relevant to calculation of settlement amount - Whether settlement amount being sum due from GSO or to GSO.

The Case

Commercial contract Construction. The Commercial Court ruled on the second case on the Financial List and held that, for a trade on the 2012 Loan Market Association terms in respect of a surety bonds facility: (i) the trade would, generally speaking, include the economic burden of the seller's obligations under issued surety bonds; (ii) the 'Purchased Assets' were, generally speaking, 'funded' to the extent that money had been paid by the seller under issued surety bonds, rather than to the extent by which the facility had been drawn by the mere issue of the surety bonds.

Practice Areas

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