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Another roll of the dice: the elusive line between hedging and speculation
The question of whether a derivative transaction is properly characterised as a hedge or as speculation has long vexed the English courts. It has arisen recently in a decision of the Commercial Court dealing with the capacity of an Italian local authority to transact interest-rate swaps. This article reviews the caselaw on the question and asks: (i) is it possible for the courts to make any distinction between hedging transactions and speculative transactions?; and (ii) what test should be applied?
25 March 2024SFDR RTS and ESG sectoral amendments: mismatches and implementation challenges
On 6 April 2022, the European Commission adopted the final Regulatory Technical Standards (RTS) under the Sustainable Finance Disclosure Regulation (SFDR) and its Annexes. The RTS was previously supposed to apply from July 2022 but will now instead apply from 1 January 2023.
25 March 2024Burdening assignees with arbitration agreements via “conditional benefits”
In this article, the author compares two concepts that seek to explain why an assignee of a chose in action may be burdened by an arbitration agreement to which it is not privy. He posits that, of the “conditional benefits” concept and the “subject to equities” principle, the latter provides the better explanation.
25 March 2024Digital assets: the mystery of the “link”
In this article Hin Liu explores the meaning of a “linked” or “exogenous” cryptoasset and analyses whether holding a token (in this case non-fungible tokens (NFTs), security tokens and physical goods tokens) that is purportedly linked to an underlying asset or right carries substantive legal effect(s). Where the token is linked to legal rights outside the blockchain, he analyses whether the token itself constitutes property.
25 March 2024Transfer restrictions in leveraged lending transactions: time for a re-assessment?
European leveraged lending practitioners will need no telling that documentary terms have been something of a one-way moveable feast in favour of borrowers and sponsors for a number of years. In particular, the extent of a lender’s right to transfer its participation in a loan facility to another institution has been gradually eroded, with the “new normal” including significant fetters on transfer rights. Meanwhile, capital reforms continue to increase the cost to bank lenders of holding loans on their balance sheets and have resulted in banks seeking to optimise their balance sheets through sales in the secondary loan market and through the use of synthetic risk transfers. Is it therefore, time for bank lenders to re-assess the acceptability of transfer restrictions and to push for fewer restrictions?1
25 March 2024Quincecare and the liability of receiving banks: the Canadian story
This article analyses a line of Canadian case law that addresses the liability of a receiving bank in negligence to a third party payor. The decision of the Ontario Court of Justice, Royal Bank of Canada v Stangl [1992] 32 ACNS (3d) 17 (Stangl), suggested that the bank may in some circumstances owe a duty of care to the payor in crediting and paying out sums it receives. This article concludes that the ratio in Stangl is not supported by other Canadian or English case law, nor sound in principle, and therefore unlikely to be followed.
25 March 2024Seeing the world differently: litigation arising from ESG-related disclosure
A proliferation in ESG-related disclosure requirements for companies – and public awareness of the same – is driving an increase in litigation. This article examines the reporting and disclosure obligations for companies in the UK, and then considers how shareholders or activists might litigate when firms are found to have given incorrect or misleading information. After concluding that there are potential difficulties with proving reliance and causation, the article suggests practical steps companies might consider to try to limit the risk of liability.
25 March 2024Takeover Code Changes 2021: can lenders be forced to fund an illegal deal?
The new edition (13th) of the Takeover Code took effect on 5 July 2021. One of the amendments to Rule 13 removed the special status given to UK and EU competition clearances, in part due to recognition of the diminished role of the European Commission in domestic takeovers. A question arising therefrom is how will this impact firm financing put in place by lenders to support the takeover offers? In this article, the author looks at the possible legal and practical answers to this question.
25 March 2024Blu-sky thinking: the Interfoto principle and terms incorporated by reference
In this article the authors consider the implications of Blu-Sky Solutions v Be Caring [2021] EWHC 2619, including in the lending and derivatives contracts context, which suggest that a party provides to its counterparty a greater degree of notice in relation to onerous or unusual clauses which are intended to be incorporated by reference.
25 March 2024Could’ve, would’ve, should’ve: commercial fraud and the reasonably diligent claimant
Over the last two years there have been a number of reported cases dealing with the proper interpretation of s 32 of the Limitation Act 1980 which postpones the normal limitation period in cases of fraud, concealment, or mistake. From the Supreme Court’s judgment in the Test Claimants in the Franked II Group Litigation v Revenue and Customs Commissioners [2020] UKSC 47 to the Court of Appeal’s decision in OT Computers Ltd v Infineon Technologies AG [2021] EWCA Civ 501, there have been many recent judgments which clarify concepts like “reasonable diligence”. A further recent decision of the High Court in Arif v Sanger [2021] EWHC 3475 (QB) applies the case law in the context of commercial fraud and corporate directors. This article will bring all of these authorities together and review the major developments to the law of limitation.
25 March 2024
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