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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Altman v Australia and New Zealand Banking Group Ltd. [2002] EWHC 2488 (Comm) (25 November 2002) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2002/2488.html Cite as: [2002] EWHC 2488 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL | ||
B e f o r e :
____________________
ADOLFO ALTMAN | Claimant | |
- and - | ||
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED | Defendant |
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Mr C Flint QC and Mr J Herberg (instructed by Allen & Overy) for the Defendant
Hearing dates : 4, 5 November 2002
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Crown Copyright ©
Mr Justice Andrew Smith:
"CONFIRMATION
…
This confirmation is in substitution for and is not in addition to our confirmation dated 23rd October 1997 under reference 13333/13334 RUPRINWI which is hereby cancelled.
Re: Russian Restructured Loans (the "Asset") as rescheduled pursuant to the 1996 Financing proposals for Vnesheconombank of the Russian Federation (the "Financing Proposals"); terms defined in the Financing Proposals have the same meaning herein.
We are please to confirm that following sale (on a when and if rescheduled basis) of the Asset, on the following terms:
Trade Date: 22nd October 1997
Settlement Date: The date on which all conditions precedent to the rescheduling of the Asset shall be satisfied (the "Rescheduling Date")
Obligor: Vnesheconombank
Interest Basis: Six month US Dollar LIBOR plus 13/16 pct
Face Value: USD1,000,000.00
Consideration: USD767,500.00 being 76.75pct of Face Value, of which USD76,750.00 (the "Deposit") shall be paid to Seller not later than 30th October 1997 and the balance of USD690,750.00 on the Rescheduling Date which sums Buyer authorises Seller to debit from the account of Buyer with the Seller.
Governing Law: English
Expiration: If the Rescheduling Date has not occurred prior thereto, the agreement reflected in this Confirmation will expire upon whichever is the earlier of:-
(i) 31st December 1997; or
(ii) the date on which a material change in the terms of the Asset, as determined by the Emerging Markets Traders Association, from those set forth in the Financing Proposals, occurs.
(A) In the event that this agreement expires an amount equivalent to the Deposit plus interest accrued thereon at Libid shall be paid by Seller to Buyer at the account of Buyer with Seller.
(B) For the avoidance of doubt, the Deposit shall belong to Seller and shall be held in Seller's name. In the event that in Seller's opinion at any time the ratio of the market price of the Asset to the Balance Owing falls to or below 1.054 to 1, Seller shall be entitled to call upon Buyer to pay a cash sum to Seller sufficient to reduce the Balance Owing so as to bring such ratio back to 1.11 to 1 or better, and failing receipt by Seller of any cash sum within 1 business day of Seller calling same, Seller shall have the right (but not obligation) to sell the Asset. In the event of Seller effecting such a sale, then if the amount due to Seller on the Rescheduling Date with respect to such sale exceeds the Balance Owing, then on the Rescheduling Date Seller shall remit such excess to Buyer, and if the Balance Owing exceeds the amount due to the Seller on the Rescheduled Date with respect to such sale, Buyer shall remit such excess amount to Seller upon Seller's demand, provided always that in the event that this agreement expires, Seller shall pay to Buyer an amount equivalent to any such excess amount received by Seller from Buyer together with the sum payable to Buyer pursuant to (A) above. (For the purposes of the foregoing, the "Balance Owing" shall mean the amount that is from time to time owed by the Buyer to the Seller, whether contingently or otherwise, pursuant to this agreement).
Without prejudice to the obligations of Buyer hereunder the obligations of Seller to complete the transaction hereby contemplated shall be subject to and dependent upon Seller's receipt from Buyer of compliance documentation for Buyer satisfactory in all respects to Seller ("Satisfactory Completion"). Buyer shall be required to make the payment(s) detailed herein on the date specified notwithstanding that Satisfactory Completion may not have occurred. Subject to Satisfactory Completion and to the terms of any documentation relating hereto executed by Seller and Buyer, Buyer shall be entitled to receive any interest accruing on the asset the subject hereof from the date of receipt by Seller of such payment(s). Buyer shall promptly deliver to Seller any information and documentation that Seller may require in connection with the foregoing.
Except in so far as anything herein conflicts therewith, this transaction is subject to all "agreed Market Practices" adopted by the Emerging Markets Traders Association…."
i) That he was entitled to be treated by the Defendant as a Private Customer for the purposes of the IMRO Rules.
ii) That the contract (if any) made on or around 22nd October 1997 was not upon the terms contended in sub-paragraphs 39(a) and (b) of the Defence.
iii) That such contract (if any) was a CLT for the purposes of the IMRO Rules.
"….the Defendant will contend
(a) that under the terms of the W & I Contract as evidenced by, inter alia, the Confirmation the Defendant was entitled to discharge its obligations on the Settlement Date by inviting the Claimant to enter into a participation arrangement (by way of a Participation Agreement or a Deferred Purchase Agreement) and performing the same; alternatively,
(b) that there is to be implied into the W & I Contract, by reason of custom and practice and/or for reasons of business efficacy, a term that the interest would or could be passed under the contract on the Settlement Date pursuant to the Defendant's standard Deferred Purchase Agreement and/or Participation Agreement as the case may be".
The term "Participation Agreement" is not defined in the pleading, but a form of Participation Agreement used by ANZ is a schedule to the Defence. The term "Deferred Purchase Agreement" is defined to mean a Master Deferred Purchase Agreement (Loans), and ANZ's form of such an agreement is another schedule to the Defence. It is sufficient for the purpose of this application to say that the Deferred Purchase Agreement is similar to the Participation Agreement except that it extends credit to the investor. As for the form of Participation Agreement that was appended to the Defence, its terms were very similar to those sent to IAA on 20 November 1997, but are not identical. ANZ say that the differences are insignificant variations in drafting, and that seems to me to be the case.
i) Although I agree that the term "instrument" is not an immediately natural description of the W & I Contract, the term is given an extended definition in Schedule 1 of the Act, including "references to any record whether or not in the form of a document": see paragraph 28(1)(b).
ii) In response to the submission that the W & I Contract does not merely give Mr Altman an entitlement but puts him under an obligation, ANZ rely in part upon their submission that the true effect of the W & I Contract is that Mr Altman is entitled to choose whether to enter into a participation agreement with them or to have another bank or financial institution hold the Prin as his nominee. I am far from convinced that this contention can be sustained (ever assuming ANZ contemplate a nomineeship consistent with clause 45(9) of the Restructuring Agreement). However, I do not consider that ANZ's argument that the W & I Contract falls with paragraph 4 of the Schedule necessary depends upon this part of their argument. It seems to be arguable that an obligation to subscribe entails an entitlement to do so, and certainly I am not prepared to conclude otherwise upon an application of this kind.