Goldman Sachs International v Videocon Global Ltd and Another

Court:Queen's Bench Division (Commercial Court)
Docket Number:Case No: 2012 FOLIO 1049
Judge:Mr. Justice Teare
Judgment Date:19 Dec 2014
Jurisdiction:England & Wales
Neutral Citation:[2014] EWHC 4267 (Comm)

[2014] EWHC 4267 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Rolls Building, 7 Rolls Buildings

Fetter Lane, London EC4A 1NL

Before:

Mr. Justice Teare

Case No: 2012 FOLIO 1049

Between:
Goldman Sachs International
Claimant
and
(1) Videocon Global Limited
(2) Videocon Industries Limited
Defendants

Nik Yeo (instructed by Allen & Overy LLP) for the Claimant

Giles Wheeler (instructed by TLT LLP) for the Defendants

Hearing date: 10 December 2014

Mr. Justice Teare
1

This is an application by the Claimant, Goldman Sachs, for summary judgment against the Defendants, Videocon Global Limited and Videocon Industries Limited. Unusually, this is the Claimant's second attempt at securing summary judgment.

2

The Claimant's claim is for US$4,066,542.90, plus interest and costs, being the sum said to be owing to the Claimant under a series of ISDA Master Agreement based currency swaps which were duly terminated as of 2 December 2011 after the First Defendant failed to pay margin calls. The Claimant claims the same amount from the Second Defendant under a guarantee. By notice dated 14 December 2011 the Claimant set out some calculations of the sum claimed in purported compliance with clause 6(d) of the ISDA Master Agreement.

3

As a result of the decision of Mr. Knowles CBE QC (as he then was) in September 2013 on the first summary judgment application ( [2013] EWHC 2843 (Comm)) there is no dispute that the Defendants are, in principle, liable to the Claimant. However, Mr. Knowles held that in breach of clause 6(d) of the ISDA Master Agreement the Claimant had failed to give the Defendants sufficient details of how the sum claimed had been calculated. The Claimant was not therefore entitled to summary judgment for the sum claimed.

4

On 7 March 2014 the Claimant provided the Defendants with further details of how the sum claimed had been calculated. There is no longer any suggestion that the Defendants lack sufficient details of the sum claimed. It is the service of those further details which justifies this second attempt at securing summary judgment.

5

However, Mr. Wheeler, on behalf of the Defendants submitted that in breach of clause 6(d) the further details had not been provided "on or as soon as reasonably practicable" following the Early Termination Date. Indeed the details were served well over two years after the Early Termination Date. It was therefore submitted that the Claimant had not complied with the contractual conditions for the sum to become due for payment and in consequence the Claimant cannot claim payment and is not entitled to summary judgment.

6

In response to this argument Mr.Yeo, on behalf of the Claimant, took four points. First, he submitted that it was unarguable that the further details had not been provided "on or as soon as reasonably practicable" following the Early Termination Date. Second, if such a contention is arguable then, on the true construction of the ISDA Master Agreement, the sum claimed is payable but the Defendants may counterclaim for any damages caused by the lateness of the provision of adequate details. Third, in any event, on the true construction of the ISDA Master Agreement the obligation to provide notice "on or as soon as reasonably practicable" following the Early Termination Date applies only to the calculation of the sum claimed and not to notification of the details of the calculation. Fourth, and in any event, the same sum can be claimed as damages.

7

Before considering each of these points it is necessary to set out clause 6 (d) of the ISDA Master Agreement.

"(d) Calculations.

(i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation.

(ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as result of an Event of Default (and on the day which is two Local Business days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed."

The timing of the notice

8

The question for the court on this application for summary judgment is whether the Defendants have any real prospect of establishing at trial that the second notice of details was not delivered "on or as soon as reasonably practicable" following the Early Termination Date.

9

Mr. Yeo submitted, in an elaborate argument, that the second notice, notwithstanding that it was served well over two years after the Early Termination Date, was served "on or as soon as reasonably practicable" following the Early Termination Date. The stages in this argument were these:

i) Since it...

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