LIBOR re-visited: Deutsche Bank and Others v Unitech Global and Another
Following regulatory investigations into LIBOR rate rigging and the fining of Barclays Bank by the Financial Services Authority (FSA) last summer, the claimants in Graiseley Properties Ltd and Others v Barclays Bank were permitted to amend their claim to include allegations relating to LIBOR manipulation. However, more recently in Deutsche Bank and Others v Unitech and Another permission to amend on a similar basis was refused, highlighting the difficulties claimants may encounter in bringing LIBOR manipulation claims against the banks.
Deutsche Bank sued Unitech under an interest rate swap, alleging it owed $11m (£7m) and had not repaid a $150m (£98m) loan to the lending group. Unitech countersued, claiming that the rate swap was represented and recommended to it as a suitable product when it was not and that it had been induced to enter into the agreements with Deutsche Bank by misrepresentations.
Emphasis was placed on the loan facility agreement, which provided for payment of interest by reference to LIBOR, defined in the definitions section by reference to the applicable screen rate as displayed for the relevant currency and term, or overdue amount, on the appropriate page of the Reuters or Telerate screens…
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