The 1992 ISDA Master Agreement: to email or not to email?

Much existing business in the global swaps and over-the-counter (OTC) derivatives markets is transacted subject to the standard form 1992 ISDA Master Agreement and, despite the availability of a more recent edition of the ISDA Master Agreement (the 2002 version), it is not uncommon for new counterparties to elect to use the 1992 version, even now, more than two decades on.

The problem, it turns out, is that the 1992 version appears to have pre-dated the dawn of the email era.

Mrs Justice Andrews, sitting in the Chancery Division of the English High Court, has had the opportunity in Greenclose Ltd v National Westminster Bank plc to consider emails as a method of communication in the context of the notice provisions of an English law 1992 ISDA Master Agreement. In the case, a term in the trade confirmation for an interest rate collar transaction allowed the bank to roll the trade if it gave notice to its counterparty by a certain time on a certain date. The transaction was governed by an English law 1992 ISDA Master Agreement. The bank did indeed seek to exercise its option to extend the collar and, after its attempt to fax the notice failed, it sent an email for that purpose. The court considered whether the notice was valid and effective…

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