BCCI/Bank of America case reaches shock agreement

As the BCCI liquidator’s case against the Bank of England rumbles on, a surprise settlement has been reached in its parallel case, BCCI’s massive claim against Bank of America.

In terms of scale, amount of legal fees, and some allegations, the Bank of America case mirrors the case against the Bank of England.

The case was due to have launched this month and was expected to have lasted some 18 months. The Bank of England case is expected to last for a similar length of time, having started in January 2004.

Revelations of the settlement coincide with the first anniversary of the launch of the case against Bank of England, which is accused by BCCI liquidator Deloitte & Touche of “knowingly or recklessly” failing in its supervision of BCCI.

Lawyers gave a mixed response to the impact of the settlement on the Bank of England trial. However, one insider said: “There could be psychological impact [on the Bank of England case] for anyone who knows the terms of settlement.” A Deloitte source did not expect it to have any impact. Terms of the settlement are being kept confidential.

Bank of America was accused by the liquidator of knowingly participating in fraudulent trading being carried out by the collapsed Luxembourg-registered bank.

Lead counsel to Deloitte in the Bank of America case was Michael Crystal QC, alongside fellow 3-4 South Square silk Robin Dicker QC, and 3 Verulam Buildings big-hitter Ewan McQuater QC. Acting for Bank of America were 4 Stone Buildings’ John Brisby QC and Robert Miles QC – both powerful names at the chancery bar.

Michael Davison, the Lovells litigation partner handling BCCI’s claim, was unavailable for comment.

Bank of America’s lawyer, David Allen, a litigation partner at Mayer Brown Rowe & Maw, declined to comment.