Lawyers at Dentons, acting for the Royal Bank of Scotland (RBS), have successfully moved the £29m Property Alliance Group (PAG) Libor dispute into London’s newly-created financial court.
In proceedings brought in September 2013, PAG alleges RBS induced it to enter four interest swap rate agreements between 2004 and 2008 that employed sterling Libor as a reference rate and ‘implicitly misrepresented that it was not rigging the relevant Libor rate’. A trial date has been set for May this year, and there have been a number of preliminary decisions by Justice Birss on matters such as disclosure.
However RBS requested the case be transferred into the financial court, and a hearing was held on the issue on 27 January, while PAG, represented by Cooke, Young & Keidan, opposed the application, and complained that the request was made out of time.
However Sir Terence Etherton, chancellor of the High Court, decided despite the fact a new judge would be needed, the case should be transferred.
The judge said that even though the value of the claim was less than £50m, which is the size of claim the court had been established to hear, the proceedings fell within the definition of ‘financial list claim’ as required by the Civil Procedure Rules.
The judgment said: ‘Allied to those considerations is the point that if, particularly in relation to the libor allegations, this case is to be viewed in a general sense as a test or lead case, which will be followed by others suitable for and likely to be commenced in or transferred into the financial list, it is desirable that it be dealt with by a judge of the financial list in order that the judgment following trial carries appropriate weight and respect in the financial markets.’
The judge added that it was well known there are others who have claims and are likely to litigate similar issues arising out of the alleged rigging of Libor rates.
He added: ‘It seems reasonably clear that the judgment following trial in the present proceedings will have an impact on other cases already launched and those which will be launched in the future. It is also likely that decisions about provisions in the agreements between RBS and PAG limiting RBS’s exposure to claims for negligence will have relevance elsewhere in the markets.’
Cooke, Young & Keidan instructed Brick Court Chambers barrister Tim Lord QC while Dentons instructed David Foxton QC of Essex Court Chambers for RBS.
The financial list debuted late last year, and its first decision, a dispute between Blackstone fund GSO Credit, Barclays Bank and HCC International Insurance Company was released in January. Last month the high-profile £3bn bond dispute between Russia and Ukraine was also filed at the specialist court.
Read the full decision here.