David Wolfson QC and Tom Smith (instructed by S J Berwin ) for the defendant; Richard Handyside QC and Tamara Oppenheimer (instructed by Collyer Bristow ) for the claimant.
The claimant, Tael One Partners Ltd (acting in its capacity as general partner of the Asian Entrepreneur Legacy One LP), agreed to participate, with other lenders, in the advance of a $100m syndicated loan. The agreement provided, inter alia, that in accordance with the Standard Terms and Conditions for Par Trade Transactions of the Loan Market Association (“the LMA Terms”) the amount payable by the defendant, Morgan Stanley & Co International plc, was agreed to be as set out in the schedule. If there was a payment premium due on repayment of the loan, a question might arise whether the buyer should account to the seller for any part of that payment premium which could be said to be attributable to the period before completion of the sale of the loan. The judge held that on a true construction of the terms and conditions of the LMA terms the seller could recover an appropriate part of the payment premium but, recognising that the LMA terms were widely used in the lending industry, he gave permission to appeal.
The appeal would be allowed. The judge’s construction of the applicable terms was not right, and the payment premium was not recoverable. The seller could not obtain a better or more extensive price than that set out in the schedule attached to the purchase letter; and if the parties had intended the seller to recover any part of the payment premium from the buyer one would have expected that to be mentioned in the purchase price letter as part of the purchase price.
Decision of Popplewell J, sitting in the Queen’s Bench Division on 9 July 2012 ([2012] EWHC 1858 (Comm)), reversed.