The litigation practice of Clifford Chance Badea has secured a favorable decision for BRD Societe Generale in relation to a claim raised by Metexcom SRL at the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania.
The dispute, registered in arbitration on July 2016, resulted from a derivatives contract, the legal case being built around an interest rate swap transaction.
According to Clifford Chance Badea, Metexcom was dissatisfied, that after the closing of the interest rate swaps transaction, the 3-month EURIBOR had a downward trend. The arbitration case consisted of arguments about the nature of derivatives contracts, according to the firm, as well as "the randomness of interest rate swap transactions, vices of consent such as the legal error and unfair exploitation, the purported non-routine clauses inserted in the standard derivatives contract, all such aspects being thoroughly documented and sustained by the team instructed on this case."
"The Court's solution is a special one given the innovative nature of the legal reasoning submitted before the Arbitration Court,” Clifford Chance Counsel Simona Neagu said. "The subject matter of the arbitration was [new] for the Romanian market and it created, as such, a judicial practice around highly specific contracts that are very common in financial markets. It's worth mentioning that we will see an increase in such legal conflicts around specific transactions over the next years: statistics published by the Bank for International Settlements show that the notional amount of outstanding interest rate derivatives contracts totaled USD 384 trillion, which represented 78% of the global negotiated derivatives market (at the end of December 2015). At USD 289 trillion, swaps accounted for by far the largest share of this market segment."
The Clifford Chance Badea team included Managing Partner Daniel Badea, Lead Counsel Simona Neagu, Associate Sabina Crangasu, and Lawyer Sorin Toma, among others.