The Commercial Court has handed down an important judgment in Marme v NatWest Markets & Ors, a long running fraud claim based on allegations of implied misrepresentations based on alleged EURIBOR manipulation, arising out of the European Commission cartel decision in relation to EURIBOR and the conviction of Barclays and Deutsche EURIBOR traders.

The successful defendants were represented by two Fountain Court counsel teams. NatWest was represented by Laura John and Max Evans (led by David Quest QC of 3VB) instructed by Simmons & Simmons, whilst the Second to Fifth defendants (HCOB, Bayerische Landesbank, ING and CaixaBank) were represented by Tim Howe QC and Adam Sher, instructed by Allen & Overy.

Following a substantial trial in autumn 2018, Mr Justice Picken comprehensively rejected all the claims (for rescission and damages) against the defendant banks. As only the second civil -IBOR manipulation case to go trial and the first following the decision of the Court of Appeal in PAG, the judgment addresses a number of important issues including:

  • The making of implied revpresentations: the judgment addresses what implied representations (if any) are made by a bank in connection with -IBOR rate setting merely by entering into a transaction, with Picken J rejecting all the implied representations pleaded by Marme.
  • Inducement/reliance: the judgment provides a clear and comprehensive statement of the law, including emphasising the need for a claimant to prove conscious awareness of the implied representations.
  • Fraud: the judgment addresses the law in relation to establishing fraud and in particular how those rules apply to cases of implied representations.
  • Implied contractual terms: Picken J considered what terms (if any) were to be implied into the relevant contracts concerning a bank’s involvement in -IBOR manipulation, rejecting all of the implied terms relied upon by Marme.
  • Agency: Picken J comprehensively rejected Marme’s claims that NatWest (which had been one of the joint mandated lead arrangers of the senior loan from which the proceedings arose) had been held out as the agent of the other syndicate banks (the Second to Fifth Defendants) in making the alleged EURIBOR representations.
  • Remedies: the judgment addresses questions of rescission and affirmation and the (non) availability of so-called “partial rescission”, as well as the necessary steps in pleading and proving damages.