Www outbank de3/28/2023 ![]() ![]() Similar to the Wager Issue, the LIBOR issue has also become a well-trodden argument in connection with hedging contract claims. The argument is along the line that the Bank makes an implied representation that the LIBOR benchmark properly reflects the rate at which a contributing bank can raise cash in the market in accordance with the definition of LIBOR and the BBA's express guidance, and that it would not seek to manipulate the LIBOR benchmark, but that it has done so and had the claimant known this, it would not have entered into the hedging contract that used LIBOR as the reference rate, or alternatively would have used a different reference rate. As such, they are subject to implied terms that the chances are equal, and that the parties possess equal ignorance and/or equal knowledge about the odds. NatWest had greater knowledge of the arrangement that WW and more favourable chances. What troubled the Judge in this case was that these were the same arguments that WW's barrister had deployed at least twice in previous cases, and which had been rejected even to the extent of three failed applications for permission to appeal. In those previous cases, the Court had found consistently that claimants had no real prospect of establishing its wager claim, because the swap contract was made for a commercial purpose of hedging the risk of interest rates increasing over the term of the loan and was, thus, not a wager. In rejecting the argument again, the Judge commented that, "I regard this yet further attempt to raise substantially the same arguments as on previous occasions.as pointless, expensive and wasteful litigation to the detriment of the courts time and resources and the needs of other litigants." The LIBOR Issue WW's argument was that the hedging contracts were contracts for differences which are all wagers at common law. The Court had little difficulty in finding that none of the claims advanced by WW had any real prospect of success. The Court's findings in relation to the Wager Issue and the LIBOR issues are, however, worth dwelling on, although not for any reason which will be helpful to claimants.
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