Supreme Court

Tael’s appeal, which was heard in the Supreme Court on 17 November 2014, raised a question of contractual interpretation in respect of the Loan Market Association standard terms and conditions for par trade transactions (“LMA Terms“) [1].  As the current LMA standard terms and conditions for par or distressed trades adopt similar drafting, the decision has current relevance.

This case concerned a debt trade between Tael (as transferor) and Morgan Stanley (as transferee) on LMA Terms.  The traded loan facility included the payment of a “payment premium” (referable to a fixed IRR) which was payable when the loan came to be repaid or prepaid.  The issue was whether Morgan Stanley had to account to Tael for that part of the payment premium which related to the period before the date of the transfer. Continue reading »