RBS facing Libor-rigging claim from Property Alliance Group
Manchester-based developer Property Alliance Group is to bring a multi-million pound claim against the Royal Bank of Scotland over Libor-rigging.
Details of what Birss J described as an “important case” emerged during a case management conference today, in which the parties and the judge were working towards a proposed trial window beginning in April 2016.
PAG is bringing the claim, which The Times has reported to be worth £30m, alleging breach of its customer agreement with RBS, which it says ran from 2002 until this summer. It says it enjoyed a good and close working relationship with the bank, until it discovered the alleged breaches at the centre of its claim.
Manchester-based developer Property Alliance Group is to bring a multi-million pound claim against the Royal Bank of Scotland over Libor-rigging.
Details of what Birss J described as an “important case” emerged during a case management conference today, in which the parties and the judge were working towards a proposed trial window beginning in April 2016.
PAG is bringing the claim, which The Times has reported to be worth £30m, alleging breach of its customer agreement with RBS, which it says ran from 2002 until this summer. It says it enjoyed a good and close working relationship with the bank, until it discovered the alleged breaches at the centre of its claim.
In written arguments before Birss J, PAG says that RBS recommended and sold four Libor-based interest rate-derivative products, in sums of between £60m and £75m, between 2004 and 2008 as “hedging” or “protection” against PAG’s interest rate risk in respect of investment loan facilities.
It claims that in no sense were the products sold by RBS genuine hedging, but instead were inherently “win/win” transactions for the bank, and “lose/lose” transactions for PAG. It alleges that they were intended to generate substantial additional revenue for RBS, and led to it beginning to “haemorrhage” money in meeting payments due under them.
It says that the swaps had a “toxic effect” and that, among its losses, it incurred breakage costs of £8m in terminating them.
PAG is bringing misrepresentation claims in respect of the swaps; alleging breach of contract in respect of its forced transfer to RBS’s restructuring division, GRG; and also alleging that RBS was engaged in the manipulation and fixing of Libor benchmark rates, giving rise to claims for rescission of the swaps.
RBS is defending the claim.
Property Alliance Group Ltd v The Royal Bank of Scotland Chancery (Birss J) 24 November 2014
