Allen & Overy. Memorandum to ISDA Members – Peregrine Fixed Income Limited v Robinson Department Store Public Company Limited.

May 24, 2000.

Mr Justice Moore-Bick at the High Court in London gave judgment in the above case on 18th May, 2000 in favour of Peregrine. The Judge’s decisions on the issues before him, and his reasoning for those decisions, raise potentially serious issues in relation to the valuation and close out mechanics of the 1992 ISDA Master Agreement (the “Agreement”). This case was presented to the Court by Peregrine as being “in the nature of a test case” regarding “fundamental provisions” of the Agreement. Peregrine has now presented the judgment as “the test case in respect of the ISDA valuation issue”, although it seems unlikely that other potentially affected counterparties and ISDA users would have accepted that the highly unusual. facts of this particular case were an appropriate basis for a decision on the interpretation of the Agreement generally. Whatever label is put on it, this case only determines the position (subject to any possible appeal) between the two actual parties to the case, Peregrine and Robinson. It should be noted that ISDA itself was not a party to the case, was never invited to express its views or to make representations to the Court on these issues and did not do so.

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