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St Philips Commercial

St Philips Commercial

Philpott and another (as joint liquidators of WGL Realisations 2010 Ltd) v Lycee Francais Charles de Gaulle School [2015] EWHC 1065 (Ch), [2015] All ER (D) 175 (Apr)

A company in voluntary creditors' liquidation was engaged in a construction dispute with a school. The school put in a proof of debt, which the company's liquidators had yet to approve. The school contended that an arbitration clause in the construction contract was binding and continued to apply despite the company being in liquidation. The liquidators of the company applied for directions, contending that the court had power, under the Insolvency Rules 1986, SI 1986/1925, r 4.90 in connection with the proof of debt process, to give directions as to the taking of an account of the balance due between the company and the school. The Chancery Division ruled, among other things, that the arbitration clause trumped the taking of an account under the court's directions as envisaged by the Insolvency Rules. The arbitration agreement had not become inoperative following liquidation of the company.

The full article can be found here.

Sean Kelly recently published the below updated article regarding 'Interest Rate Swaps'. The full article can be found here.

1. The Products

1.1 Interest-rate swap agreements (“IRSAs”) include
1) caps,
2) collars,
3) structured collars; and4) base rate swaps.
all of which are freestanding agreements.

1.2 The post November 2007 version of the FCA’s Conduct of Business Rules (“COBS”) applies to a “designated investment” sold by a bank to a retail customer. The term “designated investment” is defined by Article 85 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (“Article 85") to be:

“(a) a contract for differences or
(b) Any other contract the purpose or pretended purpose of which is to
secure a profit or avoid a loss by reference to fluctuations in-
(i) the value or price of property or any description; or
(ii) an index or other factor designated for that purpose in the

In determining the “purpose or pretended purpose” of the contract, the Court will consider the purpose of the customer and not the bank (see the decision of Leggatt J in R (on the application of London Capital Group v The Financial Ombudsman Service Ltd [2013] EWHC 2425 (Admin).

1.3 All IRSAs are considered by the FCA to be “designated investments” and accordingly regulated under COBS. The division of IRSAs into these broad types follows the analysis of the FCA. Not all products within a category have the same profile. In practice, the name given by the bank to the product may provide little insight into its type.

1.4 Each of these freestanding products is designed to sit alongside a standard variable rate loan facility. In theory, the bank providing the IRSA need not be the same as the bank providing the loan facility. As the IRSA is intended to provide “protection” against interest rate rises affecting a loan, its amount and term ought to be tied to the amount and term of the loan. In practice, IRSAs may be for larger amounts than the loan and for longer periods. This is usually referred to as “over hedging”.

1.5 In addition to IRSAs, there are a number of products which have the same effect as the combination of an IRSA with a variable rate loan. These are generally referred to as “embedded swaps”. The most obvious embedded swap is a fixed rate loan which is effectively the combination of a base rate swap with a variable rate loan. Some embedded swaps (particularly those provided by Clydesdale Bank PLC) are far more complicated than this and involve the combination of a structured collar with a variable rate loan. Theterm “hedging product” includes both IRSAs and embedded swaps. Clydesdale Bank PLC has its own separate review procedure (“the Clydesdale Review”) which largely mirrors the FCA Review.

1.6. Whether embedded swaps are designated investments (and therefore regulated by COBS) is not yet decided. The stated view of the FCA is that fixed rate loans are not designated investments. This forms the basis for their exclusion from both the FCA Review and the Clydesdale Review. This appears to be correct because a fixed rate loan does not make use of any index. Any argument that fixed rate loans are designated investments has to be based on construing Article 85 so as to accord with EU law, the relevant directive being the Markets in Financial Instruments Directive 2004/39/EC (“MiFID”). The position of the FCA in relation to other embedded swaps is not clear. All embedded swaps other than fixed rate loans sold by Clydesdale Bank are within the Clydesdale Review. The position adopted by the Financial Ombudsman Service (“the Ombudsman”) is that fixed rate loans are not designated investments, but that COBS has to be considered when addressing the issue of whether the bank acted fairly in relation to the sale of the same.

1.6 Usually but not invariably, the bank which provides the hedging product will enter into an agreement (“the mirror agreement”) with a third party which will mirror the same. The bank providing the hedging product to its customer will receive a commission under the mirror agreement. From its perspective, the commission is its profit and the hedging product leaves its balance sheet. The existence of the mirror agreement is important because termination of the hedging product will usually require the bank to terminate the mirror agreement at a cost to itself which is passed on to the customer.

1.7 The charge to be paid by the customer to terminate the hedging product (“the break cost”) is tied to projected interest rates at the date of termination. These projected interest rates are an industry standard and are usually shown on a “yield curve” diagram. The break cost is the market value of the hedging product at the date of termination and usually referred to as the “mark to market” value.

The full article can be found here.

Wednesday, 18 March 2015 00:00

Emma Kelly to be Appointed a District Judge

St Philips Chambers is delighted to announce that The Queen has appointed Emma Kelly to be a District Judge on the advice of the Lord Chancellor, the Right Honourable Chris Grayling MP.

Property specialist Emma has enjoyed a highly successful career at the Birmingham Bar and will be missed by Chambers and clients alike. She was called to the Bar in 1997 and had been appointed as a Deputy District Judge in 2010. She will be formally sworn-in on Monday 23rd March 2015, following which she will begin the next phase of her career as District Judge Emma Kelly, based at Birmingham Civil and Family Justice Centre.

Joe Wilson said: “I would like to congratulate Emma on her appointment although she will be a loss to chambers and our commercial group in particular”.  All members, clerks and staff wish her every success and best wishes for the future.


St Philips Chambers is delighted to announce Stephen Eyre QC’s appointment to the Circuit Bench.

Commercial & Chancery specialist Stephen has enjoyed a distinguished career at the Birmingham Bar and will be missed by Chambers and clients alike. He will be formally sworn-in before the Lord Chief Justice at The Royal Courts of Justice on Monday 16th March 2015, after which he becomes His Honour Judge Stephen Eyre QC and begins the next phase of his legal career.

Chief Clerk, Joe Wilson said: “I would like to congratulate Stephen on his richly deserved appointment. He has been an active and supportive member of St Philips and will be sorely missed”.

All members, clerks and staff wish him every success and best wishes for the future.

St Philips Commercial members have taken three of the five places on the shortlist for Barrister of the Year at The Birmingham Law Society’s Legal Awards 2015 announced today.

Tariq Sadiq, Anthony Verduyn & Matthew Weaver have all received nominations for the award, highlighting both the quality of our members and the strength of our team.  The award will be announced at the annual awards ceremony held at The ICC in Birmingham on Thursday 19th March 2015, and with St Philips members having walked away with the prize for the last three years, we hope that one of our nominees can make it four years in a row.

A full list of all of this years nominees can be found here.

St Philips is delighted to announce Stephen Eyre’s appointment to the rank of Queens Counsel in the 2015 list published today.

Commercial & Chancery specialist Stephen has long been acknowledged as a leading advocate in his field, as well as being a favourite with clients and the legal directories. "He is very precise and thorough and has a very good commercial approach." CHAMBERS UK 2015

Head of Chambers Avtar Khangure QC commented: “I would like to congratulate Stephen on his appointment and look forward to welcoming him on to the front bench as a fellow Queens Counsel”.

Stephen will be formerly appointed on Monday 16th February at the traditional Silk Ceremony at Westminster Hall.

All members, clerks and staff wish him every success and best wishes for the future.

St Philips is delighted to announce that we have won the coveted title of 'Regional Set of the Year' at the 2014 Chambers Bar Awards. The award was collected by Head of Chambers, Avtar Khangure QC, in front of 600 distinguished guests at a ceremony in London on Thursday 2nd October 2014.

Chief Clerk Joe Wilson said: "This award is recognition for everyone in chambers for their hard work over the last 12 months which has seen our expansion into London and Leeds. It is particularly rewarding as it comes directly from feedback obtained from our clients. We always strive to provide the best possible levels of service and it is great to be recognised for that."

The Chambers UK Bar Awards are the only awards to exclusively highlight the excellence of members of the UK Bar and saw us fend off strong competition from Byrom Street Chambers, Deans Court Chambers, Guildhall Chambers and No5 Chambers to win the award.

Monday, 15 September 2014 00:00

St Philips Leeds is now recruiting

We are looking for established Chancery, Commercial, Construction, Insolvency and Employment Barristers to join our rapidly expanding team.

Based in a recently renovated prestigious Grade II Georgian building in the prime location of Park Square, St Philips (incorporating Chancery House Chambers) is a busy and successful chambers with ultra-modern offices, arbitration and mediation suites and first class specialist clerking and support services.

With offices also in Birmingham and London, St Philips gives clients easy access to its first class barristers nationally and internationally. So if you are tired of the long daily commute and want to enhance your working environment, the quality of your life and your practice, get in touch now.

The vacancy can be found here.

Avtar Khangure QC is the new head of St Philips Chambers. Avtar, a commercial and insolvency specialist, took over from Kevin Hegarty QC at the end of his tenure.

Avtar said: “I am delighted to have been elected to the post of Head of Chambers and wish to publicly thank Kevin Hegarty QC for his hard work over the past 3 years. He and the board never stood still and did a tremendous amount of work to secure the future of St Philips and its members; most notably the opening of our 2 new premises in London and Leeds giving members more access to work over a wider geographical spread. I am looking forward to overseeing the new look St Philips in what are undoubtedly exciting but challenging times for chambers and the Bar generally”.

We are delighted to announce that St Philips Chambers has been shortlisted for ‘Regional set of Year’ at the 2014 Chambers Bar Awards. The nomination comes as a direct result of market feedback compiled for the next edition of Chambers UK.

Chief Clerk Joe Wilson said: “We are very pleased to be shortlisted for this award. It is great recognition for chambers which has seen our recent expansion into London and Leeds. The nomination is particularly rewarding as it comes off the back of feedback direct from our clients. We always strive to provide the best possible levels of service and it is great to be recognised for that. Chambers is now in the running for two awards – our family group has been shortlisted for ‘Family Chambers of the Year’ at this year’s Family Law Awards.”

The 2014 Chambers Bar Awards are being held at the London Hilton Park Lane on Thursday, 2nd October 2014.