24726.06 941.84 3.96%
DEUTSCHEBANK-LIBOR-UNITECH:Unitech tries to bring Libor into dispute with Deutsche Bank
By Estelle Shirbon
LONDON (Reuters) - Real estate developer Unitech wants to add allegations linked to the manipulation of Libor to an existing dispute with Deutsche Bank, in a move that could set a precedent for cases against other banks.
It has tried to amend its counter-claims against Deutsche's allegation in light of revelations about Libor rigging since the suit was launched in March 2012, legal documents show.
Unitech has sought to argue that the loan and swap agreements were invalid because they were tied to Libor when it was being manipulated, although so far the court has not allowed it to add that argument to its counter-claim.
Unitech initially argued it was an unsophisticated investor mis-sold complex financial products by the German bank.
Deutsche Bank is under investigation by German financial services watchdog BaFin over alleged Libor manipulation. It suspended two traders last year for Libor-related misconduct.
If successful, Unitech's attempt to use the scandal to bolster its position in the Deutsche lawsuit could be a worrying sign of things to come for other banks involved in rigging Libor.
Unitech's move comes after news that Guardian Care Homes, a residential care home operator in England, was suing Barclays for up to 37 million pounds in a claim that it was mis-sold interest rate hedging products based on Libor.
Unitech suffered a setback on Thursday when judge Jeremy Cooke dismissed its proposed amendments, but John Brisby, a lawyer for Unitech, told the court on Friday he intended to file revised amendments on the Libor issue that would address the points made by the judge.
"If the defendants had been told (as Deutsche Bank knew) that Libor was being rigged ... and that Deutsche Bank was one of the banks involved in this manipulation, they would not have entered into either of those agreements," lawyers for Unitech wrote in a skeleton argument prepared ahead of this week's hearings and seen by Reuters.
Deutsche Bank rejects all Unitech's arguments in relation to Libor.
"This is a long-standing case of a loan that was made and never paid back," the bank said in a statement.
"The defendant's subsequent and unfounded allegations about Libor, one iteration of which has already been rejected by the court, are an attempt to divert attention from its unpaid debt.
"They do not change our view that the defendant's allegations of mis-selling are without merit, as are its claims that it was anything other than a sophisticated investor with considerable financial experience."
There will be a further pre-trial hearing at a later date to consider Unitech's revised amendments. The case is scheduled to come to trial in January 2014.
(Editing by Helen Massy-Beresford)
ADS BY GOOGLE
24726.06 941.84 3.96%
video of the day
See rupee at 60-61/ $ in short to medium term: ICICI Bank