65 Million Reasons Never To Suffer In Silence

Kaupthing Singer & Friedlander LTD (in administration) v. UBS AG [2014] EWHC 2450 (Comm)

The Commercial Court (Andrew Smith J) has recently handed down judgment on an intriguing battle between UBS and Kaupthing Singer & Friedlander Ltd (in administration) (KSF) (the English subsidiary of the failed Icelandic bank Kaupthing hf (Khf)), in relation to the fate of US$ 65 million mistakenly paid by UBS to Khf in the first days of the financial crisis.

The judgment contains a number of instructive points both for banks and for their lawyers, but its practical assistance for the former must be in illustrating how an estoppel can arise where payments are misdirected, and by implication, how to avoid that happening. Along the way, the judgment also contains interesting conclusions on the meaning of "payment" in the ISDA Master Agreement.