Practical Law Quotes Hornshaw, Buddhdev and Kalro on High Court Ruling on Loan Agreements
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Akin Gump partner Richard Hornshaw, senior counsel Sheena Buddhdev and associate Srishti Kalro have been quoted in the Practical Law article “Lender not subject to broad good faith duty when exercising discretions under loan agreement (High Court).” Their comments were in response to a High Court ruling dismissing a borrower’s claims against a bank pertaining to actions taken by its restructuring group following events of default under a secured loan agreement.
Hornshaw, Buddhdev and Kalro observe that the decision represents a good outcome for the defendant, Royal Bank of Scotland (RBS), in that it “won on all points and the court did not consider that a breach of the bank’s internal policies and procedures could be used as evidence of a breach of the duty to exercise reasonable skill and care.”
The three then note that, in light of the ruling, “the law as to what constitutes illegitimate conduct in order to establish intimidation or duress may be further developed.” In addition, the judgment “leaves open the possibility that a loan agreement with different features… could be treated as a relational contract.”
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