LM-2024-000238 - [2025] EWHC 1441 (Comm)

Ashenden contends that it was clearly acting as “an agent or otherwise on behalf of or for the benefit of a Principal” for the purposes of clause 5.1 of the Terms of Business. It relies on several pieces of evidence in support of that contention; I summarise them as follows.

In response, Jefferies contends that the evidence relied on by Ashenden is consistent with alternative analyses: (i) that Ashenden made the Trade as agent for Hyposwiss; (ii) that Ashenden bought the Notes from Jefferies and sold the Notes to Hyposwiss on a back-to-back transaction, so that it was the principal to the Trade. Jefferies points to the correspondence between the parties, which it says shows that Ashenden’s stance was consistent only with the latter alternative until Mr Sigler made his second witness statement.

By email on 19 April 2023 Ashenden wrote to Jefferies as follows:

“We are facing a complicated situation with the buyer in default of payment for trades orders passed before the write-off of the AT1 bonds. Of course we are putting every effort in resolving this unprecedented situation, including sending formal notices to buyer and assessing all legal action to be taken. However we are not in a position to sign the Claim Sale and Purchase Agreement.

If it is of interest to you, we could examine the possibility to transfer any claim we have against the defaulting buyer to you, or any other form of collaboration in the context of legal action taken against the buyer.”

On 20 April 2023 Jefferies responded with some practical proposals, but it stated its basic position in the following terms:

“[W]e are sorry to hear you are having issues with your downstream buyer for trades done pre write down. …

While you may have a further trade with a counterparty on the other side, as you are aware, the trade between us was done on a principal basis and was in no way contingent on trade or settlement terms that may apply to any onward or other trade that you have entered into. The trade between you and us still stands and you remain responsible for settlement of your obligations irrespective of the write down.”

The parties instructed lawyers. On 4 July 2023 Swiss lawyers acting for Ashenden wrote to Linklaters, then acting for Jefferies; the letter included the following passages:

“I wish to stress in the first place the longstanding and successful relationship between your client and mine.

…

Ashenden Finance SA faces a default of payment on the part of the end buyer of the Notes, Hyposwiss Private Bank Genève SA. The latter claims that the seller failed to deliver the Notes on the settlement date of the Transaction on 20 March 2023 a failure to deliver which we - by the way - also had to face with you as a seller, and refuses to fulfil its payment obligations. …

Ashenden Finance SA has formally opposed to the position of Hyposwiss Private Bank Genève SA and has initiated debt collection proceedings against it in Geneva.

Any action taken against Ashenden Finance SA before the Geneva courts, its natural place of jurisdiction, will be joined to proceedings against Hyposwiss Private Bank Genève SA. Thus, the outcome of the legal action taken against the end buyer is crucial for both Ashenden Finance SA and Jefferies International Limited: the findings of the Geneva courts will commit all parties in the chain of transactions of the Notes.

While Ashenden Finance SA understands, and shares, the frustration of your client, obviously, both Jefferies International Limited and Ashenden Finance SA have common interests in this matter and the only viable route is to join forces against Hyposwiss Private Bank Genève SA.”

Linklaters’ reply on 18 July 2023 included the following text:

“Our client recognises the longstanding relationship it has with Ashenden Finance SA and appreciates the difficulty it is experiencing in respect of Hyposwiss Private Bank Genève SA’s failure to meet its payment obligations.

Nonetheless, Jefferies' contract with Ashenden remains independent of Ashenden's relationship with its counterparties. Your client remains liable to fulfil its payment obligations arising under the terms of the sale and purchase agreement made with our client on 16 March 2023. It is no answer to assert that a default of payment on the part of the end buyer of the Notes justifies delay by Ashenden in meeting its contractual obligations owed to Jefferies. …

Our client will not condition a resolution of this matter on its involvement in proceedings with a third party which are unrelated to its contractual rights.”

It did not appear from the evidence whether there was any response to that letter.

Mr Phipps and Mr Mukherjee were in agreement that I was not in a position to resolve the question whether Ashenden was, properly speaking, an agent of Hyposwiss. I agree. Therefore, in my judgment, there is a good arguable case that Ashenden did not make the Trade as an agent, because there is a plausible (albeit contested) evidential basis for that case: see paragraph 19 above.

Mr Mukherjee submitted, however, that this did not avail Jefferies. He said that, even if Ashenden was not acting as Hyposwiss’s agent, it was certainly acting “otherwise on behalf of or for the benefit of” Hyposwiss, which was therefore the Principal: see clause 5.1 of the Terms of Business. And this sufficed to bring into play the further provisions of clause 5, including clause 5.4. This raises issues concerning the proper construction of clause 5.