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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Secure Capital SA v Credit Suisse AG  EWCA Civ 1486 (06 October 2017)
Cite as:  EWCA Civ 1486
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MR JUSTICE HAMBLEN
Case no. 2014-452
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTCIE DAVID RICHARDS
LORD JUSTICE IRWIN
| SECURE CAPITAL SA
|- and -
|CREDIT SUISSE AG
Adrian Beltram QC and Christopher Burdin (instructed by Allen & Overy LLP) for the Respondent
Hearing dates : 16 May 2017
Crown Copyright ©
LORD JUSTICE DAVID RICHARDS :
"Except as stated below, the Bank has taken all reasonable care to ensure that the information contained in this Pricing Supplement when taken together with the other Issue Documentation is true and accurate in all material respects and that, in the context of the issue of Notes, there are no other material facts the omission of which makes misleading any statement herein, whether of fact or opinion. The Bank accepts responsibility accordingly. The information relating to the life expectancies of the Reference Individuals has been provided by the Life Expectancy Provider and does not reflect the view of the Bank or its affiliates."
The Clearstream system
The 2001 Law
"the investor may exercise or arrange to exercise corporate rights attached to the securities and the rights attaching to the holding of the securities linked to the possession of the securities by producing a certificate drawn up by the relevant account holder attesting to the number of securities registered in its custody account".
Secure Capital's claim
"…at common law, the identification of the appropriate law may be viewed as involving a three-stage process: (1) characterisation of the relevant issue; (2) selection of the rule of conflict of laws which lays down a connecting factor for that issue; and (3) identification of the system of law which is tied by that connecting factor to that issue: see Macmillan Inc v Bishopsgate Investment Trust plc (No 3)  1 WLR 387, 391–392 per Staughton LJ. The process falls to be undertaken in a broad internationalist spirit in accordance with the principles of conflict of laws of the forum, here England.
While it is convenient to identify this three-stage process, it does not follow that courts, at the first stage, can or should ignore the effect at the second stage of characterising an issue in a particular way. The overall aim is to identify the most appropriate law to govern a particular issue. The classes or categories of issue which the law recognises at the first stage are man-made, not natural. They have no inherent value, beyond their purpose in assisting to select the most appropriate law. A mechanistic application, without regard to the consequences, would conflict with the purpose for which they were conceived. They may require redefinition or modification, or new categories may have to be recognised accompanied by new rules at stage 2, if this is necessary to achieve the overall aim of identifying the most appropriate law (cf also Dicey & Morris, The Conflict of Laws, 13th ed (2000), vol 1, p 34, para 2-005)….
The three-stage process identified by Staughton LJ cannot therefore be pursued by taking each step in turn and in isolation…
There is in effect an element of interplay or even circularity in the three-stage process identified by Staughton LJ. But the conflict of laws does not depend (like a game or even an election) upon the application of rigid rules, but upon a search for appropriate principles to meet particular situations."
"the question whether a 'bearer bond' is capable of carrying with it the right to claim payments of principal and interest from the issuer should ultimately be determined, not by the law of place where the bearer instrument was situated at the time of its negotiation, but by reference to the law governing those rights and the issuer's corresponding obligations…a choice of law expressed in the instrument itself should be determinative".
"…a person's (proprietary) entitlement to be treated as a "holder" as against other claimants, will normally be determined in accordance with the lex situs, but the question whether the instrument carries with it rights against the issuer (and questions concerning the exercise of those rights) will, ultimately, be matters for the law governing the instrument."
"I agree with Credit Suisse that there is no scope in this contractual analysis for the introduction of foreign law. The fact that a foreign law might or might not purport to grant a third party a right to sue on an English law contract is irrelevant. A foreign law cannot (even if it purported to do so) create new contractual obligations in an English law contract".
Secure Capital's written case
Secure Capital's oral case
"Each of the persons shown in the records of Euroclear, Clearstream, Luxembourg, DTC or any other clearing system as the holder of a Security represented by a Global Security must look solely to Euroclear, Clearstream, Luxembourg, DTC or such clearing system (as the case may be) for his share of each payment made by the Bank, acting through the Relevant Branch, to the bearer of such Global Security or the holder of the underlying Registered Securities as the case may be, and in relation to all other rights arising under the Global Securities, subject to and in accordance with the respective rules and procedures of Euroclear, Clearstream, Luxembourg, DTC or such clearing system (as the case may be). Such persons shall have no claim directly against the Bank or the relevant Branch in respect of payments due on the Securities for so long as the Securities are represented by such Global Security and such obligations of the Bank and the relevant Branch will be discharged by payment to the bearer of such Global security or the holder of the underlying Registered Securities, as the case may be, in respect of each amount so paid." (emphasis added)
LORD JUSTICE IRWIN:
LORD JUSTICE BEATSON: