Tael One Partners Ltd v Morgan Stanley and Co International Plc: SC 11 Mar 2015

This appeal raises a question of contractual interpretation. Its significance lies in the fact that the contractual condition in question forms part of the Loan Market Association standard terms and conditions for par trade transactions which are a recommended set of terms published by the LMA and commonly used in the secondary loan market. Tael had sought summary judgment in its claim against the defendant under a standard form contract relating to Premium Payments order, The Court of Appeal refused such judgment, and Teal now appealed.
Held: The appeal was rejected. The word ‘accrue’ describes the coming into being of a right or an obligation. The amount may not fall due until a future date, but an entitlement may nevertheless have accrued. Interest or fees might accrue, in that sense, by reference to the lapse of time, but this was not such a situation. An entitlement to a payment premium under the loan agreement accrues on a defined event. The payment premium is expressed as an amount equal to the difference between the total of several other amounts, on the one hand, and an amount equal to interest calculated at a given rate, on the other hand, so it might be said that part of the premium relates to the period before the settlement date. That does not however mean that the premium can be regarded, retrospectively, as having notionally accrued over that period. The method of calculation of the premium should not be confused with the accrual of the right to it.

Lord Neuberger, President, Lord Kerr, Lord Reed, Lord Toulson, Lord Hodge
[2015] UKSC 12, [2015] WLR(D) 122, [2015] BUS LR 278, UKSC 2013/0127
Bailii, Bailii Summary, WLRD, SC, SC Summary
England and Wales
Citing:
Appeal fromTael One Partners Ltd v Morgan Stanley and Co International Plc CA 1-May-2013
Morgan Stanley appealed against summary judgment given against it in respect of the application of the terms of a standard form assignment of a Loan agreement.
Held: The words ‘which are expressed to accrue by reference to the lapse of time’, . .
At first instanceTael One Partners Ltd v Morgan Stanley and Co International Plc ComC 9-Jul-2012
Each party sought summary judgment.
Held: Popplewell J granted Tael’s application and dismissed Morgan Stanley’s. The payment premium was similar to interest and performed an analogous function. The cost of the borrowing was more than the . .
CitedIn re Howell KBD 1895
The court considered whether, a tenant having become bankrupt during the currency of a quarter, that part of the quarter’s rent apportionable to the part of the quarter before the order of adjudication should be held to be rent ‘accrued due’, within . .
CitedAitken v South Hams District Council HL 8-Jul-1994
A notice was served in 1983 under section 58 of the Control of Pollution Act 1974 requiring the abatement of a noise nuisance. That section was repealed by the Environmental Protection Act 1990, with effect from 1st January 1991, and a new procedure . .
CitedIn re Lysaght CA 1898
The testator bequeathed certain shares and declared that they ‘shall carry the interest accruing thereon at my death.’
Held: But for this clause the Apportionment Act would have allowed the residuary legatees to take the benefit of the . .

Lists of cited by and citing cases may be incomplete.

Contract, Financial Services

Updated: 28 December 2021; Ref: scu.544223