Mirador International LLC v MF Global UK Ltd

Under an introducing broker agreement, entitlement to continuing commission depends on the agreement read objectively and in its commercial context. An account introduced before the agreement was signed may nevertheless fall within a clause covering accounts already introduced where the parties objectively intended the agreement to govern a wider business transition. The court must respect corporate identity but should avoid a commercially absurd distinction unsupported by the contract. Pre-contractual negotiations and subsequent conduct remain inadmissible as aids to construction, although the relevant background and commercial purpose may be considered.

Mirador claimed an account of commissions allegedly payable under an Introducing Broker Agreement with MF Global. The agreement provided for continuing payments on accounts already introduced and for inspection of MF Global’s books after termination. MF Global accepted that Dante Lido had been introduced by the claimant’s business team, but argued that the introduction pre-dated the agreement, that the claimant was not then involved, and that the agreement did not cover the relevant transactions.

The central issues were the meaning of “accounts already introduced to Man”, the relevance of the date of the agreement, and whether the agreement extended to the Dante Lido account.

1. Construction. The meaning of the agreement was determined by what a reasonable person with the relevant background knowledge would have understood the parties to mean. The court applied the principles stated in Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 and ICS Ltd v West Bromwich Building Society [1998] 1 WLR 896.
2. Pre-contractual negotiations and subsequent conduct were inadmissible as aids to construction. The employment offer made to Mr Hachem was therefore disregarded, despite its similarity to the commission provisions in the later agreement.
3. The relevant background was that the parties were implementing the transfer of Mr Hachem’s team and client business from another broker to MF Global through related employment and introducing broker arrangements. In that context, “accounts already introduced to Man” included accounts introduced by the team in the expectation that they would become customers of Mirador.
4. The court respected Mirador’s separate corporate identity but held that the parties could not objectively have intended to distinguish between clients introduced immediately before and immediately after the agreement. Mirador’s construction avoided an absurd commercial result and was the correct interpretation.
5. MF Global’s arguments concerning double payment and windfall did not alter the construction. Judgment was entered for Mirador, with an account to determine the sums due.