Goldman Sachs International v Videocon Global Ltd & Anor

Under clause 6(d) of the ISDA Master Agreement, a notice becomes effective when it provides sufficient details of the calculation and the account to which payment is to be made. Failure to provide the notice on or as soon as reasonably practicable after the Early Termination Date makes the notice late, but does not prevent the amount from becoming payable once adequate details are supplied. The lateness is a breach of contract and may give rise to damages if loss is proved. The timing requirement governs both the making of calculations and the provision of the statement describing them.

Goldman Sachs sought summary judgment for US$4,066,542.90 under currency swaps governed by an ISDA Master Agreement, and under a guarantee. The swaps had been terminated after Videocon Global failed to meet margin calls.

On the first summary judgment application, Mr Knowles CBE QC held that the defendants were in principle liable, but that Goldman Sachs had failed to provide sufficient calculation details as required by clause 6(d). Goldman Sachs later supplied further details. The defendants argued that those details had been served too late and that the contractual conditions for payment had therefore not been satisfied. The court also considered whether the timing requirement applied to both calculation and notification, and whether the sum could alternatively be claimed as damages.

1. Summary judgment granted. The defendants had a real prospect of establishing at trial that the further notice, served more than two years after the Early Termination Date, was not provided on or as soon as reasonably practicable. The court considered it highly improbable that such a delay could satisfy that requirement.
2. Clause 6(d)(ii) provided that the amount would be payable when notice of the amount payable became effective. The purpose of the statement under clause 6(d)(i) was to give the paying party sufficient information to understand and check the calculation, and to identify the account into which payment was to be made. Once those matters had been adequately supplied, the notice was effective.
3. The fact that the notice was late did not make it ineffective. A construction under which any failure to give timely details meant that the amount could never become payable lacked commercial sense. The late notice constituted a breach of contract, which could support a claim for damages if the delay caused loss.
4. It was unnecessary to decide the remaining submissions. The court nevertheless considered that the timing phrase naturally governed both the obligation to make the calculations and the obligation to provide a statement showing them in reasonable detail.
5. The contractual debt was not to be equated with the common-law measure of damages. It was therefore inappropriate to determine on a summary judgment application whether the same sum could be recovered as damages.

The construction adopted was consistent with the policy of giving effect to, rather than invalidating, commercial agreements.

The judgment records an earlier summary judgment decision in the same litigation. Mr Knowles CBE QC held in [2013] EWHC 2843 (Comm) that the defendants were in principle liable, but refused summary judgment because the calculation details supplied under clause 6(d) were insufficient. This court granted summary judgment after further details were supplied.