B, R. v

Where a foreign-law code governs a financial benchmark, the English court must determine the applicable foreign-law principles from expert evidence. The construction of the code then remains a question of law for the English court under the Belgian Civil Code and the lex fori.

A benchmark submission requiring an objective rate to the submitter’s best knowledge does not permit a panel bank to select a rate within an asserted permissible range to advance its own trading position. If the parties’ shared intention is clear from the code’s intrinsic terms, the judge may refuse extrinsic evidence. Reasoning in analogous benchmark cases may assist that intrinsic construction.

The appellant, a derivatives trader employed by a Euribor panel bank, faced an indictment for common law conspiracy to defraud. The Crown alleged that he and others dishonestly sought to influence Euribor submissions to benefit trading positions.

At a preparatory hearing in the Southwark Crown Court, the judge construed Article 6.1 of the Euribor Code under Belgian law. He held that panel banks could not consider trading advantage when submitting rates and declined to receive proposed extrinsic evidence. The appellant challenged that ruling on construction, admissibility, good faith, the relevance of Libor authorities, and the applicable standard for interpreting the Code.

1. Appeal dismissed. The court confirmed the preparatory ruling. There was no proper basis to disturb the judge’s factual findings on Belgian law after he had heard the expert evidence. An appellate court will ordinarily be slow to substitute its own assessment in those circumstances, consistently with Dexia Crediop S.P.A. v Comune di Prato [2017] EWCA Civ 428.

2. The judge was entitled to find that Belgian law did not require extrinsic evidence where the parties’ shared intention could be ascertained from the Code’s intrinsic terms. Once he properly found that the meaning was clear, he was entitled in his discretion to exclude the proposed evidence. The asserted private views of some alleged drafters could not readily establish the shared intention of all parties to the Code.

3. Article 6.1 required an independent and genuine assessment of the objectively determined rate at which one hypothetical prime bank would offer deposits to another. Read with the Code as a whole, its requirement that rates be submitted to the bank’s best knowledge excluded a submission skewed to advance the submitting bank’s trading position. The Article concerned a single accurate rate, not a range from which a bank could select a rate favourable to itself.

4. The court could legitimately use the underpinning reasoning in the Libor authorities as support for that intrinsic construction. A benchmark could not operate if submitting banks were free to adjust genuine assessments for their own trading advantage: see H [2015] EWCA Crim 46, Hayes [2015] EWCA Crim 1944, and Merchant & Mathew [2017] EWCA Crim 60.

5. Although Belgian law treats shared contractual intention as a factual issue for its own appellate purposes, English procedural law governs the English trial. Expert evidence establishes the relevant foreign-law principles, but construction of the foreign document is for the English court as a matter of law: Alhamrani v Alhamrani [2014] UKPC 37.

6. In an obiter case-management observation, the court warned that the admissibility of evidence on dishonesty required careful reconsideration before trial because the approach in R v Ghosh 75 Cr. App. R. 154 might have been overtaken or modified by Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67.

• Court of Appeal (Criminal Division) Dismissed the appeal and confirmed the preparatory ruling: [2018] EWCA Crim 73.

• Southwark Crown Court At a preparatory hearing, held that Article 6.1 of the Euribor Code prohibited panel banks from considering trading advantage when submitting rates, and declined to receive extrinsic evidence.