BANCA GENERALI S.P.A v CFE (SUISSE) SA & ANOR

In granting an interim mandatory injunction, the court must select the course likely to cause the least irremediable prejudice or injustice. A high degree of assurance that the claimant will establish its right at trial is relevant, but it is not an exclusive requirement. Greater caution is required where the injunction would provide substantially all the relief claimed.

A contractual right to request information or documents for compliance with applicable law may extend to underlying transactional documents where they relate to the notes, the parties or their operations. The request must be made for the requesting party’s actual compliance purpose and must be objectively reasonable. Material changes in reported information and reasonably held doubts about its accuracy may make verification documents reasonably requested.

Banca Generali sought an interim mandatory injunction requiring CFE (Suisse) SA and Sovereign Credit Opportunities SA to provide transactional documents relating to receivables held in three securitisation structures. The Bank acted for or on behalf of senior noteholders and said that it needed the documents to value the notes and comply with regulatory reporting obligations.

The claim was maintained under clause 12 of the relevant contractual agreements. The defendants disputed the scope and reasonableness of the requests, relied on burden and confidentiality concerns, and argued that the information already supplied was sufficient. The central issues were whether the documents fell within clause 12, whether the requests were made for compliance with applicable law and were reasonable, and whether interim mandatory relief should be granted.

1. Relief granted. The Bank was entitled to an interim mandatory injunction requiring the defendants to provide the documents in accordance with the agreed timetable, subject to restrictions on collateral use and the agreed confidentiality arrangements.
2. Mandatory injunction principles. The American Cyanamid test remained the starting point. Because the application was mandatory and would provide substantially all the relief sought, the court had to consider the greater risk of injustice caused by a positive order. A high degree of assurance of success at trial was relevant, but the ultimate question was which course was likely to cause the least irremediable prejudice. The application had to be approached with caution because it was a clear-case remedy.
3. Construction of clause 12. Applying the principles of contractual construction in Lukoil Asia Pacific Pte v Ocean Tankers (Pte) Ltd, the phrase “relating to the Notes” was capable of including information and documents concerning the underlying receivables. The contractual wording also extended to information relating to the defendants and their operations. Article 7 of the Securitisation Regulation specified minimum disclosure requirements and did not prevent the parties from agreeing wider contractual obligations.
4. Applicable law and reasonableness. Clause 12 required consideration of the Bank’s actual purpose in making the request, rather than an objective test of strict necessity. The reasonableness qualification supplied an important, wholly objective control. The Bank’s regulatory duties concerning fair or estimated value, read with the client-protection principles in MiFID II, made valuation information material. Although there was no general regulatory duty to verify information or automatic right to underlying documents, those matters did not determine the contractual question.
5. Application. The material changes in descriptions of receivables and security, failures or expected failures to redeem notes, arrears and continuing corrections gave the Bank reasonable grounds for concern. Requiring transactional documents such as loan agreements, guarantees and security documents was proportionate to those concerns. Damages were inadequate for the Bank, adequate for the defendants, and the balance of justice favoured the injunction. The order included a penal notice and restricted use of documents supplied under the order, while preserving information held independently.