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October 4, 2022

Clifford Chance Badea wins case for BRD Société Générale at The Court of International Commercial Arbitration. The case represents a novel precedent regarding derivatives transactions

The litigation practice of Clifford Chance Badea has secured a favourable decision for BRD Société Générale in relation to a claim concerning interest rate swaps (IRS) raised by Metexcom SRL at the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania.

The dispute, registered in arbitration on July 2016, resulted from a derivatives contract, the legal case being built around an interest rate swap transaction (IRS).

The plaintiff was dissatisfied that after the closing of the interest rate swaps transaction, the 3-month EURIBOR had a downward trend. The arbitration case consisted of judiciary defences regarding legal case of derivatives contracts, randomness of interest rate swap transactions, vices of consent such as the legal error and unfair exploitation, the purported non-routine clauses inserted in the standard derivatives contract, all such aspects being thoroughly documented and sustained by the team instructed on this case.

The team of lawyers included Daniel Badea, managing partner, Simona Neagu (photo) – lead counsel and head of the Litigation practice of Clifford Chance Badea, Sabina Crangasu, associate, and lawyer Sorin Toma. Moreover, considering the complexity of the case and the particularities of the targeted industry, the team benefited from the active support of the Banking & Finance-specialized lawyers within the firm.

“The Court’s solution is a special one given the innovative nature of the legal reasoning submitted before the Arbitration Court,” counsel Simona Neagu said. “The subject-matter of the arbitration was a novelty for the Romanian market and it created, as such, a judicial practice around highly specific contracts that are very common in financial markets. It’s worth mentioning that we will see an increase in such legal conflicts around specific transactions, over the next years: statistics published by the Bank for International Settlements show that the notional amount of outstanding interest rate derivatives contracts totalled $384 trillion, which represented 78% of the global negotiated derivatives market (at the end of December 2015). At $289 trillion, swaps accounted for by far the largest share of this market segment.”

The Litigation practice of Clifford Chance Badea consists of 8 senior lawyers working alongside their colleagues from the other practices. The team is also fully integrated into the global litigation and arbitration network of Clifford Chance, being involved in global and complex commercial litigation, restructuring and insolvency, international arbitration, white collar crime and crisis management cases, as well as competition law investigations


About Clifford Chance Badea

Clifford Chance has been present in Romania since 2006 and operates now as Clifford Chance Badea. The Bucharest office is fully integrated in the global network and is frequently involved in complex transactions such as syndicated loans, project finance, restructurings, Eurobonds and shares issues on international capital markets, derivatives, companies’ acquisitions by strategic investors or private equity funds, infrastructure and motorway projects, real estate investments etc., as well as domestic and international litigation and arbitration.

In the most recent editions of Legal500, Chambers Global and IFLR1000, Clifford Chance Badea ranks first (Tier 1) among law firms in Romania under the section of Banking & Finance and Capital Markets. It also has a strong Corporate and M&A practice (Tier 2 in Legal 500 and Chambers Global) and Litigation & Dispute Resolution (Tier 2 in Chambers Global).

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