PAG defeated in £30m High Court suit over interest rate swap
MANCHESTER-based Property Alliance Group has lost its £30m case against the Royal Bank of Scotland over claims it caused the real estate company losses from interest rates swaps mis-selling and Libor manipulation.
PAG was taking legal action against the bank, alleging it had been mis-sold four interest rate swap products and that it had been wrongly been moved into the Global Restructuring Group.
The company said it would now “assess the basis for an appeal”.
PAG also believed key lenders at RBS knew Libor – on which interest rate swap products were pinned – was being fixed.
The judgement handed down yesterday (Wednesday December 21) by Justice Aspin dismissed PAG’s claim on all of the grounds.
“We are pleased that the court has ruled in our favour in this case,” said an RBS spokesperson. “We believe the judgment provides helpful clarification of the law on issues relating to Libor, the sale of interest rate swaps and the treatment of customers in the bank’s GRG division.”
A spokesperson at Property Alliance Group said: “We are of course disappointed with the outcome of the trial, we have always had complete confidence in our case, which grew as it progressed, and we will be considering today’s judgement in detail with our legal team to assess the basis for an appeal.”
PAG currently developing Axis Tower alongside regeneration specialist U+I, which was confirmed yesterday on the £850m Mayfield project in Manchester.
RBS, which is still 73% owned by the state, has found itself in legal trouble several times in recent years.
It will return to the courtroom again next spring, facing a £1bn claim from more than 27,000 shareholders who believe the bank mislead them ahead of a £12bn fundraising round in 2008.
The bank is also facing the possibility of a huge fine from the US Department of Justice for mis-selling mortage-backed securities, with some estimates pegging the penalty at $12bn (£9.7bn).
