Germany:
German Federal Court Ruling Important For Future Contractual Netting Arrangements
20 June 2016
Reed Smith (Worldwide)
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In a decision of 9 June 2016, the German Federal Court of
Justice (Bundesgerichtshof, "BGH") has ruled that the
determination of the close-out amount in a netting provision based
on the German Master Agreement for Financial Derivatives
Transactions (Rahmenvertrag für Finanztermingeschäfte or
DRV) is not legally effective in the event of insolvency to the
extent that it deviates from section 104 of the German Insolvency
Code.
The reasoning of the decision has now been published and
provides a number of answers to questions which are important for
future contractual netting arrangements.
To read more about the decision, please click here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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