Jurisdiction(s):
United Kingdom

R v Hayes and Palombo: England and Wales’ one-true-rate stance on Libor and Euribor, divergence from US and EU decisions, and the prospective Supreme Court test

Published on: 20 June 2024

Published by a Law360 reporter

Legal News

Article summary

To conclude, the court firmly held that both judges and the jury applied the law and evidence properly and fairly, confirming the convictions of the two named defendants (Ibid, (paras [151] et seq). The ruling is contentious and diverges from more recent international legal rulings concerning Libor. This piece examines the court’s reasoning in depth, the ways it jars with overseas judgments and learned commentary, the disputed one-true-rate theory, and the possible consequences for the reputation of the British justice system.

The judgment

In an extensive ruling, reliance was placed on Hayes’ admissions given during interviews about Libor manipulation. Regarding Palombo, the court pursued an intricate inquiry into whether Belgian contract law applies to the Euribor Code and, as a result, bears upon International Swap and Derivatives Association master agreements. Such agreements underpin international swap trading and are subject to the laws of England and Wales or, alternatively, those of the US. The UK Court of Appeal set aside the 2022 view of the US Court of Appeals for the Second Circuit in US v Connolly ( United States v Connolly (2022) United States Court of Appeals , Second Circuit United States of America , Appellee-Cross-Appellant, v Matthew CONNOLLY and...

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