High Court allows Term SOFR-based rate as reasonable alternative to LIBOR

In its first decision on the consequences for financial instruments of LIBOR's cessation, the High Court has ruled that Standard Chartered may unilaterally apply a SOFR-based replacement rate in a case involving dividends on preference shares. This is a significant bellwether for challenges to the transition of financial instruments from LIBOR to alternative rates without investor consent, write Mike Logie and Philip Linton.

Mike Logie (michael.logie@ashurst.com) is a partner in Ashurst's derivatives and structured products practice, where he advises financial institutions on structured product offerings, including in relation to underlying reference assets and across various product wrappers. Philip Linton (philip.linton@ashurst.com) is a partner in Ashurst's dispute resolution practice. He previously worked 12 years at Goldman Sachs, where he was a managing director and led the firm's EMEA Litigation and Contentious Regulatory team. Republished from (www.ashurst.com) with permission.

On 15 October 2024, the English High Court handed down its judgment in Standard Chartered plc v Guaranty Nominees Ltd and others, finding in favour of Standard Chartered (SC). [1]