Damage in economic loss claims: The English Court provides welcome clarification on accepting jurisdiction | Dechert LLP
The English High Court has decided1 that, in determining whether it has jurisdiction to hear claims about economic loss, the focus must be on where the loss manifested itself (i.e. its crystallisation) rather than on the transaction that led to the loss.
The Facts
In 2013, the first claimant decided to invest US$3bn in Haitong, a listed Chinese financial institution. The investment was structured in a complex manner, with part of the investment price being funded by UBS London. As security for the loan, UBS London held the claimant’s shares in Haitong in an account in London which was governed by English law and jurisdiction. Following a dramatic drop in the share price of Haitong, UBS London was entitled to and did demand a mandatory prepayment of the loan. When no prepayment was made, UBS London exercised its security by selling the shares.
The claimants made a claim for negligent misstatement, namely that UBS made false…
