An Indian property developer suing Deutsche Bank AG over an interest-rate swap agreement told a U.K. judge it wants to add accusations to the lawsuit that the lender manipulated the London interbank offered rate.
Unitech Ltd.’s $150 million loan and related swap contract is invalid because they were linked to Libor, which had been improperly fixed by banks including Deutsche Bank, according to the company’s filings for a London court hearing today.
Since the lawsuit began, “material has come to light which shows that Deutsche Bank AG has been involved in the manipulation of Libor,” Unitech said.
Germany’s largest bank sued the Indian company in March last year saying it owed $11 million under the swap and had missed payments. Unitech countersued in May claiming the swap wasn’t suitable or properly explained.
Deutsche Bank is one of more than a dozen banks being investigated by regulators worldwide for trying to fix the interest-rate benchmark for profit, or to appear financially sounder. While Germany’s largest bank hasn’t yet been censured by regulators, both it and the country’s financial regulator are under pressure to release results of an investigation into whether the lender improperly influenced the benchmark rate.
The court hasn’t given Unitech permission to amend its claim and lawyers for both sides agreed they needed more time to discuss amending the lawsuit. Another hearing is scheduled for February.
“We’ve not had an opportunity to take instruction,” Richard Handyside, a lawyer for the bank, said at the hearing. “It’s a matter which needs to be investigated.”
Deutsche Bank spokeswoman Kathryn Hanes had no immediate comment. Unitech’s lawyer Richard Gwynne didn’t immediately respond to an e-mail seeking comment.
It’s the second civil lawsuit in the U.K. linked to Libor manipulation. Barclays Plc was sued by affiliates of Guardian Care Homes Ltd. over another interest-rate swap linked to the benchmark. A trial is due to take place later this year.
Barclays Plc was fined 290 million pounds ($465.5 million) in June for manipulating Libor and related rates, while UBS AG, Switzerland’s largest bank, was fined $1.5 billion by U.S. and U.K. regulators for manipulating rates.
The case is: Deutsche Bank AG v. Unitech Limited, High Court of Justice, Queen’s Bench Division, 12-464