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The High Court dismissed a claim by borrowers against a bank for breach of contract, where the bank altered the reference rate for calculating interest on a loan, giving rise to an alleged increase of €700,000 in interest payments by the borrowers. The court found that the bank's contractual terms allowed for such a change from the Euribor rate to the 'Bank's Cost of Funds' (BCOF), and that the bank had exercised its absolute discretion as permitted under the Standard Terms and Conditions of the loan agreement.
Loan finance agreement - Interest rate calculation - Euribor rate - Bank's Cost of Funds (BCOF) - Breach of contract claim - Contractual interpretation - Absolute discretion - Standard Terms and Conditions (STCs) - Market conventions - Market conditions - Prior notice - Commercial mortgage - Liquidity Costs / Reserve Asset Cost - Regulatory Authority - Objective appraisal of contract
Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.
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