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Second order,

Financial law distinction exam model answer required for the following question, OSCOLA referencing:

Novosibera Mining and Exploration (NME), is a global corporation set up in Novosibera, which has mandated Banque St Tropez et Cap Ferrat (BSTCF) a French bank with global operations, to raise a multicurrency syndicated loan of US $6 billion under a market standard form of a syndicated loan agreement (SLA) subject to English law (in a form similar to but not the same as the LMA model form).

BSTCF has distributed an Information Memorandum (IM) to potential members of the syndicate. The IM included amongst other information concerning NME and the market for mining and exploration, revenue projections for NME based on the assumption that NME would be successful in obtaining mining concessions in a number of African countries. Financial analysts have now concluded that these were totally inaccurate. The banks in the syndicate formed by BSTCF include, Yacht Jet and Bonus(YJB)(US), Bank Yorkshire & Rosbif (BYR)(UK), Bank Teriyaki and Tempura(BTT)(Japan), Banco Sangria et Tapas (BST) (Spain), Bank Schnapps und Bierhal (BSB)(Germany), Bank Mandarin (BM)(Singapore).

The IM contained a number of common disclaimers usually included in IMs used in the global markets.

Advise BSTCF on what legal exposure it may have in respect of the inaccuracies in the IM.

The US and a number of EU countries including Germany, Italy, France and Spain as well as the UK have imposed sanctions on Novosibera and corporate entities set up there, due to Novosibera’s alleged involvement in supporting regimes accused recently of war crimes in some countries in the Levant. The sanctions prohibit banks incorporated in each of the above countries from doing any banking business with Novosibera or entities incorporated there, from any of their banking offices anywhere on the globe though the details of the sanctions vary from country to country. The US sanctions are in similar form but also apply not only to all US incorporated banks but to all foreign banks with a US office.

NME has given notice to BSTCF under the terms of the SLA that it wishes to drawdown €100 million, US$ 100 million and ¥5 billion on the next LIBOR interest rate fixing date which is in ten days. BSTCF (France), BST (Spain), BSB (Germany) BYR (UK) have informed EM that they are unable to provide funding due to the EU sanctions and will be relying on an “illegal to lend” provision in the SLA. US incorporated banks (YJB)and other banks in the syndicate with US offices (BYR, BST and BM) have also cited the US sanctions as the reason for their refusal to comply with the upcoming drawdown request and will also be relying on the same “illegal to lend” clause in the SLA.

All payments and transfers of funds under the SLA are to be made to the office of BSTCF as follows: US$ in London; € in Paris, Frankfurt or Milan, and ¥ in Tokyo.

BM has today informed BFGS that EM is in breach of a loan agreement with a syndicate of banks in Singapore.

In the meantime, the government of Novosibera has warned countries imposing sanctions that unless they are lifted immediately, Novosibera would impose a moratorium in three weeks’ time on all foreign currency payments due from Novosiberan companies to Banks incorporated in countries imposing sanctions until such time as sanctions are lifted. Interest payments are due to the syndicate banks in all three currencies under the SLA in four weeks’ time

Advise BSTCF and the other members of the syndicate mentioned above on their legal position especially with regard to the drawdown and their rights under the SLA if a moratorium is in fact imposed by the Government of Novosibera.