Supreme Court rules in favour of Marel
The Supreme Court of Iceland has today, 27 September, given its judgement in
the case Glitnir bank hf. brought against Marel hf. The verdict is in favour of
Marel. The judgement is accessible in whole (in Icelandic only) on the Court’s
The case originates from a dispute between the parties on the method of
settlement of certain derivative agreements, which were made in relation to the
issuance of a bond (MARL 06 1) in 2006. Immediately following the collapse of
Glitnir in October 2008, Marel’s management requested that the agreements would
continue to be valid until the agreed end date of February 2012. However,
Glitnir was not able to honour its obligations under the agreements and the
parties agreed on a settlement on 5 May 2009.
As a result, Marel paid EUR 20.3 million to Glitnir. Using a different method
of calculating the settlement amount, Glitnir claimed that Marel should pay an
additional EUR 4 million plus 6% interest from the date of settlement. Marel’s
opinion was that this approach was invalid as Glitnir had failed to meet the
terms of the derivatives agreements and could therefore not claim further
payment profiting from the Bank’s failure to comply with the agreements. Both
parties agreed to file their disagreement on the method of calculation to the
Icelandic courts for resolution. The District Court of Reykjanes ruled in
favour of Marel 12 April 2011, and now the Supreme Court of Iceland has given
its verdict on the matter, reaffirming the ruling of the District Court.
Marel welcomes this decision given it supports the company’s position on this
matter. The case is now closed and puts an end to any uncertainty relating to
Marel’s original settlement with Glitnir.