SWAPS: “CONFUSION BETWEEN THE OBJECT OR CONTENT OF THE CONTRACT, AND THE INFORMATION THE INTERMEDIARY IS REQUIRED TO PROVIDE, PRIOR TO THE CONCLUSION OF THE SWAP”.
The Court of Turin disapply and redraw the principles set out by the Joint Divisions on the subject of derivatives.
With ruling no. 673/2022, the Court of Turin acknowledges certain concepts known to operators in the field of derivatives and misinterpreted for so long by case law, which have allowed and still allow a sectarian use of actions for damages brought by investors who are simply unhappy with their investments.
In the case in question, the plaintiff company entered into an interest rate swap (IRS) with effective date March 31, 2011, to hedge the interest rate risk on a ten-year loan. The company complained, among other things, of the existence of a contractual risk that originally was in favour of the credit institution, the circumstance that the debt was only partially correlated to the swap and that the most efficient solution would have been a cap option.