1992 ISDA Master Agreement


The recent High Court judgment in Greenclose Limited v National Westminster Bank plc(1) provides a stark and costly reminder that notices under Section 12 of the 1992 International Swaps and Derivatives Association, Inc (ISDA) Master Agreement must be delivered in the manner prescribed therein. Unless expressly specified in the schedule, applicable transaction confirmation or as otherwise agreed between the contracting parties, email and telephone notice is an unacceptable method of delivery and any notice delivered by such means will be ineffective as a matter of law.


This case concerned the contractual right of National Westminster Bank plc to extend the term of a five-year interest rate collar transaction entered into with Greenclose Limited, a family-owned and operated hotel company, by a further two years by giving notice to Greenclose by 11:00am (Greenwich Mean Time) on December 30 2011. The collar transaction was documented under the 1992 ISDA Master Agreement (Multicurrency - Cross Border) form governed by English law, together with a schedule thereto and a transaction confirmation setting out the commercial terms of the collar transaction. Part 4 of the schedule was populated with the address and telephone number of Greenclose, but no fax number or email address was expressly included. Due to the economic climate and market movements following the global financial crisis, the collar transaction was "deep deep in the money"(2) in favour of NatWest and internal instruction was made by a senior NatWest trader to give notice to Greenclose that NatWest would exercise its option to extend.

Accordingly, at 9:35am on December 30 2011, NatWest attempted to fax notice of its exercise to extend the collar transaction to the office fax number of Greenclose but the transmission failed. At 9:45am NatWest sent an email to Greenclose entitled "Notice to extend existing Base Rate Collar IRG14654371", attaching a copy of the failed fax together with notification that NatWest was exercising its right to extend. Then, at 9:58am NatWest attempted to contact the offices of Greenclose by phone but was unable to reach any member of staff as the offices were closed for the Christmas break. A voicemail was then left on the mobile phone of the managing director of Greenclose explaining that NatWest had tried to contact Greenclose by fax and subsequently by email, and noted again that NatWest was exercising its right to extend the collar transaction.

1992 ISDA Master Agreement

Section 12 of the 1992 ISDA Master Agreement provides:

"Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system) to the address or number or in accordance with the electronic messaging system details provided (see the Schedule) and will be deemed effective as indicated."(3)

It then lists the following five prescribed forms and methods:

  • if in writing and delivered in person or by courier, on the date that it is delivered;
  • if sent by telex, on the date that the recipient's answerback is received;
  • if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender's facsimile machine);
  • if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or
  • if sent by electronic messaging system, on the date that the electronic message is received.

No evidence was produced in this case that the above prescribed forms were varied by the parties. It was also noted that "electronic messaging system" did not include email as "[i]n 1992, email was not in common use and thus the reference to 'electronic messaging system' is unlikely to have been intended to include it".(4) This was further evidenced by reference to ISDA expressly specifying email as a form of communication different from that of electronic messaging system in Section 12(a) of the 2002 ISDA Master Agreement.

Regardless of whether the notice was permitted to be delivered by email, the fact that no email address was specified in the schedule or the transaction confirmation was a clear indication in this case that "the contracting parties did not intend notices to be served by email",(5) notwithstanding that a post-transaction acknowledgment was sent by email from Greenclose to NatWest and that the parties typically corresponded by way of email in general communications.

Accordingly, Justice Andrews held that the "purported notice sent by email was not a valid and effective notice and it did not operate to extend the term of the Collar [transaction]".(6) As a consequence, the collar transaction came to an end on its termination date (January 4 2012) and NatWest was ordered to repay all sums that Greenclose had paid to it since that date, together with interest.


Lawyers and those responsible for delivering notices should note the following points. First, always check the documentation (including the relevant ISDA Master Agreement, the schedule thereto, any transaction confirmation and any other amendment documentation) for the contractually agreed delivery method and do not assume one way over another – each trade may be different. Second, if trades are documented under the 1992 ISDA Master Agreement, if it is the intention of the parties to deliver notices by way of email, this should be expressly stated in the schedule or relevant transaction confirmation (including specifying that if sent by email, it is valid on the date that it is delivered). In addition, when serving any notice by email always, as a matter of best practice, tick the 'Request a delivery receipt' and 'Request a read receipt' or equivalent in the email software as a means to evidence proof of delivery.

As Lord Hoffmann expressed in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd,(7)"[i]f the clause had said that the notice had to be on blue paper, it would have been no good serving a notice on pink paper". Thus, when serving delivery notices under Section 12 of an ISDA Master Agreement, always follow what has been contractually agreed.

For further information on this topic please contact James Warbey or Christopher Wall at Milbank, Tweed, Hadley & McCloy LLP by telephone (+44 20 7615 3000), fax (+44 20 7615 3100) or email ( or The Milbank, Tweed, Hadley & McCloy LLP website can be accessed at


(1) [2014] EWHC 1156 (Ch).

(2) Ibid at para 74.

(3) Section 12(a) of the 1992 ISDA Master Agreement.

(4) Ibid at para 129.

(5) Ibid at para 125.

(6) Ibid at para 134.

(7) [1997] AC 749 at para 776.