Key points

If your contract mandates the manner in which a notice must be given to the other party that procedure must be followed irrespective of whether you think another method is just as good.


A bank and borrower had entered into an ISDA Master Agreement (1992) in relation to a swap agreement. The bank had the option to continue the arrangement for an extended period if it served notice under the agreement to do so. The bank wanted to extend the swap because it was in the money and such an extension was considered profitable. The borrower was unhappy with the extension as it would incur additional liability to the bank.

The notice had to be served by the bank by 11am on 30 December. The contract specified the methods by which the bank could give notice - in writing, delivered in person, by telex or fax, by registered mail or by approved electronic messaging system – the latter excluded email.

On the morning of 30 December ever more frantic attempts were made by the bank to serve a notice extending the swap on its customer. The customer was closed for the New Year holiday and faxes, voicemails and emails all went unanswered.


The Court held that none of the fax, voicemails or emails were effective to extend the swap as the bank wanted. 


The personnel dealing with the matter at the bank appear to have simply followed their standard operating procedure for communicating with the customer and used the phone and email accordingly. No one had noticed that the SOP was not going to be in compliance with the contract that they sought to extend.

There was much discussion in the case about the use of email and the effect of "out of office" messages in the context of whether a notice has been received. None of which mattered in the case itself because email was not a method which was a contractually approved mode of service. However, because the email was not opened or seen by the customer until after the deadline had passed it did not matter whether the Bank could establish that it would have arrived in his inbox before 11am. The agreement made it clear that the right to extend was to be exercised by giving notice to [the customer], not by serving a notice on [the customer]. The Court considered that "giving notice to" can mean different things in different contexts, but as a matter of plain English it involves actual communication of the subject-matter of the notice to the person who receives it. The last word on this subject should be that of Lord Hoffmann's in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 776:

"If 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, however clear it might have been that the tenant wanted to terminate the lease."

Greenclose Limited v National Westminster Bank plc