Going back to the 2010 decision in Firth Rixson by the excellent Briggs J (now Lord Briggs), the English courts have been keen to uphold ISDA documents as written, even if (as in that case) it meant casting doubt on prudential capital policies (because section 2(a)(iii) operated rather like a walkaway clause, which had been ruled out by Basel). As Briggs J said, the ISDA Master “is one of the most widely used forms of agreement in the world. It is probably the most important standard market agreement used in the financial world… It is axiomatic that it should, as far as possible, be interpreted in a way that serves the objectives of clarity, certainty and predictability, so that the very large number of parties using it should know where they stand”. The interests of the market outweigh the interests of any particular litigant. And so to Wednesday’s judgment by Robin Knowles J in The Netherlands v Deutsche Bank AG, where Deutsche, but not The Netherlands, was obliged to collateralise its out of the money position using a 1995 CSA dated 14th March 2001. The date is significant because it predated the concerns about negative interest rates and the 2014 ISDA Collateral Agreement Negative Interest Protocol. That protocol (now signed up by well over 220 banks) amended existing CSAs between adhering parties to provide that if the Interest Amount was negative, the absolute value had to be paid by the collateral provider; which addressed the inescapable fact that the 1995 CSA only requires collateral to be paid by the collateral taker. However, this CSA had not been amended, and so it came to pass that The Netherlands received cash collateral and could only redeposit it at less than 0% p.a., and so found itself sitting on a gradually wasting asset, while Deutsche was being paid to borrow the cash. The Netherlands accepted that the CSA did not have any express obligation on Deutsche to pay negative interest, but it tried a clever argument to the effect that the unamended 1995 CSA in effect meant that Deutsche had to give credit for the negative interest in the calculation of “Credit Support Balance” (and so “Return Amount”). Robin Knowles held that upholding the words of the document was paramount, and so Deutsche has got away with a windfall, unless, of course, the case goes to appeal.