Ratio Decidendi
Complex financial instruments must be interpreted using the same principles as other contracts — by reference to what a reasonable person with the relevant background knowledge would understand the language to mean, read in the context of the instrument as a whole.
Hechos
Sigma Finance Corporation entered into a structured investment vehicle. When it became insolvent, a dispute arose over the priority of claims under the security trust deed.
Resumen de la sentencia
The Supreme Court held the assets should be distributed in accordance with the natural reading of the trust deed. Lord Mance emphasised that financial instruments must be construed as a whole and that no special interpretive rules apply.
Citas clave
"The resolution of an issue of interpretation in a case like the present is an iterative process, involving checking each of the rival meanings against other provisions of the document and investigating its commercial consequences."
— Lord Mance
Tratamiento posterior
Authority on interpretation of complex financial instruments.