UK: Better Late Than Never: Late Service Of Notice Of Amount Payable Under Section 6(D) Of The ISDA Master Agreement

Last Updated: 7 January 2015
Article by Richard Caird, Sam Coulthard and Alexandra Doucas

Goldman Sachs International v. Videocon Global Ltd and another [2014] EWHC 4267 (Comm)

Goldman Sachs International (GSI) has recently succeeded on an application for summary judgment against Videocon Global Ltd (Videocon) on somewhat unusual facts. The short judgment of Mr Justice Teare (the Judge) reflects the continuing ability of the 1992 ISDA Master Agreement to generate previously undecided points of dispute in relation to its construction, notwithstanding more than 20 years' use. It is interesting to note that major market participants continue to use the 1992 form of the ISDA Master Agreement.

Section 6(d) of the ISDA Master Agreement requires that notice of the amount due on early termination (and details of the account to which it should be paid) must be provided on or as soon as reasonably practicable following the occurrence of an early termination date. The Judge was required to decide whether GSI was entitled to summary judgment in circumstances where its notice was not served in compliance with that requirement.

Background facts 

GSI and Videocon entered into a number of currency swaps under the umbrella of an ISDA Master Agreement. The judgment does not specify which, but it appears from the extracts quoted by the Judge that the parties entered into an agreement in the form of the 1992 Master Agreement. GSI terminated that agreement on 2 December 2011 following Videocon's failure to meet various margin calls.

GSI provided a notice setting out the amount it sought (approximately US$4 million) on 14 December 2011, and later applied for summary judgment. At the hearing of such application (in September 2013), Videocon was held to be liable to GSI in principle, but the judge at that hearing also decided that GSI had failed to provide the "reasonable detail" of its calculations which section 6(d) requires. It therefore failed to obtain judgment, and did not serve a revised calculation until March 2014.

Having done so, it made a second application for summary judgment, which the Judge was required to consider. 

Section 6(d) of the 1992 ISDA Master Agreement

The relevant parts of section 6(d) are as follows:

"(d) Calculations

(i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations ... and (2) giving details of the relevant account to which any amount payable to it is to be paid. ...

(ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective. ... Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate."

The parties' arguments

Videocon alleged that, on its proper construction, section 6(d) meant that service of a notice meeting the requirements of section 6(d) (including as to timing) was a condition precedent to any amount becoming payable on early termination.

GSI argued that Videocon was wrong, for four reasons:

  1. GSI's notice had indeed been served as soon as reasonably practicable after the early termination date (the Judge held that Videocon "plainly" had a real prospect of establishing at trial that this was not the case);
  2. even if notice was served late, the amount it specified would still be payable;
  3. the words "on or as soon as reasonably practicable after" in section 6(d) related only to the making of the necessary calculations of amounts due following termination, not to the requirement to communicate them to the other party; and
  4. GSI would in any case be entitled to recover the sum it sought from Videocon as damages, if it were unable to recover it as a debt.

The Judge rejected GSI's third argument, holding that the requirements of section 6(d) as to timing applied equally to the service of notices. In relation to GSI's fourth ground, the Judge confined himself to noting that the measure of damages to which GSI would be entitled might not be the same as the sum it sought to recover as a debt. In the event, however, he did not need to base his judgment on either of these matters, but focused instead on GSI's second argument.

Is the amount sought in a notice under section 6(d) still payable if the notice was served late?

The crux of this argument is, essentially, whether a notice which does not comply with the timing requirements of section 6(d) is "effective", for the purposes of sub-section (ii) of that section, such that the amount claimed in the notice is payable. The Judge held in this case that it was. 

In order to determine when the notice became "effective", the Judge considered the purpose of the notice, as it could be understood from sub-section (i) of section 6(d). He held that the purpose of the notice was twofold: (a) to provide the paying party with an explanation of the sum claimed such that it could be understood and (if necessary) challenged; and (b) to inform the paying party of the account to which he or she should pay the amount sought.

The Judge's view was that once a notice met these two purposes, it was effective, such that the amount it claimed became payable. If such a notice did not comply with the requirements of section 6(d) as to timing, then it was late, and in breach of contract as a consequence, but it was not ineffective.

The Judge said in his judgment that the alternative approach (advocated on behalf of Videocon) was so lacking in commercial sense that the parties could not have intended it. GSI also made the point in its submissions that Videocon's construction would have the effect that, if notice were to be served so much as a day late, the receiving party would lose its entitlement to be paid.


Notices are often spoken of as being "valid" or "invalid", and it can be tempting to treat those terms as synonymous with "effective" or "ineffective". To be valid, a notice has to comply with any mandatory requirements as to its form or content. This judgment illustrates that a notice can be effective (the term used in section 6(d)), even if it does not comply with contractual requirements.

It is hard to argue with the proposition that some fairly clear wording would be needed in an agreement, were it intended that a party entitled to receive payment would be deprived of that right completely because of late service of a notice. On the other hand, it is also plainly unsatisfactory for there to be no effective sanction for failure to comply with a clear contractual requirement as to the timing of service of notices.

The response of the Judge to the latter point was that there is indeed an effective sanction, which is the right of the paying party to claim damages for breach of contract in respect of any loss suffered as a result of the notice being served late. No argument was advanced by Videocon that it had suffered any such loss, but the Judge said that he did "not consider that it can be said that lateness can never cause loss. All will depend upon the circumstances of the case."

It may be that the provisions of section 6(d) in relation to payment of interest will give rise to claims for damages in similar future cases. Interest is payable from the early termination date until the date of payment, irrespective of when an effective notice is actually served. Where the ISDA Master Agreement is terminated for an event of default, the paying party will need to pay interest at the default rate (the receiving party's cost of funding the sum, plus 1 per cent per annum). If the receiving party delays serving an effective notice, it could receive a windfall in the form of additional interest for which the paying party would not otherwise be liable, and which it cannot avoid.

While it is open to the paying party to claim damages in respect of any such loss, the reality must be that the Judge's conclusions on the meaning of section 6(d) give the receiving party the whip hand. It is doubtful how many payers will consider it worthwhile to go through what will often be a laborious and intricate exercise of proving an entitlement to damages in these circumstances, with the accompanying uncertainty as to outcome and risk as to costs.

The judgment will, however, provide some comfort to those entitled to receive payment following early termination of an ISDA Master Agreement, that their rights will not be extinguished because of a technical failure to serve a timely notice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
28 Sep 2017, Seminar, London, UK

On 26 July the FCA published its long-expected consultation paper on the extension of the SMCR to all FCA-authorised firms. The so-called "core regime" introduces the key concepts of regulator-approved senior managers, firm-approved certification staff and conduct rules applicable to virtually all staff.

3 Oct 2017, Conference, Zurich, Switzerland

As the founding Partner of the Europe-Iran Forum, Dentons Europe will once again support this year’s event. This compelling event which explores all Iran-related topics will take place in Zürich on 3rd and 4th October.

4 Oct 2017, Conference, Munich, Germany

Dentons Global Real Estate Group is delighted to be exhibiting once again at EXPO REAL, the International Trade Fair for Property and Investment which takes place on 4-6 October, 2017 in Munich, Germany.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.