The rules of English grammar came to the rescue of Mumbai-headquartered Yes Bank as a London court ruled in its favour while rejecting a $7.5 million lawsuit filed by US financial services firm Cantor Fitzgerald.
According to a media report, Cantor Fitzgerald filed a $7.5 million lawsuit against Yes Bank for failing to pay a financing fee for its $2 billion foreign portfolio investment (FPO), which was raised in 2020.
Back then, the bank had picked Cantor Fitzgerald and two other firms to raise funds by bringing potential investors to invest in the FPO.
As per reports, Cantor Fitzgerald claimed a two per cent commission on the total investment made by three entities – Tilden Park ($300 million), Hinduja group ($22.7 million) and Amansa ($50 million).
The financial services firm argued in the court that the deal with Yes Bank included private financing and the FPO.
The crux of the case lies with the term “Financing” or, more specifically, with this line in the agreement between Yes Bank and Cantor Fitzgerald: “the private placement, offering or other sales of equity instruments… (“a “Financing”).”
Cantor Fitzgerald argued that the adjective “private” qualifies only placement and not “offering or other sales of equity instruments…”
In its judgment, Justice Robert Bright ruled that Yes Bank was right in constructing the term “Financing”, which included only private offerings and not FPO. He added that Cantor Fitzgerald “was not being paid by the hour or by reference to the number of introductions made.”
Private offerings are shares sold privately, not via a public offering (like FPO).
The court gave a short lesson on English grammar, explaining nouns, verbs, and adjectives while delivering a judgment in favour of Yes Bank.
“Where an adjective or determiner is followed by a series of nouns in a list, the conventional understanding is that it modifies all the nouns in that list…” The court added that this grammar rule is not at all uncommon and is known to “every Tom, Dick and Harry”.
However, as a saving grace, the US-based financial services firm was awarded $21,195 interest on the retainer fee.
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