A London Court Axes IS Prime' Lawsuit Accusing TF Global Markets of Violating Exclusivity Contract

A London court has dismissed most of a $15 million lawsuit filed by IS Prime accusing TF Global Markets (UK), a British foreign exchange broker, of violating an exclusivity agreement with a business partner, ruling that their agreement did not restrict dealing in index swaps with rivals.

IS Prime claimed that transactions amounting to $9 million had breached the terms of a 2017 exclusivity agreement. However, according to Richard Salter, Deputy Judge at the High Court, the index swaps were not included under the agreement because they were not  offered by IS Prime.

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"I have accordingly come to the conclusion that the claim by IS Prime, insofar as it relates to the trading of index swaps after Dec. 18, 2017, has no real prospect of succeeding," the judge wrote.

The lawsuit arose from the 2017 acquisition by IS Prime Risk Services Inc. of TF's subsidiary, Think Liquidity LLC, when Think's business assets, customer lists, intellectual property rights and the domain name thinkliquidity.com were all sold to IS Prime.

IS Prime accused TF and two related subsidiaries in 2020 of trading interest rate swaps in breach of terms on forex trades and other financial products.

But the judge advocate with TF that the exclusivity agreement only controlled trade between IS Prime and TF, and did not restrict any transactions not specified in the terms.

The British arms of the companies were not a part of the sale agreement. But the transaction called for IS Prime and TF Global Markets (UK) to sign service contracts linked to forex market terms, trading conditions for index swaps and an exclusivity agreement.

IS Prime later accused its business partner of using the services of another broker, beginning in September 2018, in breach of the agreement.

But the High Court found on Thursday that, in 2017, IS Prime Ltd. London told TF that all index swap transactions would be entered with IS Prime Hong Kong Ltd. from then on — freeing TF to carry out those transactions with others.

"In my judgment, a reasonable commercial party in the position of Think would have interpreted that as a statement that, from Dec. 18, 2017, IS Prime would not itself trade that class of product," the judgment says.

The judge rejected IS Prime's argument that it continued to offer swaps "in the sense that it was thereafter able, willing and prepared to arrange such transactions with IS Prime Hong Kong."

A High Court judge refused to stay the suit in December 2020 after finding that the two sides had not agreed to resolve the dispute in arbitration before pursuing parallel legal claims.