The legal aspects of non-financial market central counterparties

Chamorro-Courtland, Christian 2011, The legal aspects of non-financial market central counterparties, Banking and finance law review, vol. 27, no. 4, pp. 553-583.

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Title The legal aspects of non-financial market central counterparties
Author(s) Chamorro-Courtland, Christian
Journal name Banking and finance law review
Volume number 27
Issue number 4
Start page 553
End page 583
Total pages 31
Publisher Thomson Reuters
Place of publication New York, N.Y.
Publication date 2011
ISSN 0832-8722
Summary International Air Transport Association v. Ansett Australia Holdings Limited(2008) was decided correctly by the High Court of Australia. However, the reasoningof the judges was unsound due to their apparent unfamiliarity with the operationof Central Counterparty (“CCP”) systems. The judges failed to recognize that“open offer” was the mechanism of counterparty substitution used in the InternationalAir Transport Association (“IATA”) clearing rules to create mutuality andguarantee multilateral insolvency set-off. This article analyzes the Ansett decisionand describes the legal principles that should have been used to decide the case.Only “financial market” CCPs receive special statutory protections from burdensomecorporate insolvency laws. Therefore, it is argued that the new transnationallex mercatoria confers analogous protection on the arrangements of “non-financialmarket” CCPs such as IATA. The High Court would have reached the same outcomethat they did by applying this legal framework to the facts in Ansett.
Language eng
Field of Research 1801 Law
Socio Economic Objective 970118 Expanding Knowledge in Law and Legal Studies
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©2011, Thomson Reuters
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Document type: Journal Article
Collections: Faculty of Business and Law
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