New Judgment: Re Argentex LLP [2025] EWHC 3125 (Ch)

The judgment (of ICC Judge Agnello KC) concerns whether the Administrators were entitled to close out the foreign exchange (FX) related contracts which made up Argentex’s trading book. In particular, the judgment concerns an issue of construction of some importance in connection with FX related contracts, as to the circumstances in which a provider of FX related services can close out a contract for “its own protection” (a term which appears in many FX related contracts).

Argentex was placed into special administration in July 2025. Its business included the provision of FX services. The trading book comprised contracts for FX derivatives (forwards and options) that Argentex had written for its customers.

After the Administrators concluded that a sale of the trading book was not possible, they considered that it would be desirable, if contractually entitled to do so, for Argentex to close out the contracts that make up the trading book and pursue the debts which would arise on any close out. The Administrators sought directions as to whether they were entitled, as matter of construction of the agreements with its customers, to do so. Richard Fisher KC appeared on behalf of a representative party which was currently “out the money” in respect of its FX contract and Marcus Haywood appeared on behalf of representative parties who were currently in “in the money”.

Argentex’s general terms and conditions provided that it could close out FX related contracts it had entered into in a number of circumstances, including where “Argentex reasonably considers it necessary for its own protection”. The Administrators and the “in the money” representative parties contended that in the circumstances that arisen, in particular market volatility prior to appointment of the Administrators and the loss by Argentex of its hedging contracts with third party banks, Argentex was entitled to close out its trading book “for its own protection”. Ruling in favour of the “out of the money” representative party and rejecting the arguments advanced by the Administrators and the “in the money” representative parties, the Court held that, on its proper construction, the relevant provision of the contracts could not be used by Argentex to attempt to protect itself from the economic effect of entering into the FX contract itself, nor from its own insolvency or in circumstances where it would, effectively, prefer not to carry out its obligations under the terms of the contracts. In the circumstances, the Court refused to grant the direction sought by the Administrators that they were entitled to close out Argentex’s trading book.

The full judgment can be read here.