Germany’s Commerzbank in attempt to overturn British ruling that it should pay €52m in bonuses
COMMERZBANK, Germany's second-largest lender, is attempting to overturn an English court decision that forces it to stump up around €52m in unpaid bonuses to a group of London-based investment bankers.
The bank said on Wednesday it had applied directly to the UK Court of Appeal after last month failing to persuade London's High Court to allow it to appeal a ruling that it had breached its legal duties by slashing 2008 bonuses by up to 90pc.
Commerzbank, which has twice been bailed out by German taxpayers, argues that its now integrated Dresdner Kleinwort subsidiary was both justified and obliged to cut bonuses for 104 bankers as losses spiralled to €6.5bn and threatened the survival of the business during the financial crisis.
But its two-and-a-half year battle to win the sympathy of English judges has so far failed. It went to the Court of Appeal last year in an attempt to dismiss the case before it came to trial, but lost. It was undaunted by a second attempt.
"Commerzbank has today applied directly to the UK Court of Appeal to seek to overturn the recent Dresdner Kleinwort bonus ruling," a spokeswoman said. "We strongly disagree with the decision of the UK High Court at first instance.
"It is the bank's contention that ... no binding contractual commitment was made, that bonus amounts communicated were provisional and that it was reasonable and responsible to reduce the bonuses in the light of the ... loss that Dresdner's investment banking operation posted for 2008."
Lawyers for the bankers have argued the bank reneged on contractual promises, that heavy Dresdner losses had been well known and, in fact, had been the reason the bank had set up a "staff retention plan" by promising loyal bankers a share of a minimum €400m guaranteed bonus pool.
Legal experts, however, have said the bank has little to lose by trying its luck with the Court of Appeal again in a high profile case that has already seen Chief Executive Martin Blessing come to London to argue his case in court.
With the summer recess looming, the court might not decide whether to grant the appeal much before October.