Lending transactions - fees capable of being penalties?

In a recent case, Edgeworth Capital (Luxembourg) S.A.R.L and another v Ramblas Investments B.V [215], the High Court held that a €100m upside arrangement fee was not a penalty, even though it was payable on an acceleration of the facility as a result of a cross-default under a related personal loan. The case contains a useful summary of the current law on penalties, and is further evidence that the courts are usually unwilling to interfere with unambiguous terms in business contracts. 

Click here to read the full version of the judgement

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