Yes Bank, located in Mumbai, was saved by the rules of the English language when a London court decided in its favor, rejecting a $7.5 million lawsuit launched by American financial services firm Cantor Fitzgerald.
According to media reports, Cantor Fitzgerald sued Yes Bank for $7.5 million for failing to pay a financing fee for its $2 billion foreign portfolio investment (FPO) raised in 2020.
Cantor Fitzgerald and two other firms were chosen by the bank at the time to generate funds by attracting potential investors to invest in the FPO.
Cantor Fitzgerald claimed a 2% commission on the total investment made by three entities: Tilden Park ($300 million), Hinduja group ($22.7 million), and Amansa ($50 million), according to sources.
The financial services firm claimed in court that the agreement with Yes Bank comprised private finance as well as the FPO.
The crux of the matter is the word “Financing,” or, more particularly, this sentence in the agreement between Yes Bank and Cantor Fitzgerald: “the private placement, offering or other sales of equity instruments… (“a “Financing”).”
According to Cantor Fitzgerald, the term “private” only qualifies placement and not “offering or other sales of equity instruments…”
Judge Robert Bright ruled in his decision that Yes Bank was correct in construing the word “Financing” to cover only private offerings and not FPO. He went on to say that Cantor Fitzgerald was not compensated by the hour or by the number of introductions made.
Shares that are sold privately rather than publicly are referred to as private offers (like FPO)
Before delivering a verdict in favor of Yes Bank, the court delivered a brief tutorial in English grammar, explaining nouns, verbs, and adjectives. Private offers are shares that are sold privately rather than publicly (like FPO). (Provigil)
“Where an adjective or determiner is followed by a series of nouns in a list, the conventional understanding is that it modifies all the nouns in that list…” The court added that this grammar rule is not at all uncommon and is known to “every Tom, Dick, and Harry”.
As a consolation prize, the US-based financial services firm was awarded $21,195 in interest on the retainer charge.