Home Information Cases Mirador International LLC v MF Global UK Ltd (2012)

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Mirador International LLC v MF Global UK Ltd (2012)


The court held that the obligation in an introducing broker agreement for the broker on termination to pay sums due on all accounts already introduced, covered accounts where, although the account had been opened during the IBA contract period, the customer had been first introduced by the introducing broker prior to its commencement.


The appellant broker (MG) appealed against a decision [[2011] EWHC 683 (Comm)] directing that an account be taken of sums due to the respondent company (MR) under an introducing broker agreement (IBA) in respect of trading carried out by a new customer of MG.

In July 2003, a foreign exchange dealer (H) entered into negotiations for him and his team to commence acting as introducing brokers for MG. In August, the team members accepted offers of employment from MG and a week later a team member introduced a new client (D) to MG. MR was incorporated in September 2003, with H as its manager, to act as the introducing broker and on October 3, the IBA was executed between MG and MR. On that same date, D's account with MG was opened. The IBA was terminated in 2004 and MR claimed to be entitled to receive commission on transactions carried out by D with MG under the terms of clause 8 of the IBA which stated that on termination MG was to pay to MR sums due on "accounts already introduced to MG". MG denied that MR was so entitled, because D had not been introduced by MR under the terms of the IBA and that on a true construction of the IBA, MR did not have any claim arising out of events that had occurred before it became effective. At first instance, the judge held that although the IBA was not executed until October 2003, it was clear that the deal began to be put into operation from July and therefore it was not possible for the parties to think that what was done in anticipation of the contract was not done for the purposes of and under the contract. Therefore the judge held that an account that had been literally introduced to MG before October 3 by H or one of his team, could nonetheless be viewed as an account "already introduced" to MG by MR and as such commission was due. The issue on appeal was whether the IBA covered introductions of customers made prior to the inception of the contract.


(Lord Justice Moore-Bick dissenting) The meaning of the IBA was a matter of assessment, as to how a reasonable person, knowing of the issue before the court and the facts known to both parties at the time of contract, would have understood the contract at the time it was made. Against that background, ultimately, the decisive question was not so much whether an introduction was first made within the IBA contract period, but whether the introduction was open for acceptance and accepted within that contract period and for the purposes of the contract. The critical question for the purposes of cl.8 of the IBA was whether D's account or accounts were "accounts already introduced to MG". Even if that "already" went back no further than the commencement of the IBA, and it plainly went back at least that far, D's account was an account opened by MG during the contract period. It did not matter that it was an account opened during the contract period for a customer first introduced before the commencement of the contract. When the IBA came into operation, the introduction of D was still pending, it had not yet been accepted. Upon the execution of the IBA, that introduction was plainly taken over by MR and became MR's introduction. Although the judge at first instance did not put his conclusion in quite that way, his intuition was quite right when he held that "accounts already introduced to MG" included those introduced by H's team to MG in expectation that they would be customers, and that it would be absurd to draw a distinction between customers introduced as part of the transition process on October 2, and those introduced on October 4, 2003 (see paras 67-69 of judgment).

Appeal dismissed

Court of Appeal
Rix LJ, Moore-Bick LJ, Lewison LJ
Judgment date
13 December 2012

LTL 13/12/2012 : [2012] EWCA Civ 1662