Frankfurt: High court orders German bank to pay out
The ruling by Mr Justice Owen came despite Commerzbank’s argument that the bonuses were discretionary, rather than a contractual obligation. Commerzbank – headed by chief executive Martin Blessing – immediately said it would appeal, angering bankers who had been assured by Mr Blessing that the court’s decision would be accepted.
Clive Zietman, head of commercial litigation at London law firm Stewarts Law, represented 83 of the bankers. He said: ‘It was wrong of the bank to renege on its commitment. By doing so it acted contrary to well-established principles of English contract and employment law. It would be a pity if this case were to continue since it would seem to us that the only beneficiaries of further action will be the lawyers.’
Commerzbank said it was ‘disappointed’ with the decision, according to a report in the Daily Telegraph. In a statement the bank said: ‘We believe that the decision to reduce discretionary bonuses in light of the €6.5 billion of losses at Dresdner Klienwort in 2008 was responsible and justified.’
In other banking news, prospective legislation was unveiled in the Queen’s speech – which sets out the British government’s forthcoming legislative agenda -- that will see retail and investment banks split, as well as executive pay cut and employment tribunals curbed, according to the Daily Telegraph.