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The Legal Aspects Of Non-Financial Market Central Counterparties (Ccp): A Case Comment On Iata V. Ansett, Christian Chamorro-Courtland
The Legal Aspects Of Non-Financial Market Central Counterparties (Ccp): A Case Comment On Iata V. Ansett, Christian Chamorro-Courtland
Christian Chamorro-Courtland
International Air Transportation Association (IATA) v. Ansett (2008) was decided correctly by the High Court of Australia. However, the reasoning of the judges was unsound due to their apparent unfamiliarity with the operation of Central Counterparty (CCP) systems. The judges failed to recognize that ‘open offer’ was the mechanism of counterparty substitution used in the IATA clearing rules to create mutuality and guarantee multilateral insolvency set-off. This article analyses the Ansett decision and describes the legal principles that should have been used to decide the case. Only financial market CCPs receive special statutory protections from burdensome corporate insolvency laws. Therefore, …