LONDON, Nov. 8 (UPI) -- A British court Friday rejected Barclays' and Deutsche Bank's bid to block companies suing the banks for tying rate manipulation charges to derivatives sales.
In separate cases, Guardian Care Homes and Unitech Global Ltd. alleged Barclays and Deutsche Bank wrongfully sold them interest-rate-hedging products. The complaints arose in part because the swaps were linked to the London interbank offered rate benchmark, which several banks allegedly tried to rig, The Wall Street Journal reported.
Barclays and Deutsche Bank said the cases brought by Guardian Care Homes and Unitech Global Ltd. didn't have anything to do with the benchmark rigging allegations.
In its ruling Friday, the Court of Appeal said the banks "did propose the use of Libor and it must be arguable that, at the very least, they were representing that their own participation in the setting of the rate was an honest one."
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The court denied Deutsche Bank's appeal to prevent Unitech Global Ltd. from connecting allegations it was wrongfully sold swaps to wider allegations of interest-rate rigging.
The two companies initially went to court over Unitech's alleged unpaid debts to the German bank.
"We are disappointed by the court's ruling, which we will appeal," a Deutsche Bank spokeswoman told the Journal. "This is a longstanding case of a loan that was made and not paid back. The defendant's introduction of broad and unsupported allegations about Libor is a bid to delay payment and divert attention from its unpaid debts, which we will continue to vigorously pursue."
Deutsche Bank has said it is "cooperating in the various regulatory investigations" into allegations of rigging Libor and was taking its own action after finding "certain employees, acting on their own initiative, engaged in conduct that falls short of the Bank's standards."
