Case No: 2010 FOLIO 371
Neutral Citation Number: [2010] EWHC 2643 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 22/10/2010

Before :

MR JUSTICE BLAIR
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Between :

	GESNER INVESTMENTS LIMITED
(a company incorporated in the British Virgin Islands)	Claimant	
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	BOMBARDIER INC
(a company incorporated in Canada)	Defendant	

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Mr Stephen Phillips QC and Mr William Edwards (instructed by Allen & Overy) for the Claimant
Mr Pushpinder Saini QC and Mr Fred Hobson (instructed by Jones Day) for the Defendant

Hearing date: 15 October 2010
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Judgment
Mr Justice Blair: 
1.	By the present application, the Claimant, Gesner Investments Ltd, a company incorporated in the BVI, seeks summary judgment against the Defendant, Bombardier Inc, a company incorporated in Canada.  There is no dispute as to fact, it being common ground that the issues turn solely on a short point of construction of the applicable contractual terms.  The background is as follows.  By an Aircraft Purchase Agreement (“APA”) dated 19 October 2006 to which Gesner (as buyer) became a party by subsequent novation, Bombardier (as seller) agreed to manufacture and sell a Bombardier Global Express XRS model BD-700-1A10 aircraft for a price of US$44m payable by instalments. Article 2.2 of the APA, as amended, provided that the aircraft would be ready for inspection within 30 days of 15 September 2009, that is by 15 October 2009.  It is the fact that the aircraft was not ready for delivery by that date that has given rise to the present dispute, which turns entirely on Gesner’s entitlement under the contractual provisions to terminate.  Gesner claims approximately US$8.5m being 10% of the purchase price withheld by Bombadier under a liquidated damages clause, together with interest which Gesner says is due on the instalments of the price which were (or should have been) returned to it on termination.  Although the application is for summary judgment, the parties have sensibly made it clear that there being no extraneous evidence that could affect the construction question, the outcome will effectively be determinative of the dispute between them. 
The contractual provisions
2.	The delivery and inspection provisions of the agreement are contained in article 5.  Bombardier agreed to give Gesner reasonable notice of the date on which the aircraft would be ready “for Buyer’s inspection and acceptance” (the “Readiness Date”).  Gesner agreed to accept delivery of the aircraft within 10 days of that date unless any defects or discrepancies were revealed. Gesner would be deemed to have accepted the aircraft on the 10th day unless it identified defects or discrepancies. The time of acceptance was defined as “the Delivery Time”. Upon Delivery Time, the balance of the purchase price became due under article 2.1.  
3.	Bombardier did not make the aircraft ready for Gesner’s inspection within the 30 day period expiring on 15 October 2009.  This brought into play article 8 of the APA, which makes provision for delay in delivery.  Articles 8.1, 8.2 and 8.3 provide for what is described as “Excusable Delay”, meaning force majeure, acts of God, and the like.  It is common ground that the present case is not one of Excusable Delay.
4.	“Non-Excusable Delay” is defined by article 8.4 of the APA as “any delay other than: (i) an Excusable Delay, (ii) an event described in Article 7.1, or (iii) a delay caused by Buyer”.  In the present case, there is no dispute that the delay that occurred in relation to the delivery of the Aircraft was Non-Excusable Delay.  Article 8.4 provides in such cases for liquidated damages payable by Bombardier over 90 days at a daily rate which increases every 30 days up to a maximum total amount of USD $675,000 as follows:
“In the event the Aircraft is not ready for Buyer’s inspection and acceptance within the time period stated in Article 2.2, for reasons of “Non-Excusable Delay” … then Seller shall pay to Buyer as a credit against the balance of the Purchase Price due pursuant to Article 2.1 (iv) as liquidated damages, but not as a penalty, an amount of (i) US $6,500 dollars per day for the first 30 days of Non-Excusable Delay; (ii) US $7,500 dollars per day from the 31st to the 60th days of Non-Excusable Delay; and (iii) US $8,500 dollars per day from the 61st to the 90th day of Non-Excusable Delay, from the start of the Non-Excusable Delay until the earlier of (a) the date on which the Aircraft is presented to Buyer for final inspection and acceptance or (b) the elapse of 90 days of Non-Excusable Delay (the “LD Period”) up to a maximum total amount of USD $675,000. …”
5.	In the part that is particularly relevant on this application, article 8.4 goes on to provide for termination as follows:
“… During the period that such liquidated damages are accruing, Buyer shall not have the right to terminate this Agreement pursuant to Article 9. In the event the Aircraft has not been offered for Buyer’s inspection and acceptance after 90 days of Non-Excusable Delay, then Buyer shall have the right to terminate this Agreement pursuant to Article 9. In the event Buyer terminates this Agreement, then no liquidated damages shall be credited to or owed to Buyer. This Article is provided for the sole benefit of Buyer and is not assignable or transferable and constitutes Buyer’s sole right, remedy and recourse, and Seller’s sole obligation and liability to Buyer for a Non-Excusable Delay. ….”
Until the expiration of the 90 day liquidated damages period therefore, the buyer does not have the right to terminate the agreement.  That arises after the 90 days, and the nub of the dispute between the parties is what is meant by the words used here in clause 8.4 referring to the buyer’s “right to terminate this Agreement pursuant to Article 9”.
6.	Article 9 deals with “Termination”.  Article 9.1 provides that either party may terminate the agreement before Delivery Time by written notice of termination to the other party upon the occurrence of events such as bankruptcy.  That is not in issue in this case.  Articles 9.1 and 9.2 go on to deal with termination by the buyer as follows:
“9.2.	Buyer may terminate this Agreement before Delivery Time if, subject to Article 8.4, Seller is in default or breach of any material term or condition of this Agreement and does not act to cure such default or breach within 10 days after receipt of written notice from Buyer specifying such default or breach and does not continue thereafter to diligently correct or cure the alleged default or breach.
9.3	Upon termination of this Agreement by Buyer pursuant to and in accordance with this Article 9, all amounts received by Seller on account of the Purchase Price shall, subject to Article 12, promptly be reimbursed to Buyer together with interest at the rate stipulated in Article 6.2 (the LIBOR component of such rate to be as published on the first day of Excusable Delay), calculated on all payments made by Buyer to Seller from the date each payment was received by Seller until reimbursed to Buyer. Such reimbursement shall constitute Buyer's sole right, remedy and recourse against Seller and Seller's sole obligation and liability to Buyer.”
7.	Article 9.4 deals with termination by the seller in circumstances that are not relevant.  Article 9.5 provides that:
“9.5	… if Buyer fails to make any of the payments provided for in Article 2 on or before the stipulated date or within 3 calendar days following Buyer's receipt of written notification from Seller that such payment has not been made, all rights which Buyer may have or may have had in or to this Agreement or the Aircraft shall be extinguished, and except for termination in accordance with Article 9.4, Seller shall be entitled to retain an amount equivalent to 10% of the Purchase Price, as liquidated damages for default and the parties shall thereafter be released from all further obligations to each other. Buyer agrees that such liquidated damages do not constitute a penalty and are a reasonable and agreed amount of the anticipated or actual harm or damages to be suffered by Seller as a result of or in connection with Buyer's default. All other amounts received by Seller on account of the Purchase Price shall, subject to Article 12, be promptly returned to Buyer.”
8.	Thus, if the buyer terminates the agreement, all amounts received by the seller on account of the purchase price have to be promptly reimbursed to the buyer together with interest.  This is the provision the non-performance of which Gesner relies on.  There is a subsidiary issue between the parties in this case as to the rate of interest payable in such circumstances.  On the other hand, if the buyer fails to make any of the payments when due, its rights under the agreement are extinguished, and the seller is entitled to retain an amount equivalent to 10% of the purchase price, as liquidated damages for default.  All other amounts received by the seller on account of the purchase price are to be promptly returned to the buyer.  This is the provision the performance of which Bombadier relies on.
The dispute as to termination
9.	The 90 day period provided for under article 8.4 expired on 14 January 2010, that is to say 90 days after 15 October 2009.  On 11 January 2010, in other words shortly before expiry, Bombardier served “Notice of Aircraft Readiness Date” on Gesner, saying that the aircraft “is scheduled for your final inspection on January 18, 2010. On this date the Aircraft will be presented to you and you will be entitled to perform the inspection and final acceptance of the aircraft in accordance with the terms of the Agreement”.
10.	By “Notice of Termination” dated 14 January 2010, Gesner gave notice of termination of the APA on the basis that “The Aircraft was not made available for inspection on or before 14 January 2010.  This constitutes a breach of the Agreement and in accordance with its rights under clause 8 and the provisions of clause 9 of the Agreement, Gesner hereby terminates the Agreement and demands reimbursement of all amounts received in respect of the purchase price together with interest at the stipulated rate”.
11.	Bombardier wrote to Gesner on 28 January 2010 giving notice that Gesner was deemed to have accepted the aircraft as of that date in accordance with article 5.2 of the APA.  It enclosed an invoice for the final balance due at Delivery Time (giving credit for USD $675,000, that is, the amount payable by way of liquidated damages for delay under article 8.4), and advised that a failure to pay that sum within 3 calendar days would result in the automatic termination of the APA pursuant to article 9.5 without further notice.
12.	On 2 February 2010, Gesner’s lawyers wrote to the effect that Gesner had terminated the agreement on 14 January 2010, and demanding the repayment of all the instalments of the purchase price received by Bombardier together with contractually stipulated interest.
13.	On 5 February 2010, Bombardier responded to the effect that in accordance with article 9.5 of the APA, Gesner’s rights under the agreement terminated on 31 January 2010, and that Bombardier was entitled to retain 10% of the purchase price of US$44 million, i.e. US$4.4 million, as liquidated damages. Bombardier stated that it would return the balance of $29.6 million paid by Gesner within 10 days, and did so on or around 12 February 2010. 
14.	On 23 March 2010, Gesner issued these proceedings claiming (in substance) the reimbursement of the US$4.4 million together with interest under article 9.3. Bombardier filed a defence is to the effect that it had discharged its obligations under the APA and has no liability to Gesner.  The summary judgment application was issued on 24 June 2010.
The first issue: was Gesner entitled to terminate the APA as at 14 January 2010?
15.	As just explained, by letter of 14 January 2010 Gesner sent notice terminating the agreement. The question is whether it was entitled to terminate at this time.  It maintains that the effect of article 8.4 is that once the 90 days have expired, Gesner is entitled to terminate if the aircraft is not ready for inspection. Bombardier contends that it was first required to give notice and allow for a 10 day cure period in accordance with article 9.2 of the APA.  This, the parties agree, is a point of construction of the language used in the agreement, there being nothing that either relies in the factual matrix.  Nor is there any dispute as to the principles governing the construction of contracts, which were summarised recently by Aikens LJ in Ledyaev v Vallen [2009] EWCA Civ 156 at [66].
The parties’ contentions
16.	Gesner’s arguments are as follows.  Its construction yields, it submits, a commercially sensible result, whereas Bombardier’s yields a result which makes no commercial sense and cannot have been the intention of the parties (Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, at 771 per Lord Steyn). It relies on the following reasons. First, the key words of article 8.4 are that, “In the event the Aircraft has not been offered for Buyer’s inspection and acceptance after 90 days of Non-Excusable Delay, then Buyer shall have the right to terminate this Agreement …”. Nothing, it is said, could be plainer than that; the essence of the bargain is that immediately the 90 days are up, Gesner is entitled to terminate.  Bombadier hangs its argument on the three words that follow: “pursuant to Article 9.”   It is notable, however, that the words are not “pursuant to Article 9.2.”—the reference is to the whole of article 9. Had the parties intended that Gesner would have to go through the rigmarole of the article 9.2 procedure, it is submitted, they would have said so.  There would be no question of Bombardier’s construction arising if the words “pursuant to clause 9” were not there. It would be strange and uncommercial result, it is contended, if the inclusion of those words had such a dramatic effect, which would be to undermine the plain effect of the right to terminate which had just been specified in the preceding words (“[Gesner] shall have the right to terminate this Agreement”).  The correct analysis, Gesner argues, is that the reference to article 9 is simply to make clear that the article 9 consequences apply just as much on a termination under article 8.4 as they do under article 9 itself. The words “pursuant to article 9” are being used here as shorthand for “and the consequences provided by Article 9 shall follow on such termination” and no more. 
17.	Gesner further submits as follows.  Article 8.4 is a mechanism plainly intended to compensate it for late delivery of the aircraft. There is no mechanism for compensation beyond those 90 days. If the true intention of the parties was that Bombardier could delay inspection beyond 90 days in situations where there was no Excusable Delay, one would expect the APA to make some provision for compensation to Gesner for that period. The fact that there is no such provision is the clearest indicator that the intention was that after the expiry of the 90 days, Gesner would immediately be entitled to terminate.  Further, it is said that the construction Bombardier contends for yields very uncertain results, because it would afford it the uncertain period permissible under article 9.2 before Gesner is entitled to terminate. In relation to such a fundamental matter as the delivery date, the parties cannot have intended such an uncertain provision to apply.
18.	It is commercially unreal, Gesner submits, to think that the parties intended Bombardier to have not merely (1) the 30 days provided by article 2.2 and (2) the 90 days provided by article 8.4 but also (3) some further period under article 9.2 before Gesner is entitled to terminate. It is far more likely (because commercially realistic) that the bargain is that the end of the 90 days represents a “long stop” beyond which Bombardier is not entitled to delay inspection.  Further, the period to which Bombardier is entitled under article 9.2 on Bombardier’s construction is of unclear length and also (depending on the precise facts) potentially of numerous lengths. That is to be compared with the definite periods of 30 and 90 days provided by articles 2.2 and 8.4 of the APA. It is inherently unlikely that the parties, having fixed such definite periods for the performance by Bombardier of the central obligation of delivery of the aircraft in those provisions of the APA, should then have gone on to provide for Bombardier to have some further period of time of variable and uncertain length.
19.	Bombardier argues that Gesner could terminate in that event only by exercising its right in accordance with the procedure set out at article 9.2.  Therefore, in the event that Bombardier had not made the aircraft ready for inspection and acceptance within 30 days of the date specified at article 2.2 article 8.4 provided a 90 day period during which Gesner was precluded from exercising its termination rights. This was therefore a suspensory period. Gesner received liquidated damages up to $675,000 to compensate for the delay during this period.  If, on the expiry of this 90 day period, the aircraft was not ready for inspection and acceptance article 8.4 then revived Gesner’s right to exercise its termination rights under article 9. This, Bombadier submits, is clear from the wording of article 8.4. Twice it refers to the termination procedure under article 9.  It is therefore article 9 to which one must turn in order to find the relevant termination right.
20.	Article 9 gives Gesner two separate termination rights, the first being that exercisable upon the occurrence of an event specified at article 9.1 insolvency etc, which is inapplicable).  The relevant termination right is under article 9.2.  The article 9.2 procedure (i) required Gesner to provide a written notice specifying Bombardier’s default or breach of a material term or condition; and (ii) allowed Gesner to terminate only in the event that Bombardier did not act to cure or correct the default or breach within 10 days after receipt of Gesner’s notice.  The contractual scheme, Bombardier submits, is straightforward to understand.  It had two opportunities to resolve any delay before the delay could give rise to a right of immediate termination. First, there was the 90 day period under article 8.4. Second, there was the general 10 day cure period under article 9.2. It was only once both such periods had elapsed that Gesner would be entitled to terminate.
21.	Bombadier argues that had it been the parties’ intention for the expiry of the 90 day period to give rise to a right of immediate termination, the parties were well aware how to go about providing for such a right. That is what they chose to do at article 8.2 in respect of Excusable Delay. Article 8.2 entitled Gesner to terminate the APA upon written notice in the event that delivery was delayed by reason of Excusable Delay for more than 3 months. But article 8.4 makes no equivalent provision. It refers instead (on two separate occasions) to the entitlement under article 9. The parties are therefore to be taken to have intended different consequences to apply to articles 8.2 and 8.4.
22.	Article 9.2 cross-refers to article 8.4 by providing that the right to terminate under article 9.2 is “subject to Article 8.4”. This ties in, Bombadier says, with article 8.4 by providing that the right to terminate under article 9.2 is subject to article 8.4 in the sense of being suspended during the 90 day LD Period. Once article 8.4 revives the right to terminate, that right is to be exercised as provided for under article 9.2.   Bombadier draws attention to the fact that the basis on which Gesner quantifies its pleaded claim is article 9.3.  Article 9.3 applies to termination by Gesner “pursuant to and in accordance with this Article 9…”.  This it is said envisages that the consequences provided for at article 9.3 arise in the event that termination is effected “in accordance with” article 9. The effect of Gesner’s position is to both approbate and reprobate article 9. It wishes to take the benefit of article 9.3, but to glide past the procedure set out at article 9.2.
23.	Gesner’s argument, Bombadier contends, would involve a manipulation of article 8.4 so as to read into it a right of immediate termination upon expiry of the 90 day period, and so as to cross out the express wording that the right to terminate is pursuant to article 9.  Gesner’s commercial sense argument is not what the parties made provision for. The parties made provision for a contractual mechanism which required not one but two lines to be crossed before the delay was such as to trigger a right of immediate termination. That is a perfectly logical contractual arrangement to have entered into. This is not one of those cases where questions of commerciality loom large or where the court should be ready to find that something has gone wrong with the language. 
Discussion and conclusion
24.	The point is, both parties emphasise, a short point of construction, but I agree with Mr Phillips QC that it is not a straightforward one.  The starting place is the language of clause 8.4, by which, “In the event the Aircraft has not been offered for Buyer’s inspection and acceptance after 90 days of Non-Excusable Delay, then Buyer shall have the right to terminate this Agreement pursuant to Article 9” (I have added underlining).  The point turns on what is meant by “pursuant to Article 9”.  Gesner says that the words are being used here as shorthand for “and the consequences provided by article 9 shall follow on such termination” and no more.  There is force in the point it makes that there is no mechanism for compensation beyond the 90 days.  It further relies on the fact that article 9.2 provides that the buyer’s right to terminate only arises if the seller does not act to cure the breach within 10 days after notice and does not “continue thereafter to diligently correct or cure the alleged default or breach”.  This, Gesner submitted, is potentially a period of unclear length and also (depending on the precise facts) potentially of numerous lengths. That is to be compared with the definite periods of 30 and 90 days which apply if Gesner’s construction is the correct one.  In response to lack of clarity argument, Bombadier submits that delay is a “once and for all” breach, and whilst it had the ten days after receipt of the buyer’s notice in which to perform, there was no question of it having any further period in which to “continue … to diligently correct or cure the alleged default or breach”.  
25.	My conclusions are as follows. The significance of the phrase “right to terminate this Agreement pursuant to Article 9” is, as Bombadier says, emphasised by the fact that it is used immediately before in the language of article 8.4 to cover the position during the 90 day period.  Mr Phillips QC said in oral argument that the exclusion of the right of termination during this period by reference to article 9 cannot have the effect of excluding the right of termination given to either party in the case of the other’s insolvency, etc.  This may be right, but it does not appear to me to detract from the force of the argument that when the provisions are read as a whole, in terms, what revived at the end of the 90 day period was Gesner’s right to exercise its termination rights under article 9.
26.	The significance of the reference to article 9 gains further force when one appreciates, as Bombadier points out, that it is absent in the case of termination under the Excusable Delay provisions.  In such case, article 8.2 entitled Gesner to terminate the APA upon written notice in the event that delivery was delayed by reason of Excusable Delay for more than 3 months.  There is therefore force in the submission that had the parties intended the right of termination to arise without more after 90 days, they could have adopted the same approach, but instead chose to include a reference to termination pursuant to article 9.
27.	It is plain (and not in dispute) that the words “pursuant to article 9” must be given meaning, and the question really boils down to how extensive their scope should be.  Gesner submits that they are being used here as shorthand for “and the consequences provided by article 9 shall follow on such termination” and no more.  The particular consequences Gesner invokes in its claim (see paragraph 13 of the Particulars of Claim) are those provided for in article 9.3, by which following termination by the buyer, the seller must reimburse the buyer with the money it has paid (in other words, such instalments of the purchase price of the aircraft which the buyer has paid) together with interest.  The claim for interest alone is a substantial one in this case (some US$4m).    However, as Bombadier says, what article 9.3 in fact provides is that, “Upon termination of this Agreement by Buyer pursuant to and in accordance with this Article 9, all amounts received by Seller on account of the Purchase Price shall … promptly be reimbursed to Buyer together with interest”.  It is therefore termination pursuant to and in accordance with article 9 that gives rise to the right to reimbursement plus interest.  I consider that Bombadier is right to submit that this tends to undermine Gesner’s case on construction. 
28.	I prefer Bombadier’s submissions on the construction question to those of Gesner.  I reject the contention that the effect of article 8.4 is that after the 90 day period has expired, the buyer may terminate without more.  In my view, the words “… then Buyer shall have the right to terminate this Agreement pursuant to Article 9” mean that Gesner’s right to terminate arose pursuant to article 9, which entailed the exercise of its right in accordance with the procedure set out in article 9.2.  It is not suggested that there is any other applicable procedure in article 9.  I see no reason to adopt a construction that encompasses the reimbursement provisions in article 9.3 alone.  It is true that this construction produces the result that there is potentially a period during which liquidated damages are not payable, whereas Gesner’s construction avoids that outcome.  But I do not think that it thereby flouts business common sense.  In a finely balanced contract for the construction and sale of an aircraft, it is (in my judgment) what the parties agreed.  I agree with Mr Pushpinder Saini QC for Bombadier that where the language used by the parties is relatively clear, the court should be cautious of being led into an inquiry as to the commerciality of the transaction.  That being my conclusion, the application must be dismissed.   
The second issue: interest
29.	I am grateful for a succinct note on this subject provided by junior counsel for the parties after the hearing.  The claim for interest only arises if Gesner succeeds on the first issue, which it has not, but I should deal with it anyway.  If (contrary to the above conclusion) Gesner was entitled to terminate and did validly terminate on 14 January 2010, the instalments of the purchase price already paid (some US$34 million) were repayable to it by Bombardier with interest as provided in Article 9.3 of the APA by which:
“Upon termination of this Agreement by Buyer pursuant to and in accordance with this Article 9, all amounts received by Seller on account of the Purchase Price shall, subject to Article 12, promptly be reimbursed to Buyer together with interest at the rate stipulated in Article 6.2 (the LIBOR component of such rate to be as published on the first day of Excusable Delay), calculated on all payments made by Buyer to Seller from the date each payment was received by Seller until reimbursed to Buyer. …”
30.	Article 6.2 provides that the buyer “… shall pay interest on late payments at the rate equal to the one year LIBOR rate plus 2% as published in the ‘Money Rates’ section of the Wall Street Journal, commencing on the date the late payment was first due”.
31.	The issue between the parties is whether the interest rate payable under article 9.3 is fixed or variable. The rival contentions are:
(1)	That the rate is the 12-month LIBOR rate as varied from time to time plus 2% (Gesner);
(2)	That the rate is fixed at the 12-month LIBOR rate on the first day of Non-Excusable Delay (16 October 2010) plus 2%, namely 3.25% (Bombardier).
32.	I am told that it makes a considerable difference to the figures because when the first tranche of the purchase price was paid in October 2006, 12-month LIBOR was over 5% (by September 2010 it was under 1%). On 16 October 2010, as I have said, it was 3.25%.
33.	Bombadier pointed out in argument that there are provisions in the agreement that clearly fix interest as of a particular date.  However in my judgment, and in agreement with Gesner, article 6.2 (expressly applied in article 9.3) is not one of them.  The reference in article 6.2 to interest “commencing on the date the late payment was first due” simply fixes the date from which interest runs; it does not fix the rate as that prevailing on that date.  The question is as to the effect of the words in brackets in article 9.3, by which the “LIBOR component of such rate to be as published on the first day of Excusable Delay”.  Bombadier says that “this is a situation where something has gone awry with the language. As it reads, article 9.3 makes no sense since there is no period of Excusable Delay. Article 9.3 is instead concerned with Non-Excusable Delay and the reference therein to “Excusable Delay” should be construed as referring to “Non-Excusable Delay””.  Gesner says simply that the section in brackets in article 9.3 is of no application.
34.	Where there is clearly a mistake in the drafting of a contract, the court will not hesitate to correct it, at any rate where the correction is obvious.  But I do not consider this to be such a case.  Under article 6.2, late payments by the buyer attract interest at one year LIBOR plus 2% from the date the payment was due.  Likewise, where payments are to be reimbursed under article 9.3, they are to attract interest at the rate stipulated in article 6.2 calculated from the date each payment was received by the seller until reimbursed to the buyer.  I see no reason to read the provision as fixing the rate to that published on the first day of Non-Excusable Delay.  I agree with Gesner that the applicable rate is the one year LIBOR rate as varied from time to time.
Conclusion 
35.	The application is dismissed.  I am grateful to the parties for their assistance, and will hear them on any consequential matters arising,