Westdeutsche Landesbank Girozentrale v Islington London Borough Council - Court of Appeal (Dillon, Leggatt and Kennedy LJJ) - 16 December 1993

Whether bank entitled to recover balance outstanding on ultra vires interest rate swap agreements with local authority - Whether compound interest to be awarded

The present action arose out of an interest rate swap agreement made on 16 June 1987 between Islington London Borough Council (“the Council”) and the Westdeutsche Landesbank (“the bank”). Under the agreement, the bank had made a total payment to the Council of £2,500,000 and the Council had made total payments to the bank of £1,354,474.07 The balance owed by the Council to the bank was £1,145,525.93.