Executive Summary
- The case concerns a financial dispute between NatWest Market NV and NatWest Markets PLC (NWM) and CMIS Nederland BV and CMIS Investments BV (CMIS) over indemnity payments under seven Deeds of Indemnity linked to swap transactions.
- The Deeds, granted between 2006-2008, relate to mortgage-backed securitisations (EMAC Issuers) involving Dutch and German mortgages.
- CMIS, a mortgage originator in the Netherlands and Germany, disputes liability and claims inability to pay due to its run-off status post-2010 Fortress Investment Group acquisition.
- The dispute centers on contractual interpretation, with no direct witness testimony on the original agreements’ commercial purpose.
Sanctions Highlights
- No sanctions implications identified in the case.
Emerging Risks
- CMIS’s financial incapacity to meet indemnity claims poses credit risk to NWM and related investors.
- The run-off status of CMIS and reliance on counter-indemnities from EMAC Issuers may delay or reduce recoveries.
- Potential legal uncertainty in interpreting complex securitisation and swap agreements could affect future claims in similar structured finance disputes.
Geopolitical Impact
- The case involves entities incorporated in the Netherlands and England, with mortgage assets in the Netherlands and Germany.
- CMIS’s mortgage origination in Germany and the Netherlands links this dispute to cross-border financial regulatory environments in the EU and UK.
- The Fortress Investment Group’s acquisition and subsequent operational changes reflect broader trends in European mortgage finance and investment fund ownership.
- The involvement of UK courts highlights London’s role as a key jurisdiction for resolving international securitisation disputes.
Economic Intelligence
- CMIS originated approximately €10 billion in Dutch mortgages from 2000-2008, indicating significant scale.
- The securitisations issued floating rate notes linked to EURIBOR, hedged by swaps with NWM to manage interest rate risk.
- The AAA ratings on the Notes depended on subordinated swap payments, transferring non-payment risk to CMIS under the Deeds.
- The financial structure’s complexity and CMIS’s current run-off status may impact investor confidence and liquidity in related securitisation markets.
Strategic Recommendations
- NWM should assess the enforceability of the Deeds carefully, considering CMIS’s financial position and potential counter-indemnities.
- Monitor developments in CMIS’s run-off administration and Fortress Investment Group’s management strategy for potential recovery opportunities.
- Evaluate the implications of cross-jurisdictional enforcement challenges between UK, Dutch, and German legal frameworks.
- Consider alternative dispute resolution mechanisms to expedite settlement and reduce litigation costs.
- Financial institutions involved in similar securitisations should review indemnity and swap structures to mitigate exposure to counterparties in run-off.
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**Source Notes:**
Sanctions Intelligence Digest | [https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/37.txt](https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/37.txt)