An arbitral tribunal established in respect of the dispute between Standard Life Aberdeen (‘SLA’) and Lloyds Banking Group/Scottish Widows (‘LBG’) has ruled in favour of SLA. In particular, the tribunal ruled that LBG was not entitled to give notice, on 14 February 2018, to terminate the investment management agreements in respect of assets managed by members of the SLA group. As of 31 December 2018, the value of the assets under management in respect of these arrangements was c. £100bn.
In 2014, Lloyds Banking Group granted a mandate to Aberdeen Asset Management (Aberdeen) to manage the assets when Aberdeen bought the Scottish Life Investment Partnership business from LBG. In 2017, Aberdeen merged with Standard Life to create SLA. LBG claimed that the merger triggered a clause that entitled it to terminate on the basis that the merged group was in material competition with LBG.
The tribunal rejected Lloyds Banking Group’s argument and held that its purported termination notice was invalid. Oxera’s Managing Partner, Dr Helen Jenkins, provided economics expert evidence that informed the tribunal about the extent to which Standard Life Aberdeen and Lloyds Banking Group were in competition at the time of the merger between Aberdeen and Standard Life.