| LONDON, March 5
LONDON, March 5 Commerzbank struck an
upbeat tone at its appeal on Tuesday against a court order to
pay 104 London-based bankers 52 million euros ($68 million) in
At the start of three-day Court of Appeal hearing, Germany's
second-largest lender said it was confident of overturning last
May's High Court ruling that it breached its legal duties by
failing to honour promised payouts.
"The bank will argue that the correct interpretation of the
relevant law means that there was never a binding contractual
agreement," a spokesman said.
The three-year legal battle shines a light on a bygone era
before political and public scorn became focused on fat banker
bonuses, blamed for encouraging a culture of risk that helped
trigger the financial crisis and economic crisis.
Commerzbank argues it acted responsibly and reasonably when
it slashed discretionary bonuses by 90 percent as the credit
crunch sent losses surging in 2008 and put the future of its now
integrated investment banking arm, Dresdner Kleinwort, at risk.
The bankers, whose claims range from around 15,000 euros to
2.6 million euros, argue that Commerzbank reneged on contractual
promises and that heavy losses at Dresdner Kleinwort had been
well known when their bosses made and repeated bonus pledges.
The dispute hinges on whether these promises are binding and
enforceable, whether Commerzbank was entitled to make 2008
awards dependent on bank performance after buying Dresdner in
2009 -- and whether it could subsequently slash some bonuses
Commerzbank was forced to take its case to the Court of
Appeal directly after High Court Judge Robert Owen refused to
allow the appeal last May, saying the bank had acted in a
"highly reprehensible" manner.
He further enraged the bank by suggesting it had sacrificed
the contractual rights of its employees "on the altar of public
perception" after being forced to seek a government bailout
following the Dresdner deal.
The Court of Appeal is expected to publish its judgment in
around eight weeks.
Commerzbank's Chief Executive Martin Blessing said last
month he would waive his 700,000 euro bonus for 2012 as the
slowing economy, stiff competition, a raft of new regulations
and stringent cost cuts eat into earnings.