In Hellenic Republic v Wilmington Trust (London) Limited [2026] EWHC 1049 (Comm), Mr Justice Bright has handed down judgment upholding the validity of Greece’s exercise of a purchase option over GDP-linked securities originally issued as part of its 2012 sovereign debt restructuring.
The securities were constituted under an English-law trust deed and were due to expire in 2042. They entitled holders to payments contingent on the performance of Greece’s GDP. Under Condition 6.1, Greece was entitled, after 1 January 2020, to purchase the securities from holders at a “Call Price” calculated by reference to the arithmetic mean of the “Market Price” over the 30 trading days preceding the purchase option notice. The “Market Price” was in turn defined by reference to quotes provided by the Greek secondary securities market (HDAT) (“limb 1”) or alternatively (in the event there were no HDAT quotes) by reference to quotes from a specified number of primary reference banks in Europe (“limb 2”). The wrinkle was that in 2019, the securities had ceased to be traded on HDAT, although bid and ask quotes continued to be provided to HDAT by primary dealers. The Call Price was calculated on the basis of those HDAT quotes.
Greece served a purchase option notice on 4 April 2025, specifying a Call Price of €252.28 per 1,000 securities and a settlement date of 14 May 2025. A number of investors disputed the validity of the notice and the calculation of the Call Price, claiming that Greece had wrongly used limb 1 and should instead have used limb 2 to calculate the Call Price. This prompted Greece to seek declaratory relief from the Commercial Court that it had validly exercised the purchase option and correctly calculated the Call Price.
Although the Trustee filed a defence and counterclaim pursuing the investors’ arguments, it ceased to play an active role in the proceedings thereafter and the activist investors chose not to become parties to the proceedings themselves, instead arguing through their solicitors in lengthy correspondence that Greece had not validly exercised the option and was not entitled to declaratory relief.
Bright J accepted Greece’s case on all the main issues and granted the declaratory relief that it sought, confirming the validity of the exercise of the purchase option and the correctness of the Call Price set out in the purchase option notice. The Court held that the Call Price mechanism stipulated a prescribed formula and that, once the relevant Trading Days and Market Prices had been identified by reference to the available HDAT quotes pursuant to limb 1, the calculation of the Call Price was essentially mechanical. In particular:
- The definition of “Trading Day” did not require HDAT to be open for trading in the securities.
- Greece had correctly proceeded on the basis that the bid and ask prices provided through HDAT fell within limb 1 of the definition of “Market Price”.
- Greece, acting through the Public Debt Management Agency, had correctly calculated the Market Price and the Call Price.
- The expert evidence did not support the contention that the Call Price was substantially lower than the market price at which the securities traded during the relevant period.
The judgment is significant for sovereign debt instruments and other financial contracts containing contractual price-determination mechanisms. The Court emphasised that parties who invest on the basis of particular conditions are bound by the contractual formula they have accepted, even if it is later said that the result differs from the “market price” in the ordinary sense or from actual traded prices.
The case is also of interest on the availability of declaratory relief (particularly in light of the inactive Trustee and non-party investor positions). Bright J concluded that declaratory relief was appropriate: there was a real and present dispute affecting Greece, the Trustee and investors, and declarations were the most effective way of resolving uncertainty as to the validity of the repurchase, potential further payments, Greece’s future financing projections and its reputation in the international capital markets.
Alain Choo-Choy KC and Sam O’Leary
acted for the Hellenic Republic, instructed by Cleary Gottlieb Steen & Hamilton LLP.