STANDARD Life Aberdeen has claimed victory in a high-profile dispute over a £100 billion contract.
The Scottish investment firm said a tribunal has ruled that Lloyds Banking Group did not have the right to end the mammoth deal with the asset manager.
It said the tribunal found in its favour that Lloyds was not entitled to give notice to terminate the investment management agreements between the two firms.
Lloyds could now be stuck in the deal until it expires in 2022, or be forced to pay a significant sum in compensation to end it early.
Under the contract, Standard Life Aberdeen (SLA) would have been set to earn just under £400 million.
Keith Skeoch, chief executive of SLA, said: “Now that the arbitration panel has ruled in our favour, we will carefully consider our next steps, working constructively with LBG (Lloyds) to bring the matter to resolution.”
SLA added that, in the meantime, it will continue to manage the assets “in the best interests” of Lloyds customers.
Shares in SLA rose 3% after the announcement.
Last May, SLA launched its challenge against the lender’s decision to end the lucrative contract, one of the biggest in Europe.
Lloyds had claimed it was entitled to end the agreement due to competition issues with its Scottish Widows business, which were created by the merger of Aberdeen and Standard Life in 2017.
Lloyds dealt the blow to the asset management giant in February 2018, when it announced it was ending the contract – SLA’s largest single client – citing a material competitor clause.
The investment management deal was set to end after a 12-month notice period, as required under the original agreement between Aberdeen Asset Management and Lloyds.
A spokesman for Lloyds Bank-owned Scottish Widows said: “We are disappointed with the decision of the arbitration tribunal, and will look to discuss its outcome with Standard Life Aberdeen.”
He added: “We will discuss starting the process of an orderly transfer of assets to our new partners, BlackRock and Schroders.
“We will continue to work closely with Standard Life Aberdeen to ensure there is no disruption to performance or service.”
Lloyds had previously said the BlackRock deal to manage £30bn in assets would begin after the dispute had been resolved or when the contract expired.
Aberdeen took on the deal to manage the £109bn of assets when it bought Scottish Life Investment Partnership from Lloyds in 2014.
But Lloyds maintains there was a clause allowing it to end the mandate if Aberdeen merged with a competitor and believes this was triggered by the £11bn tie-up between Standard Life and Aberdeen Asset Management, creating the UK’s biggest fund manager.
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