Barclays sued by customer Blue Mango over interest rate swaps and ‘onerous’ fees

Barclays has emerged as the first UK lender to be sued for allegedly manipulating Isdafix, a key industry benchmark that is used to set the price of billions of pounds-worth of complex financial products.

News of the lawsuit, filed by property and restaurant group Blue Mango Investments, comes a fortnight after Barclays paid $115 million (£75 million) to settle an investigation by the US Commodities Futures Trading Commission into Isdafix.

This is used by traders to set the prices for interest rate swaps, which were designed to protect customers from rising interest rates but were widely mis-sold.

Blue Mango alleges that Barclays forced the company to put its subsidiaries into liquidation by imposing onerous charges on it.

These include a £20,000 bill for a “business review” by a third-party specialist. Despite the review finding that Barclays could have provided further funding, the bank allegedly refused to extend credit.

Blue Mango also claims it was mis-sold interests swaps — having been told that rates “would never drop to 1% … and would go up to 8%” — and that Barclays manipulated the benchmarks against which they were priced.

According to documents seen by the Evening Standard, these forced Blue Mango to close The George, a restaurant in Esher that had been tipped to get its first Michelin Star.

Last month, it emerged that Barclays is facing a separate High Court case after being accused of forcing Rhino Enterprises, a Leeds-based storage company, into administration.

The Libor-related case is one of the largest to be filed against Barclays or any other bank, with potential damages stretching to tens of millions of pounds.

Barclays said it would be “vigorously defending” the case.