Court declares ICICI Bank's option contracts with garment exporter as void

Garment maker Freelook Fashions claimed the bank issued hedging contracts in dollar and franc, when requuirement was for Pound and Euro

A Court in Coimbatore, Tamil Nadu has issued an order against ICICI Bank in a matter involving a set of option contracts submitted by a hosiery garments exporter.

Freelook Fashions, a company that manufactures and exports hosiery garments to United Kingdom and Ireland, had moved the Court to declare eight option contracts that it entered with the bank as void and unenforceable. These option contracts were issued to hedge the forex underlying risk the company is exposed to in its exports business.

An ICICI Bank spokesperson said, "We are in the process of filing an appeal against this order."

The company alleged that