Santander has lost its long-running legal battle with Andrea Orcel over its U-turn on appointing the Italian banker as its chief executive, and must pay him €68m in compensation, a Spanish court has ruled.
A Madrid court on Friday gave its ruling on the widely watched case, centred on the bank’s decision to withdraw an offer it made to Orcel in 2018.
The decision can be appealed in the next 20 days. But the court ruling is a significant blow for Ana Botín, executive chair of the Spanish lender, whose time heading the group has been marked by the decision first to hire Orcel, long a confidant of her family, and then to drop him, with the resulting legal fight.
The court ruled that both sides had signed what it deemed a “valid” contract, which had been broken in a “unilateral” and unjustified manner by the bank in violation of contract law and that therefore it was liable for compensation.
The payment it ordered from Santander includes €10m “for moral and reputational damages” to Orcel as well as contractual items such as salary and bonuses and interest from the date of filing the claim.
“I think it’s unfortunate that we are where we are but if people look only at the facts and what has emerged in court the conclusions are clear,” Orcel said in an interview with the Financial Times before he knew the court’s decision was coming on Friday.
A spokesperson for Santander said: “We disagree strongly with the ruling. The board of Santander is confident we will be successful on appeal as we were in the two criminal complaints already considered by the courts in relation to this matter.”
The tussle between one of Europe’s best-known investment bankers and Santander, his former client when he worked at UBS and Merrill Lynch, has been one of the highest-profile disputes in European banking.
Orcel alleged that the bank’s reversal of the decision it made in September 2018 constituted a breach of contract. In arguments ultimately rejected by the court, Santander claimed Orcel’s offer letter did not amount to a contract under Spanish law.
The case was delayed several times, including in March when the judge had to quarantine after being in contact with somebody with Covid-19. It also featured testimony from Axel Weber, chair of UBS, and from Botín.
Orcel became chief executive of UniCredit, Italy’s second-biggest lender, in April.
Orcel said that he hoped the decision would be the end of the matter. “I hope it ends and we can all turn the page. [Santander] is in the past and I am 150 per cent focused on UniCredit.”
UBS declined to comment.
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