The Paris Court of Appeal has just decided against Morgan Stanley and upheld the position of LVMH Group in the case between the bank and the company. In a judgment handed down on 12th January 2004, the Paris Tribunal de Commerce (trade dispute law court), to whom the matter had been referred by the LVMH Group, ruled that Morgan Stanley in both the UK and in the US were guilty of serious misconduct against LVMH. Furthermore, the court upheld that Morgan Stanley UK and US were guilty of causing both moral and material damage to LVMH. The decision of the Paris Court of Appeal handed down today confirms the judgment of the Tribunal de Commerce which ruled against Morgan Stanley. The bank must consequently repay the moral and material damage which it has caused to LVMH. The designated expert of the Tribunal de Commerce, Monsieur Didier Kling, will evaluate and decide upon the indemnity of these damages. The Court of Appeal noted in its decree of 30th June 2006 that: 1 – The French jurisdiction does extend to a legal dispute between LVMH and a British registered bank, Morgan Stanley. 2 – It is the first time that the Paris Court of Appeal has passed judgment on the conduct of a bank’s financial analysis. There had previously been no such precedent of this dimension or nature. 3 – The court ruled that this inaccuracy has caused two types of damage against LVMH: — moral damage — material damage LVMH will ask more than €100 million for the damages which are currently subject to investigation. The court’s investigation continues and will give rise to a definitive amount once completed. LVMH stresses the worthy intentions of its actions which will help ensure in the future that certain banks such as Morgan Stanley, already condemned in the United States for similar reasons, will reconsider their moral conduct when it comes to financial analysis.