A Dublin-based mortgage lending company has taken legal proceedings against Credit Suisse's London branch, alleging breach of an agreement to provide funding for its activities.

The action by Fresh Mortgages Ltd against Credit Suisse, London branch (CS), was entered into the list of the Commercial Court by Mr Justice Peter Kelly yesterday. Fresh, Stradbrook Road, Blackrock, was incorporated in June 2006 and is involved in originating and selling mortgage loans secured on residential properties. The group focuses on lending to business people who may have problems securing loans because of a lack of PAYE history, despite having considerable assets.

Fresh claims it was involved in discussions with potential providers, including CS, on funding for its activities earlier this year. During those discussions, it claims that CS, with a view to inducing Fresh to enter into an agreement with its London branch, indicated it was prepared to enter into an agreement with Fresh under which it would be the exclusive provider of funding for Fresh's mortgage lending and would provide that funding for sufficient time to permit Fresh to become a substantial and sustainable business.

Fresh claims that it was agreed that CS and Fresh would operate as joint venture partners and that CS would provide funding for up to five years, at least until Fresh had originated and sold loans totalling €850 million.

Fresh claims on May 11th it entered into a mortgage origination and sale agreement with CS and Mint Funding Ltd, a Credit Suisse company, as parties, and Statefirst (Ireland) Ltd as guarantor.

Following execution of the agreement, Fresh began business operations. By last month, it had 23 direct employees, premises in Blackrock and had written some €9.1 million in business. It claims CS was aware of Fresh's plans and expectations and knew that Fresh was reliant on the funding. However, CS had on November 16th purported to terminate the agreement on grounds including that events had occurred which would affect its ability to obtain its anticipated economic benefits from the mortgage origination and sale agreement.

Fresh claims no such events had occurred and that the purported termination was invalid. It also says that circumstances arising from changes in underlying capital markets were governed by a clause which permitted termination of that agreement only under certain conditions.