28.8 - Pledge GMSLA Provision
2018 Global Master Securities Lending Agreement (Pledge Version)
Clause 28.8 in full
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ISLA’s crack drafting squad™’s undisguised enmity to this harmless clause is undimmed in the 8 years between the 2010 GMSLA and the 2018 Pledge GMSLA. The equivalent clauses (27.10 and 28.9 respectively) are the same.
Black’s Law Dictionary has the following to say on counterparts:
- “Where an instrument of conveyance, as a lease, is executed in parts, that is, by having several copies or duplicates made and interchangeably executed, that which is executed by the grantor is usually called the “original,” and the rest are “counterparts;” although, where all the parties execute every part, this renders them all originals.”
Sometimes it is important that more than one copy of a document is recognised as an “original” — for tax purposes, for example, or where “the agreement” must be formally lodged with a land registry. But these cases, involving the conveyance of real estate, are rare — non-existent, indeed, when the field you are ploughing overflows with flowering ISDA Master Agreements, confidentiality agreements and so on. If yours does — and if you are still reading, I can only assume it does, or you are otherwise at some kind of low psychological ebb — a “counterparts” clause is as useful to you as a chocolate tea-pot.
Indeed: even for land lawyers, all it does is sort out which, of a scrum of identical documents signed by different people, is the “original”. This is doubtless important if you are registering leases in land registries, or whatever other grim minutiae land lawyers care about — we banking lawyers have our own grim minutiae to obsess about, so you should forgive us for not giving a tinker’s cuss about yours, die Landadler. 
ANYWAY — if your area of legal speciality doesn’t care which of your contracts is the “original” — and seeing as, Q.E.D., they’re identical, why should it? — a counterparts clause is a waste of trees. If the law decrees everyone has to sign the same physical bit of paper (and no legal proposition to our knowledge does, but let’s just say), a clause on that bit of paper saying that they don’t have to, is hardly going to help.
Mark it, nuncle: there is a chicken-and-egg problem here; a temporal paradox — and you know how the JC loves those. For if your contract could only be executed on several pieces of paper if the parties agreed that, then wouldn’t you need them all to sign an agreement, saying just that, on the same piece of paper? And since, to get that agreement, they will have to sign the same piece of paper, why don’t you just have done with it and have them all sign the same copy of the blessèd contract, while you are at it?
But was there ever a logical cul-de-sac so neat, so compelling, that it stopped a legal eagle insisting on stating it anyway, on pain of cratering the trade? There are little eaglets to feed, my friends.
Still, the fastidious forensic fellows in your legal department might fixate on the flimsiness of this filler. As we all know, multi-billion dollar litigation frequently hinges on the presence of absence of a counterparts clause. Here the concern is it this 2010 GMSLA version might not cover all the manifold varieties of way we sign and circulate legal agreements things in our modern life. I mean, faxes are a bit antediluvian aren’t they? No mention of telex, for the old fogies? What about email scans? electronic execution? Digital signatures?