The e-mail was disclosed in court documents on the first day of an appeal hearing in London where Indian property firm Unitech Ltd. is seeking to invalidate an interest-rate swap and loans with Deutsche Bank because of alleged rigging of the London interbank offered rate. The case is being heard with a similar case Guardian Care Homes filed against Barclays Plc.

“No one likes to know he got screwed,” Sanjay Agarwal, Deutsche Bank’s Mumbai-based head of Indian corporate finance, said in a 2007 e-mail referring to the swap deal that was cited in Unitech’s court documents.

Unitech and Guardian say they wouldn’t have signed the swap deals with the banks if they had known about Libor-related misconduct, which became a global scandal when London-based Barclays was fined by U.K. and U.S. regulators last year. Global probes into banks’ attempts to manipulate the benchmark for profit have led to fines and settlements totaling about $2.6 billion for Barclays, Royal Bank of Scotland Group Plc, UBS AG and ICAP Plc.

The e-mails from Deutsche Bank, Germany’s largest lender, also show employees talking about Unitech’s understanding of the contracts. The Indian company was “outrightly ‘uneducated,’” according to another 2007 e-mail by a Deutsche Bank employee. “The client does whatever we tell him to,” another Deutsche Bank employee said.

Out of Context

Kathryn Hanes, a spokeswoman for Frankfurt-based Deutsche Bank, said the e-mails were “irrelevant” to the hearing.

“The communications cited by the defendant have been taken out of context, are irrelevant to the appeals court hearing, and are another attempt to divert attention from its unpaid debt and the recent High Court ruling that we, along with the other lenders, are entitled to have an outstanding loan repaid,” Hanes said in an e-mail.

Agarwal didn’t respond to an e-mail seeking comment.

Unitech hasn’t repaid a $150 million loan to a group of lenders and owes $11 million for the swap, Deutsche Bank said in the case last year.

The appeals hearing will decide whether companies can argue that Libor-fixing means their contracts aren’t valid, or whether they must prove a loss and seek damages.

Fish Cafes

Judge Jeremy Cooke ruled in February Unitech couldn’t seek to rescind the swap. The judge “was wrong to refuse us,” Unitech’s lawyer, John Brisby, told the court today. He said Deutsche Bank was involved in Libor-fixing and the case would depend on facts that could only emerge at a full trial.

Thousands of businesses, from fried fish cafes to dentists and Italian regional governments, have sued banks over interest- rate swaps that were supposed to protect against rising rates, and that turned out to be costly.

The Financial Conduct Authority reached an agreement in February for lenders including RBS, Barclays and HSBC Holdings Plc to review deals and compensate customers after it found “serious failings” in the sale of the products to small businesses.