By Clare Hutchison
LONDON (Reuters) - A legal battle between Deutsche Bank
In the case, one of the largest claims heard by the High Court in London, Sebastian Holdings alleges it ran up big losses after Deutsche Bank's prime brokerage department breached its contracts between 2006 and 2008.
Deutsche Bank said on Tuesday it would vigorously defend itself against damages claims the bank said were without merit.
The German bank began its own proceedings against Sebastian Holdings in London in 2009, alleging the investment company owed it $250 million for unpaid margin calls in 2008.
This case centers on highly-leveraged and complex currency trades undertaken for Sebastian Holdings, controlled by Norwegian businessman Vik.
In October 2008, when financial markets tumbled, these trades went bad. Sebastian Holdings had $1 billion of its equity wiped out and faced margin calls - a demand by a broker that an investor deposit more cash to cover losses on a trade - of $511 million from its broker Deutsche Bank.
Sebastian Holdings has alleged Deutsche Bank failed to inform it that the collateral needed to guarantee the high-risk trades would exceed a pre-arranged $35 million limit.
Deutsche Bank denied the allegations and maintains it had no obligation to monitor and control the transactions.
Deutsche Bank's case also relates to losses on currency trades entered into by Vik, who has made a large personal fortune through internet investments, luxury hotels and real estate development.
The Norwegian, who also owns a vineyard in Chile, is scheduled to give evidence in the case from June 12.
Vik was not immediately available for comment.
The trial is expected to last 12 weeks.
(Reporting by Clare Hutchison. Editing by Jane Merriman)