(Bloomberg) -- An email detailing a senior Morgan Stanley banker’s “visceral reaction” to doing business with billionaire Mike Ashley is among a trove of internal documents set to be pored over during a London trial into the bank’s “unfair” $995 million margin call.

The retail tycoon’s Frasers Group Plc sued Morgan Stanley and Danish lender Saxo Bank after the banks issued the massive margin call over Ashley’s derivatives trade positions in Hugo Boss AG. While the claim against Saxo Bank was settled, according to the documents, Frasers has pursued Morgan Stanley ever since.

The “out of blue” margin call, which was described by the US bank’s own employees as “‘ridiculous’, ‘crazy’, ‘insane’,” was intended to force Frasers out from its open position in Hugo Boss, lawyers for the British retailer said in documents given to court before the Wednesday start of trial.

The margin call was unfair and “capricious,” Frasers’ lawyers argued in legal filings. Simon Smith, the then-head of EMEA investment banking at Morgan Stanley, had a “visceral reaction” to the prospect of doing business with Frasers, which fueled its stand on the margin call, lawyers for Frasers said in court filings citing emails.

“We just don’t like him,” another Morgan Stanley banker had said in a reference to Ashley, Frasers’ lawyers said in their arguments.

Frasers’ claim is divorced from legal, factual and market reality and the retailer didn’t suffer any loss when it transferred the trades away from the Morgan Stanley, the US bank’s lawyers said in the opening arguments given to the court. 

“Frasers has embarked on lawfare against the Morgan Stanley on an extraordinary scale,” the bank’s lawyers said. “Frasers advances wild allegations of bad faith and irrationality and asks the court boldly to go where it has never gone before.”

Smith didn’t take part in the decision on the margin call, which was based on stress tests and standard practice, lawyers for the US bank argue. Frasers’ trade positions posed significant potential risks to Morgan Stanley. 

There was no “irrationality” on the part of Smith or the bank when it decided not to enter into any contractual relationship with Frasers, they said.

Before the dispute arose Morgan Stanley was unwilling to offer corporate and advisory services to Frasers because of Ashley’s reputation, “deserved or otherwise,” for being litigious among other reasons, the bank’s lawyers said. 

Ashley’s retail firm was trading in options through Saxo Bank, which in turn executed them with the US bank, according to the filings. The margin call represented the risk that Hugo Boss’ share price might jump by more than 400% from the strike price and cause losses.

Ashley’s firm has sought about $50 million in damages.

“Frasers has never been a client of Morgan Stanley. This claim is contrived and without merit and we will defend it vigorously,” a spokesperson for Morgan Stanley said in an emailed statement. Lawyers for Frasers declined to comment.

(Updates with details from lawyers’ arguments throughout.)

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