In re United Railways of the Havana v Regla Warehouses Ltd: CA 1960

There had been a financing transaction by way of a lease by a Pennsylvania corporation, as trustee for foreign bondholders, to an English company carrying on business in Cuba, of assets in Cuba. By a Cuban decree the assets were transferred to the Cuban government and the company was put into liquidation in England. The liquidators rejected a proof by the trustees for the payments due under the lease on the ground that the Cuban decree had transferred liability to the Cuban government. The court did not accept that the decree had this effect, but, for argument considered whether it would have been effective to discharge the company’s liability. This depended on whether one applied the lex situs of the debt (Cuba) or the proper law of the lease (Pennsylvania).
Held: The transaction was a statutory novation; the extinction of the liability of one debtor and its replacement by the liability of another. These two aspects of the transaction were not necessarily governed by the same law and that the question of whether the one debtor was discharged was governed by the proper law of the debt. The court rejected an analogy with the question of whether the benefit of a debt had been transferred to another person. ‘The contractual right to receive payment of a debt is an item of property, that is to say, a chose in action. It can be transferred by the creditor to a third party, but the validity of the transfer necessarily depends upon the lex situs, because the courts of the country where the debt is have jurisdiction over the title to it. Novation, on the other hand, does not involve the transfer of any property at all, for, as we have already pointed out, it comprises the annulment of one debt and the creation of another. Moreover, in novation a creditor may be vitally prejudiced, whereas it is immaterial to a debtor to whom he pays his debt provided that he gets a good discharge for it.’
Jenkins LJ
[1960] Ch 52
England and Wales
Cited by:
CitedWight, Pilling, Mackey v Eckhardt Marine GmbH PC 14-May-2003
(Cayman Islands) An international bank went into liquidation in the Cayman Islands, with liabilities in Bangladesh. A new bank was created in Bangladesh, and the applicants sought to make the new bank liable, and through them the liquidators.
Appeal fromIn re United Railways of Havana and Regla Warehouses Ltd; Tomkinson v First Pennsylvania Banking and Trust Co HL 1960
A sum was held to be due from that company in US dollars under a lease and another agreement which were both governed by the law of Pennsylvania.
Held: The sum provable in the liquidation of the company was to be converted at the rates of . .
CitedLesotho Highlands Development Authority v Impregilo Spa and others HL 30-Jun-2005
The House had to consider whether the arbitrator had acted in excess of his powers under s38, saying the arbitrator had misconstrued the contract. The arbitrator had made his award in different currencies.
Held: The question remained whether . .
CitedGomez and others v Vives CA 3-Oct-2008
The claimant appealed a finding that the court did not have jurisdiction over income payable to a trust governed by English law under which the claimant was beneficiary.
Held: The appeal failed in part. Because Article 5 is in derogation from . .
CitedGlobal Distressed Alpha Fund 1 Ltd Partnership v Pt Bakrie Investindo ComC 17-Feb-2011
Action on an instrument of guarantee.
Held: judgment for the Claimant in respect of the principal sum of US$2m. and such interest payments as were due. . .

These lists may be incomplete.
Updated: 11 March 2021; Ref: scu.183832