The beneficiary sought to claim under a letter of credit. The bank resisted saying that the conditions in a letter accompanying the letter of credit had not been satisfied.
Held: The conditions set out in the letter of credit were satisfied and the letter of credit had been properly drawn down. The principal of autonomy applied to prevent a bank refusing a draw down under the letter for any breach as between itself and the beneficiary, but there is an exception where the beneficiary had made a specific agreement not to draw down until certain conditions were met. As to the side letter: ‘ . . . [Counsel for FAI] submitted that FAI had never agreed that Sirius should pay a claim. [Counsel for Sirius] says that FAI in effect did so by clause 1 of the Tomlin schedule. By that clause FAI acknowledged an indebtedness of US$22.5m to Sirius. Everyone knew that there was a back-to-back arrangement in place, that the US$22.5m would inure for Agnew’s benefit. So in substance, submitted [counsel for Sirius], FAI agreed to payment by Sirius. They knew exactly who was really getting the benefit of clause 1 of the settlement agreement. I think that is right. No one ever thought that the right to the US$22.5m was really that of Sirius. The commercial substance is that FAI had agreed that Sirius should pay a claim.’
Judges:
Jacob J
Citations:
Times 26-Aug-2002, Gazette 10-Oct-2002, [2002] EWHC 1611 (Ch);, [2003] 1 WLR 87
Jurisdiction:
England and Wales
Cited by:
Appeal from – Sirius International Insurance Company v FAI General Insurance Ltd and others CA 4-Apr-2003
An insurance and banking dispute with regard to the benefit of a letter of credit had been settled between the companies, but the parties then disagreed as to the meaning of the settlement.
Held: Counsel for Sirius ‘accepted that the second . .
At first instance – Sirius International Insurance Company (Publ) v FAI General Insurance Limited and others HL 2-Dec-2004
The appellant had taken certain insurance risks on behalf of the respondents, subject to banking indemnities. Disputes arose and were settled under a Tomlin order, which was now itself subject to challenge.
Held: The appeal was allowed. The . .
Lists of cited by and citing cases may be incomplete.
Banking
Updated: 28 June 2022; Ref: scu.174736