The parties disputed their contract arrangements. It was referred to an arbitration in London, but applying Iraqi law. The respondent failed to meet the award made against it, and the claimant sought to enforce the award here by means of third party debt orders. Issues arose as to who could take the benefit of the letters of credit.
Held: (Lord Mance DPSC and Lord Neuberger of Abbotsbury dissenting) The appeal was allowed. The defendant was, under the contract, and remained the beneficiary of the letters and was the only proper owner of the debts due from the French bank. The Central Bank of Iraq, having no beneficial interest in the contract had no say in the chosen means of execution.
The situs in law of this debt was London, being the legal residence of the debtor.
Judges:
Lord Neuberger, Lord Mance, Lord Clarke, Lord Sumption, Lord Hodge
Citations:
[2017] UKSC 64, UKSC 2015/0199, [2017] WLR(D) 701, [2018] AC 690, [2017] 3 WLR 1170
Links:
Bailii, Bailii Summary, SC, SC Summary, SC 20170321 am Video, SC Summary Video, SC 20170321 pm Video, SC 20170322 am Video, SC 20170322 pm Video, WLRD
Jurisdiction:
England and Wales
Citing:
At ComC (1) – Taurus Petroleum Ltd v State Oilmarketing Company ComC 18-Nov-2013
The parties referred their contract disputes to an arbitration in London which was to apply Iraqi law. As to enforcement of the award, the defendant denied that they were situated in London.
Held: The debts were situated in London rather than . .
At ComC (2) – Taurus Petroleum Led v State Oil Marketing Company of The Ministry of Oil, Republic of Iraq ComC 18-Nov-2013
. .
Appeal from – Taurus Petroleum Ltd v State Oil Company of The Ministry of Oil, Republic of Iraq CA 28-Jul-2015
The parties had contractual disputes as to letters of credit governed by Iraqi law. The arbitration was in London applying Iraqi law. They now disputed whether the Enforcement of arbitration award was as an award made in London. Each appealed . .
Cited – Societe Eram Shipping Company Limited and others v Hong Kong and Shanghai Banking Corp Ltd, Compagnie Internationale de Navigation HL 12-Jun-2003
The appeal concerned a final third party debt order (formerly a garnishee order). A judgment in France was registered here for enforcement. That jurisdiction was now challenged.
Held: A third party debt order is a proprietary remedy operating . .
Overruled – Power Curber International Ltd v The National Bank of Kuwait CA 1981
The advising bank on a letter of credit was situated in Florida. The place where the credit was payable was North Carolina, and the place where the issuing bank had its place of business was Kuwait.
Held: (Waterhouse J dissenting) The contract . .
Cited – HL Boulton Co v Banque Royale du Canada 1994
(Superior Court of Quebec) The defendant asked the court to decline jurisdiction under article 3135 of the Civil Code, which provides that even though a Quebec authority has jurisdiction to hear a dispute, it may exceptionally decline jurisdiction . .
Cited – Alessandra Yarns llc v Tongxiang Baoding Textile Co Ltd 6-Feb-2015
(Superior Court of Quebec) The Court was asked whether the fraud exception to a letter of credit had been met such that the court should issue an interlocutory injunction to prevent the beneficiary claiming under the letter of credit. There were . .
Cited – Re General Horticultural Company, Ex parte Whitehouse ChD 1886
Wills, to whom a sum had been allowed in a winding up for work done for the liquidator, charged the amount due to him as security for the payment of three debts, the total amount of which exceeded the sum due to him from the company. Notice of the . .
Cited – Rogers v Whitely QBD 1889
Money in a bank account included money of which the judgment debtor was trustee.
Held: That money could not be ordered to be paid to the judgment creditor who obtained the charging order: ‘he can only obtain payment out of the debtor’s own . .
Cited – Williams v Everett And Others 25-Nov-1811
. .
Cited – Gibson v Minet And Another 28-Feb-1824
. .
Cited – Webb v Stanton CA 1883
A garnishee order was obtained against a trustee purporting to attach the beneficiary’s share of the trust income. No income was however in the trustee’s hands which he was at that time due to pay to the beneficiary.
Held: The garnishee order . .
Cited – Rekstin v Severo Sibirsko Gosudarstvennoe Aksionernoe Obschestvo Koseverputj and the Bank for Russian Trade Ltd CA 1932
The plaintiff sought to enforce payment of a judgment in his favour against the defendant (the Severo Sibirsko Bureau) by service of a garnishee order nisi on the Bureau’s bank, the Bank for Russian Trade. The order was served less than an hour . .
Cited – Dunlop and Ranken Ltd v Hendall Steel Structures Ltd CA 1957
There was no debt arising under a building contract which could be the subject of a garnishee order where there was no ’cause of action’ and no debt until an architect’s certificate had been issued.
Lord Goddard CJ said: ‘. . until the . .
Cited – Merchant International Company Ltd v Natsionalna Aktsionerna Kompaniia Naftogaz Ukrainy and Another CA 10-Dec-2014
he debt sought to be attached was said to be owed by a bank to the judgment debtor Naftogaz. But the bank had received the money from Naftogaz as the agent bank under a loan agreement for distribution to the loanholders. It was not therefore, in the . .
Cited – Ferrera v Hardy CA 7-Oct-2015
H appealed from a decision to set aside a third party debt order which he had obtained over a debt he said was due to F from Liverpool City Council in respect of housing benefit owed to F as rent for one of F’s tenants.
Held: A judgment . .
Cited – Wood v Capita Insurance Services Ltd SC 29-Mar-2017
Construction of term of contract for the sale and purchase of the entire issued share capital of a company.
Held: The appeal was dismissed: ‘the SPA may have become a poor bargain, as it appears that it did not notify the sellers of a warranty . .
Lists of cited by and citing cases may be incomplete.
Banking, International
Updated: 01 October 2022; Ref: scu.597671