Banque Saudi Fransi v Lear Siegler Services Inc.
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PILL |
| Judgment Date | 19 July 2006 |
| Neutral Citation | [2006] EWCA Civ 1130 |
| Docket Number | B6/2005/2386 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 July 2006 |
[2006] EWCA Civ 1130
Lord Justice Pill
Lord Justice Arden
Lord Justice Scott
B6/2005/2386
MR S ELLIOTT (instructed by Messrs Skadden, Arps, Slate, Meagher & Flom (UK) LLP, LONDON, 314 5DS) appeared on behalf of the Appellant.
MR P MARSHALL QC (instructed by Messrs Baker and McKenzie, LONDON, EC4V 6JA) appeared on behalf of the Respondent.
LADY JUSTICE ARDEN: For the reasons given in the draft in writing, I would dismiss this appeal.
I agree with Arden LJ's judgment. In my view, the test in CPR 24.2 applies in this context as in any other. I see no justification for ignoring the words of the rule in this context. It follows that I agree with Arden LJ in her conclusion in the last sentence of paragraph 18.
However, the context is that stated by Lord Denning MR as cited in paragraph 11 of the judgment of Arden LJ:
"'The only exception is when there is clear fraud of which the bank has notice.'"
What has to be established in the present situation at the first stage is a real prospect that fraud by the beneficiary can be proved. That means that there must be a real prospect of proving that the beneficiary could not honestly have believed in the validity of its demands on the performance bond; Ackner LJ in United Trading as cited by Arden LJ at paragraph 13 of her judgment.
In the present context, that task is a difficult one. It is a high hurdle, as the authorities in my judgment recognise. There are no admissions by the beneficiary, though admissions are not the only way in which fraud can be proved, as Ackner LJ acknowledges in the same judgment.
Read as a whole, I do not consider that the judgment of Mance LJ, as he then was, cited by Arden LJ at paragraph 15 of her judgment, takes a different view of the test to be applied in the present situation; that is the situation as between the bank and its customer, but in any event I agree with...
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