Bilal Khalifeh v Blom Bank S.A.L. (a Société Anonyme Libanaise incorporated under the laws of Lebanon)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 04 June 2021 |
| Neutral Citation | [2021] EWHC 1502 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB-2020-001937 |
| Date | 04 June 2021 |
[2021] EWHC 1502 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Freedman
Case No: QB-2020-001937
Hugh Mercer QC and Zahler Bryan (instructed by Rosenblatt Ltd) for the Claimant
Ian Wilson QC and Ryan Ferro (instructed by Dechert LLP) for the Defendant
Hearing dates: 23 March, 12, 19 & 27 May 2021
Approved Judgment
I Introduction
This is an application for an anti-suit injunction (“ASI”) requiring the Defendant to discontinue proceedings issued in Lebanon in February 2021 and to be restrained from commencing or prosecuting any further such proceedings until further order. The Claimant applies for this anti-suit injunction on two grounds, namely:
(1) the Claimant uses his legal right as a consumer not to be sued in respect of matters relating to his contract with the Defendant pursuant to Article 18(2) of Regulation (EU) No 1215/2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (“Brussels Recast”). He seeks to apply two Court of Appeal cases to say that this gives rise to an enforceable right to restrain foreign proceedings inconsistent with that right; and
(2) the vexatious or oppressive nature of the Lebanese proceedings.
The position of the Defendant can be summarised as follows. As to the first ground, it submits that Brussels Recast does not create rights enforceable by an injunction not to be sued in a foreign court. As to the second ground, it denies that the Lebanese proceedings are vexatious or oppressive. On the contrary, the intended purpose and effect of the ASI would be to deprive the Defendant of a substantive defence in ongoing English proceedings in circumstances where there is no risk of the Claimant having to face ongoing parallel substantive litigation in a foreign jurisdiction.
On 8 September 2020, Master Davison gave judgment ( [2020] EWHC 2427 (QB)) on an application of the Claimant for summary judgment and of the Defendant on a jurisdictional challenge. He related that the applications had been heard over two days and had generated 9 lever-arch files of documents, six lever-arch files of authorities and skeleton arguments running together to more than 100 pages. However, he said that some pivotal issues were relatively short. This Court finds itself facing almost as many files of documents and authorities as well as skeleton arguments running together to about 70 pages.
In fact, the scope of the applications has been greatly reduced because of the undertakings which have been provided rather late in the day and in the face of the application: see Claimant's skeleton argument at para. 59.4. It is useful to summarise the scope of the order sought and the undertakings which have been offered. That which has been sought is as follows:
“2. Pursuant to section 37 of the Senior Courts Act 1981 the Defendant, whether by itself, its servants, agents or otherwise:
2.2 be restrained until further order from commencing or prosecuting or continuing or taking any steps to initiate proceedings in any court or tribunal in Lebanon, or in any other court or tribunal other than in England and Wales, against the Claimant in respect of any dispute relating to or arising out of the General Agreement for Opening and Operating Creditor Accounts dated 14 October 2016, including the Lebanese proceedings or at all.
2.3 withdraw the tender and deposit made with the notary public on 25 January 2021 and take any and all steps necessary to cease the Article 822 procedure initiated by that tender and deposit including all steps necessary to discontinue and/or withdraw the Lebanese proceedings.”
The scope of the undertakings offered by the Defendant (subject to a cross-undertaking required) is as follows:
“the Defendant undertaking that it shall not, subject to further order of the Court, prosecute or continue to take any further steps in the Lebanese Proceedings, and shall not serve them on the Claimant, and shall not commence or initiate any other proceedings other than in England and Wales in respect of the dispute relating to or arising out of the General Agreement for the Opening and Operating Creditor Accounts.
the Claimant cross-undertaking that he shall not, subject to further order of the Court, prosecute or continue to take any steps in the Lebanese Proceedings and shall not commence or initiate any other proceedings other than in England and Wales in respect of the dispute relating to or arising out of the General Agreement for the Opening and Operating Creditor Accounts.”
The undertaking offered effectively concedes paragraph 2.2 of the application. Further, the Claimant has withdrawn the opening words of paragraph 2.3 of the application, that is to say the application to compel the Defendant to “withdraw the tender and deposit made with the notary public on 25 January 2021”: this is in the face of the objection of the Defendant that an ASI would not normally restrain taking a step short of an action in proceedings. It follows that that which is outstanding is the remainder of paragraph 2.3, the contentious part of which is as follows:
“[that the Defendant] take any and all steps necessary to cease the Article 822 procedure initiated by that tender and deposit including all steps necessary to discontinue and/or withdraw the Lebanese proceedings.”
That leaves a relatively narrow issue, albeit one of significance to the parties. The Claimant is seeking in effect a mandatory order against the Defendant to cease the proceedings in Lebanon on the basis that the Claimant does not regard it as sufficient for the Defendant not to take any further steps in those proceedings.
II Factual background
On or around 14 October 2016 the Claimant opened two US dollar accounts with the Defendant, a Lebanese bank. These accounts were a US dollar current account and a US dollar time deposit account (together “the USD Accounts”), both of which were opened pursuant to an agreement between the parties (“the Banking Contract”). The Claimant transferred his savings in US dollars into the USD Accounts.
Due to an ongoing financial and economic crisis in Lebanon, the Claimant requested the repayment of his accounts. He made a series of demands for repayment in May and June 2020 as set out more fully at paragraph 11 of the Particulars of Claim. The Defendant's response was to offer a US dollar banker's cheque drawn on the Banque du Liban (“the BdL”) in repayment of the funds held. The Claimant repeatedly declined these offers, explaining that it was in practice worthless, as he would not be able to convert such a cheque into funds which he could use. The Claimant says that the amounts owed by the Defendant remain unpaid.
In its skeleton argument for this application, the Defendant submits at para. 16 that “The Claimant is well aware of the economic and liquidity issues with which Lebanon and its banking institutions are presently confronted…The Bank faces extraordinary economic conditions. By these proceedings, the Claimant is trying to put himself into the position of a preferential (and, effectively, secured) creditor of the Bank at the expense of its other customers.”
The claim is for the return of moneys comprising a sum before interest of US$1,439,891.20 and also for consequential loss resulting from the moneys not having been paid. There has been no appeal against the dismissal of the challenge to jurisdiction. The Defendant filed an Acknowledgment of Service accepting the jurisdiction of the English Court. To the level required on a refusal to accede to the jurisdictional challenge, Master Davison accepted that (i) the Personal USD Accounts were accounts opened by the Claimant in circumstances that “place him squarely in the category of consumer” (para. 24); (ii) the Claimant was domiciled in the UK in October 2016 when the Banking Contract was concluded (para. 28), (iii) the Defendant directed its professional activities to the UK in 2016 (para. 29), and (iv) the Banking Contract fell within the scope of the Defendant's professional activities directed to the UK (para.29).
There has been a clear joinder of issue on the pleadings. On 17 December 2020, the Defendant served a Request for Further Information in respect of the RAPC, seeking clarification inter alia as to whether it was the Claimant's case that the Defendant was not entitled to effect payment of the debt by a banker's cheque drawn in US dollars on the BdL. The Claimant's response served on 24 December 2020 was that he was not obliged to accept an offer of such a cheque as payment of the debt regardless of whether the applicable law was English law or Lebanese law.
The Defendant served its Defence on 11 January 2021. The Defence accepted that there was an existing debt that was payable on demand, but:
(1) claimed that Lebanese law is applicable in that the contract entered into in 2016 contained a clause conferring jurisdiction on the court of Beirut and is governed by Lebanese law. It was not a consumer contract for the purposes of Article 6 of Rome I: see Amended Defence paras. 6 – 15 and para. 23. Even if it were a consumer contract, Lebanese law would still apply by virtue of Article 6(2) of Rome I, because the Bank and the Claimant chose Lebanese law as its applicable law.
(2) denied that the debt was due on the alleged basis that no valid demand had been made, whatever the applicable law. The format and content of a valid and effective demand, and...
To continue reading
Request your trial
-
Bilal Khalifeh v Blom Bank Sal
...the Bank should be required to withdraw the Validation Proceedings, in addition to undertaking not to pursue them. Freeman J (at [2021] EWHC 1502 (QB), [65]) refused to make a mandatory injunction, because: “If the Defendant's alleged legal position is correct … then it is possible that th......
-
Alliance Financial Services Ltd v The Bank of Jamaica
...National Commercial Bank Jamaica Ltd v Olint Corp Ltd (Jamaica) [2009] UKPC 16 (‘ NCB v Olint’), Bilal Khalifeh v Blom Bank S.A.L. [2021] EWHC 1502 (QB) (‘ Khalifeh v Blom Bank’), Garden Cottage Foods Ltd v Milk Marketing Board [1984] 1 AC 130 and Novartis AG v Hospira UK Ltd [2014] 1 WL......