First Energy (U.K.) Ltd v Hungarian International Bank Ltd

JurisdictionEngland & Wales
Judgment Date24 February 1993
Date24 February 1993
CourtCourt of Appeal (Civil Division)

Court of Appeal

Before Lord Justice Steyn, Lord Justice Nourse and Lord Justice Evans

First Energy (UK) Ltd
and
Hungarian International Bank Ltd

Contract - reasonable expectations

Protection of expectations of honest men

Although not a rule or principle of law, it was the objective which was the principal moulding force of the law of contract that the reasonable expectations of honest men were to be protected. If the prima facie solution to a problem ran counter to such expectations, that criterion might require a rigorous re-examination of the problem to ascertain whether the law did indeed compel demonstrable unfairness.

The Court of Appeal so stated on February 24 when dismissing an appeal by the Hungarian International Bank Ltd from a judgment in favour of First Energy (UK) Ltd by Judge Kershaw, sitting as a deputy High Court judge of the Commercial Court of the Queen's Bench Division on October 23, 1991.

Miss Mary Arden, QC and Mr Michael Todd for the bank; Mr Giles Wingate-Saul, QC and Mr Andrew Sander for First Energy.

LORD JUSTICE STEYN said that his general observations were of relevance to a question of ostensible authority of a senior manager of the bank's Manchester branch to communicate to First Energy that the bank's head office had approved financing facilities.

If the implications that the bank placed on the House of Lords' decision inArmagas Ltd v MundogasELR ([1986] 1 AC 717) were accepted by the court then its decision would frustrate the reasonable expectations of the...

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77 cases
1 firm's commentaries
12 books & journal articles
  • The Legal Status and Enforceability of Mediated Settlement Agreements
    • Ireland
    • Hibernian Law Journal No. 12-2013, January 2013
    • 1 Enero 2013
    ...All ER Rep 494 as cited by Boulle and Nesic, supra note 15, p.509. 44 First Energy (UK) Ltd v Hungarian Institutional Bank Ltd [1993] 2 Lloyd’s Rep 194 as cited by Boulle and Nesic, supra note 15, p.510 45 Winn v Bull (1877) 7 Ch D 29 as cited by Boulle and Nesic, supra note15, p.510 46 For......
  • GOOD FAITH IN THE PERFORMANCE OF COMMERCIAL CONTRACTS REVISITED
    • Singapore
    • Singapore Academy of Law Journal No. 2014, December 2014
    • 1 Diciembre 2014
    ...Seng Pte Ltd v International Trade Corp Ltd [2013] EWHC 111 at [144]. 12 See First Energy (UK) Ltd v Hungarian International Bank Ltd[1993] 2 Lloyd's Rep 194 at 196, per Lord Steyn, and Johan Steyn, “Contract Law: Fulfilling the Reasonable Expectations of Honest Men”(1997) 113 LQR 433. 13 S......
  • The Journey of Good Faith: Where Does It belong in General Contract Law?
    • United Kingdom
    • Southampton Student Law Review No. 9-1, January 2019
    • 1 Enero 2019
    ...the commercial outcome should be for what the parties actually intended, clearly issues remain 124ibid. 125 Yam Seng (n64) [142]. 126[1993] 2 Lloyd's Rep 194, 196. 127 J. W Carter and Wayne Courtney, “Good Faith in Contracts: is there an implied promise to Act Honestly” 2016 75 CLJ 608, 611......
  • Insurance Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2021, December 2021
    • 1 Diciembre 2021
    ...of the “self-authorising agent”; see Armagas Ltd v Mundogas SA [1986] 1 AC 717; First Energy (UK) Ltd v National Hungarian Bank Ltd [1993] 2 Lloyd's Rep 194; Kelly v Fraser (Jamaicas) [2012] UKPC 25; and Skandinaviska Enskilda Banken AB (Singapore Branch) v Asia Pacific Breweries (Singapore......
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