First Energy (U.K.) Ltd v Hungarian International Bank Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 24 February 1993 |
| Date | 24 February 1993 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Steyn, Lord Justice Nourse and Lord Justice Evans
Contract - reasonable expectations
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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