George Gabriel Bitar v Banque Libano-Française SAL
| Jurisdiction | England & Wales |
| Judge | Mr Justice Kerr |
| Judgment Date | 16 January 2023 |
| Neutral Citation | [2023] EWHC 17 (KB) |
| Court | King's Bench Division |
| Docket Number | Case No: QB 2021 000430 |
[2023] EWHC 17 (KB)
Mr Justice Kerr
Case No: QB 2021 000430
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr James Cutress KC and Mr Daniel Carall-Green (instructed by Rosenblatt (a trading name of RGB Legal Services Limited) for the Claimant
Mr Rajesh Pillai KC and Mr Philip Hinks (instructed by Dechert LLP) for the Defendant
Hearing dates: 8, 9, 10, 11 and 16 November 2022
Approved Judgment
This judgment was handed down remotely at 10.00am on 16 January 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives (see eg https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html).
Introduction
The claimant is a British and Syrian consultant radiologist. He lives and works in London with his family. He seeks specific performance of an obligation he says is owed by the defendant bank ( the Bank) based in Beirut, Lebanon, to transfer to his US dollar ( USD) account in London the sum of USD 4,245,829 plus interest at 9 per cent. Alternative claims are made in debt or for damages.
The Bank is a joint stock Lebanese company which carries on business as a retail bank. It says it is not obliged under the contract of deposit ( the agreement), governed by the law of Lebanon, and under Lebanese law, to make international transfers in USD. The gist of the defence is that the Bank is entitled to pay the balance to the claimant in Lebanon, in Lebanese pounds ( LBP) or in US dollars that are exchangeable at only about 15 per cent of their normal market value.
The action was tried before me in London from 8 to 16 November 2022. I received written and oral evidence from the claimant, two officers of the Bank, Mr Walid Gebrane and Mr Walid Raphael, and an expert in Lebanese law instructed by each party. The written and oral opening and closing submissions were very detailed and most helpful to the court.
The experts were Professor Marie-Claude Najm, instructed by the claimant, and President Mouhib Maamari, instructed by the Bank. I regard both as eminent jurists in Lebanon. I am most grateful for their assistance and that of Ms Sandra Coade, the French language interpreter who translated the oral testimony of President Maamari, given in French.
Shortly after receiving closing submissions, in advance of this judgment I informed the parties of the outcome: that the claim succeeds. I issued an order for specific performance of the Bank's obligation with interest at 9 per cent. If I had prepared my full judgment before issuing my order, there was a risk that capital controls legislation in Lebanon would frustrate the success of the claim.
The jurisdiction of this court was established in a judgment of Mr Michael Kent KC (as he now is) sitting as a deputy High Court judge, refusing to declare that the court lacked jurisdiction ( Bitar v. Banque Libano-Française SAL [2021] EWHC 2787 (QB)). He accepted that the contract was a consumer contract and that the consumer, Dr Bitar, could therefore sue in the court of his own domicile.
Issues
The issues raised concern the interpretation of the agreement and points of law; principally, Lebanese law. The facts were mostly not in dispute, but some factual issues did arise, mainly concerning the content and effect of oral communications between officers of the Bank and the claimant's parents and what was passed on to the claimant by his parents.
Some of the issues have previously been considered in three decisions of this court involving other Lebanese banks, considered further below: Khalifeh v. Blom Bank SAL [2021] EWHC 3399 (QB) (Foxton J); Manoukian v. Société Générale de Banque au Liban and Bank Audi SAL [2022] EWHC 669 (QB) (Picken J); and Bitar v. Bank of Beirut SAL [2022] EWHC 2163 (QB) (Freedman J). Both parties relied on aspects of the reasoning in those cases.
The issues for determination were agreed at the case and costs management conference, in the form of a list of 12 questions to be answered by the court. These were set out in a helpful table, carefully cross-referenced to the pleadings. However, the claimant then sought to reframe the issues in his detailed opening written submissions, substituting six questions, some with sub-questions. These were proclaimed to be “[t]he questions for the court to decide”.
Generally, a party who agrees to a formulation of the issues does not promote the overriding objective by unilaterally departing from it, without asking the court or the other side. The Bank in its closing written submissions, inevitably criticised the revised formulation, suggesting the claimant sought advantage from it. And I am now left without an agreed formulation of the issues.
One purpose of agreeing the issues beforehand is to determine a uniform structure for the parties' submissions which is likely to be followed in the court's judgment. It is an efficient way of proceeding. If a party changes its mind about the wording of the issues, that efficiency is undermined. A party seeking a change should raise this with the other side and, if necessary, the court.
That did not happen here. However, I accept that the list of 12 questions is unwieldy. It could usefully have been revisited. I think the best course now is to formulate the issues in my own way. I will address the following questions:
(1) Does the agreement on its true construction, aside from any custom, confer on the claimant a right to require the Bank to make a transfer in USD to a bank outside Lebanon (an international transfer right)?
(2) For the purpose of assessing the effect of any custom, is the relevant time the date when the agreement was entered into or the date on which a relevant instruction was given to transfer funds outside Lebanon?
(3) Does the agreement include an international transfer right, or does the claimant have an international transfer right, because of a custom among banks in Lebanon at the relevant time or times?
(4) Did the Bank, by communications with the claimant's parents, or by reference to an email dated 8 September 2020 or otherwise, terminate or modify or suspend any obligation to effect international transfers?
(5) Has the claimant validly requested or instructed the Bank to make, or validly demanded that it make, one or more relevant international transfers? If so, what was its or their nature and effect?
(6) Did the Bank discharge its debt by providing a cheque drawn on the Banque du Liban ( BDL) and depositing it with a notary, using the procedure in article 822 ff. of the Lebanese Code of Civil Procedure of 1983 ( LCCP)?
(7) To what remedy or remedies, if any, is the claimant entitled? In particular, what is the relevant interest rate if the claimant is entitled to specific performance or an equivalent remedy in debt or damages?
Facts
The claimant was born in London in 1983 and has always lived in this country. He was educated here, studied medicine here and has worked for various NHS bodies. His parents are Syrian born. He has dual British and Syrian nationality. His mother and father have both British and Lebanese nationality. His mother lives in Lebanon. His father and brother live and work in Nigeria.
The Bitar family's dealings with the Bank's subsidiaries began in around 2010. The group includes Banque SBA SA in Paris ( SBA), owned by the Bank; and SBA's Swiss subsidiary, LF Finance (Suisse) SA ( LFF), in Geneva. In about 2010, the claimant, his father and brother opened a joint account with LFF in Geneva. The claimant regarded LFF as a branch of the Bank.
He planned to place about USD 3 million with LFF. He went to Geneva to meet LFF officers and later that year placed funds with LFF. The amounts placed amounted to at least USD 500,000 in value, in a combination of pounds sterling ( GBP), euros ( EUR) and USD. He expected the funds to be kept in “LF Beirut” (as he wrote in an email in 2012), i.e. deposited with the Bank.
From 2012 to 2014, LFF sent marketing communications to the claimant, encouraging him to place further funds. The claimant was living and working in London as a doctor. He married in 2014. He and his wife now have two young children. He was sporadically engaged in correspondence with LFF about the placing of funds. He continued to regard LFF as a branch of the Bank.
In about October 2014, the claimant and his family, through their trust company, Egerton Holdings Ltd ( Egerton), borrowed EUR 6 million from SBA ( the SBA loan) to fund a property purchase in Paris. The SBA loan was later increased to EUR 8 million and was or became secured on funds placed with LFF. Various transfers took place over the years in the course of these dealings. I will refer to some below; not all the detail can be or need be reconstructed.
In 2014, it is common ground that the Bank was interested in attracting deposits from outside Lebanon in foreign currencies, particularly USD. Many transactions of substance in Lebanon, such as buying a house, are done in USD. The Bank's website at the time included a section dedicated to the expatriate market, the allure of favourable interest rates and the availability of accounts denominated in non-Lebanese currencies.
At trial, the Bank emphasised the Lebanese diaspora and the importance of remittances from outside Lebanon to relatives at home, suggesting the flow of funds would be mainly inwards not outwards. I agree that the Bank was keen on inward rather than outward flows of USD, but I accept the claimant's point that the website entries said nothing about restrictions on withdrawal; and that depositors generally expect to be able to withdraw money as well as deposit it.
I come to the opening of the account at the heart of this case ( the joint account ...
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