George Gabriel Bitar v Bank of Beirut S.A.L
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 15 August 2022 |
| Neutral Citation | [2022] EWHC 2163 (QB) |
| Docket Number | Case No: QB-2021-001312 |
| Court | Queen's Bench Division |
[2022] EWHC 2163 (QB)
Mr Justice Freedman
Case No: QB-2021-001312
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
James Cutress QC and Daniel Carall-Green (instructed by Rosenblatt Law) for the Claimant
Barry Issacs QC and Donald Lilly (instructed by Howard Kennedy LLP) for the Defendant
Hearing dates: 19, 20, 21, 22 & 26 July 2022
Judgment handed down in draft 11 August 2022
Approved Judgment
This judgment will be handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 11.00am on Monday 15 August 2022
I Contents
| SECTION NUMBER | SUBJECT | PARAGRAPH NUMBER |
| I | Contents | |
| II | Introduction | 1 |
| III | Factual background (a) The parties and their relationship (b) The Claimant's residence (c) Use of the accounts for international transfers (d) The crisis in Lebanon (e) Transfer requests of the Claimant (f) The tender and deposit procedure | 6 |
| IV | Questions for the Court to decide | 26 |
| V | The cases of Khalifeh and Manoukian | 27 |
| VI | The witnesses (a) The factual witnesses (b) The expert witnesses a) Professor Marie-Claude Najm, expert witness for the Claimant b) Fadi Moghaizel, expert witness for the Defendant | 33 |
| VII | How to deal with foreign law | 46 |
| VIII | Sources of Lebanese law (a) The relevant codes (b) Case law (c) Status of Urgent Matters Decision Construction of contracts under Lebanese law | 47 |
| IX | Construction of the Account Agreements (a) The express terms (b) Discussion | 59 |
| X | Custom | 73 |
| XI | Related issues | 85 |
| XI | Change in custom | 86 |
| XII | Acceptable reason exception | 99 |
| XIII | The Bank's submission that no international transfer obligation exists due to the Lebanese law of agency | 115 |
| XIV | Is there a new custom? | 135 |
| XV | The effect of the tender and deposit procedure | 147 |
| XVI | Specific performance | 149 |
| XVII | Damages | 152 |
| XVIII | Interest | 153 |
| XIX | Conclusions | 155 |
| XX | Disposal | 157 |
II Introduction
This is the third case tried before the High Court in London arising out of the failure or refusal of Lebanese bankers to pay to depositors sums alleged to be owing on their accounts. The Banks have said that the issues arise out of difficult financial conditions faced by Lebanese banks. The previous cases were Khalifeh v Blom Bank SAL [2021] EWHC 3399 (QB) (Foxton J 17 December 2021) ( “Khalifeh”) and Manoukian v Banque au Liban SAL and another [2022] EWHC 669 (QB) (Picken J 25 March 2022) (“ Manoukian”). The Lebanese bank prevailed in Khalifeh, whereas the depositor prevailed in Manoukian. There was an application for permission to appeal in Manoukian, which has been rejected.
By this claim, the Claimant seeks repayment of money in two bank accounts (the “First Account” and the “Second Account”) he holds with the Defendant (the “Bank”). The Accounts are held under two contracts (the “First Account Agreement” and the “Second Account Agreement”) which are in materially the same terms. The amount of the indebtedness between the accounts is a sum of US$7,790,624 plus interest.
The Claimant claims that the Bank is obliged to make international transfers to transfer money to the Claimant's UK bank account. Such obligation arises from the terms of the accounts and/or from banking custom and practice. The Claimant claims specific performance, alternatively damages together with interest at the rate of 9% per annum.
The Bank says that the terms of the agreements do not as a matter of construction contain an obligation to make international transfers. Although there was a custom to make international transfers from inception subject to an “acceptable reason” exception, it says that by the time the Claimant gave his instructions, the custom had come to an end due to the political and banking crisis in Lebanon and to guidance given by the Association of Lebanese Bankers (“ABL”). In any event, the Bank says that in these circumstances, it had an acceptable reason not to make an international transfer.
In the alternative, the Claimant claims repayment of the debt which the Bank owes him. As to the claim in debt, the Bank says that it has discharged the debt by mean of a Banqu du Liban (“BdL”) cheque using the Article 822 or “tender and deposit” procedure, a Lebanese procedure whereby a debtor can seek to discharge a debt by payment via a notary. If this occurred, it was not before January 2022. It is common ground that in the event that the Claimant was entitled to an international transfer, whether by contract or by custom, that occurred before January 2022, and the Article 822 procedure would not apply.
II Factual background
(a) The parties and their relationship
The Claimant is a consultant radiologist at Chelsea and Westminster Hospital. He was born and educated and has always lived and worked in England, and is a UK national, but he and his parents are also Syrian nationals. He does have Lebanese connections and ties. His parents are also Lebanese nationals, and his mother has lived in Lebanon for over 20 years; and his father has split his time between Nigeria (where the family's business is located) and Lebanon. He considers himself to have “ Lebanese connections and ties”.
The Bank is a Lebanese joint stock company formed under the laws of Lebanon, and carries on business as a retail bank. In December 2006, the Claimant opened an account (numbered 466150) with his father and brother. Later, he opened a personal account (numbered 469020) in his sole name, but in June 2015 he asked for that account to be closed. In July 2015, the Claimant opened the accounts which are now in dispute, namely:
(1) the First Account (numbered 469770) with his wife; and
(2) the Second Account (numbered 469775) with his parents and brother.
The First Account and the Second Account have a number of sub-accounts, the names and functions of which the Claimant explains in his written evidence. Three of those sub-accounts are the subject of the present proceedings. They are:
(1) the First USD Current Account, which is a sub-account of the First Account and is a form of current and checking account called a “ winner” account;
(2) the Second USD Current Account, which is a sub-account of the Second Account and is also a “ winner” account; and
(3) USD Fixed Deposit Account, a sub-account of the Second Account.
The funds in the USD Fixed Deposit Account have, since the beginning of these proceedings, been transferred by the Bank to the Second USD Current Account. Therefore, this claim now simply concerns sums sent to and/or contained in the First USD Current Account and the Second USD Current Account.
The obligation in respect of a loan under Lebanese law is that absent some clause to this effect, a bank receives a money deposit to use those funds as its own. As in the case of English law, the bank becomes the owner of the funds and has an obligation of retuning the deposited funds by providing the equivalent quantity of the sum in the same currency.
(b) The Claimant's residence
An issue which has arisen is whether the Claimant represented in certain forms that he was resident in London. It is not apparent to what this issue goes to in the determination of this litigation. If it goes to credit, I am satisfied, having seen the Claimant give evidence, that he is an honest witness who did not intend to mislead the Bank. He was hampered in his ability to fill out forms because he was not able to understand forms in Arabic. Further, as Mr Georges Assaf acknowledged, the Claimant's personal information form was completed by the Bank. The Bank also completed some forms erroneously: on one of them, it referred to his being a self-employed contractor with an income of zero yet depositing income from his work of $100 per month.
In another, it provided his address as being in Nigeria. This was despite the Claimant having stated to the Bank in 2017 that his tax residence was in the UK. The Claimant had declared by 24 December 2017 at the latest that his “ Residence Address” was in the UK and “ Country of Tax Residence” was the UK. He wrote letters and emails to the Bank giving his address as Lennox Gardens.
It was apparent from a statement of one of his relationship managers, Mr Haddad from an interlocutory hearing, that he and Mr Chidiac were aware that the Claimant lived in England. Mr Assaf accepted in his evidence that he knew that the Claimant worked at the Queen Elizabeth Hospital (in fact, it was the Queen Alexandra Hospital, Portsmouth, but that simply reflected an inexactitude in the question, and it was obvious that it was a UK hospital). Mr Assaf said that he had known that the Claimant's brother lived and worked in Nigeria and that Mr Chidiac had known that the Claimants father worked there. Having seen that the Claimant ticked the “Outgoing transfers” box on one of the forms, Mr Assaf accepted that it was clear from the account forms that the Claimant would want international transfers including transfers to and from England. The account opening documents from December 2006 show that the Claimant was British and had a UK passport. Further, his account 469020 (the one that the Claimant asked to be closed in 2015) was or included a GBP account for use in the UK. He requested transfers to his UK account, and he corresponded regularly with Mr Kanzaria of Bank of Beirut UK. The Bank sent hundreds of texts over the years to...
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