Hamzeh Malas & Sons v British Impex Industries Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE JENKINS,LORD JUSTICE SELLERS,LORD JUSTICE PEARCE |
| Judgment Date | 10 December 1957 |
| Judgment citation (vLex) | [1957] EWCA Civ J1210-3 |
| Court | Court of Appeal |
| Date | 10 December 1957 |
[1957] EWCA Civ J1210-3
Lord Justice Jenkins
Lord Justice Sellers And
Lord Justice Pearce.
In The Supreme Court of Judicature
Court of Appeal
MR GERALD GARDINER Q.C. and MR J. FOX-ANDREWS (instructed by Messrs Simmons & Simmons) appeared on behalf of the Appellants (Plaintiffs below).
MR A.A. MOCATTA, Q.C. and MR FRANK LITTMAN (instructed by Messrs Menasse & Tobin) appeared on behalf of the Respondents (Defendants below).
In this case the Plaintiffs are a Jordanian firm who agreed to buy from the Defendants, a British company, a quantity of reinforced steel rods. These steel rods were to be delivered in two instalments and payment was to be effected by the opening in favour of the Defendants of two confirmed letters of credit with the Midland Bank Limited in London, one in respect of each instalment. The letters of credit were duly opened. The first has been realised by the Defendant vendors, and they are on the point of realising the second. This application is concerned with the second letter of credit.
It appears that when the first consignment of steel rods arrived they were, according to the Plaintiffs, by no means up to contract quality and many criticisms were made on that score. That is a matter in issue between the parties.
In the meantime the Plaintiffs wish to secure themselves in respect of any damages they may be found to be entitled to when this dispute is ultimately tried out, by preventing the Defendants from dealing with this outstanding letter of credit, Mr Gardiner in effect treats this as no more than part of the price, a cum earmarked to pay for the goods bought under the contract, which the Plaintiffs have become entitled to repudiate; and he gays that the Defendants ought, accordingly, to be restrained from dealing with the amount of this letter of credit. He points out that he is not seeking any order against the Bank, but merely against the Defendants.
We have been referred to a number of authorities, and it seems to be plain enough that the opening of a confirmed letter of credit constitutes a bargain between the banker and the vendor of the goods, which imposes upon the banker an absolute obligation to pay, irrespective of any dispute there may be between the parties as to whether the goods are up to...
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