Sierra Leone Telecommunications Company Ltd v Barclays Bank Plc
| Jurisdiction | England & Wales |
| Judgment Date | 06 February 1998 |
| Date | 06 February 1998 |
| Court | Queen's Bench Division |
Queen's Bench Division
Before Mr Justice Cresswell
Banking - account of company owned by foreign government - appointment of directors by new unrecognised government
An international bank holding a bank account in the United Kingdom for a foreign company wholly owned by the government of that country was not obliged to give effect to a purported variation of mandate changing the account's authorised signatories communicated by directors purportedly appointed by a new government which had attained power by military coup, and which was not the constitutional government of that country nor recognised as such by the British government.
The directors, not being appointed by a government of state as required by the company's articles of association, were invalidly appointed and the original mandate stood.
Mr Justice Cresswell so held in the Queen's Bench Division in granting the plaintiff, Sierra Leone Telecommunications Ltd, a declaration that its US dollar account held at the Knightsbridge International Banking Centre of the defendant, Barclays Bank plc, remained subject to the original terms of the mandate dated July 31, 1996 and in particular remained subject to instructions given on behalf of the plaintiff by the named signatories identified therein and no others. Proceedings were instigated by the Sierra Leone High Commissioner who represented the government of President Kabbah.
Mr Timothy Saloman, QC, for the plaintiff; Mr Richard de Lacy for the bank.
MR JUSTICE CRESSWELL said that the case raised important issues as to international recognition and international banking. It reflected the problems faced by an international bank when it held an account of a company wholly owned by a foreign government and there was a military coup in the country in question.
Sierratel was a company incorporated in Sierra Leone as a parastatal company, that is, a company wholly owned by the Sierra Leone government which controlled its business dealings. Sierratel held a US dollar account
at Barclays' Knightsbridge International Banking Centre in London.
On May 25, 1997 a coup took place in the Republic of Sierra Leone. The democratically elected government of President Kabbah had since then continued as the government of Sierra Leone from Conakry, Republic of Guinea.
The British government had consistently condemned the military coup and continued to deal with the...
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