Macquarie Bank Ltd v Banque Cantonale Vaudoise [2024] EWHC 114 (Comm) (26 January 2024)

Facts · 事实

HTML VERSION OF APPROVED JUDGMENT ____________________ Crown Copyright © This judgment was handed down remotely at 10.30am on 26 January 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives. ............................. The Honourable Mr Justice Foxton: This is the Defendant's ("BCV's") application challenging the jurisdiction of the court in respect of proceedings commenced by the Claimant ("MBL") asking the court to make declarations as to MBL's entitlement to enforce two Standby Letters of Credit ("the SBLCs") issued by BCV. The English proceedings were commenced on 1 August 2022, in circumstances in which MBL had previously commenced proceedings against BCV in Switzerland for the same relief on 24 November 2020 ("the Swiss Civil Proceedings"). The Swiss Civil Proceedings were stayed on BCV's application on 3 September 2021 pending an ongoing criminal investigation in Switzerland relating to the transaction, and they remain stayed. By the time of this hearing, the only live issue between the parties was whether MBL could satisfy the court that England and Wales is clearly the most appropriate forum for the determination of the dispute. I informed the parties at the end of the argument that I was so satisfied and dismissed BCV's jurisdiction challenge. This judgment sets out my reasons for doing so. The background 4. MBL is an international bank, incorporated and existing under the laws of Australia. BCV is a bank, incorporated and existing under the laws of Switzerland, with its registered office in Switzerland. By an "Advance Payment and Supply Agreement" dated 22 November 2019 (with reference number MP19-25-500-IDME-018) ("the November Agreement"), MBL agreed to purchase, and a UAE company called Phoenix Global DMCC ("Phoenix") agreed to sell, 75,000mt (+/-10%) of coal. By clause 2 of the November Agreement, MBL was obliged to make payment in advance, in the amount of US$4,537,500. That payment was made to Phoenix on 22 November 2019 ("the November Payment"), to be secured by an SBLC. MBL entered into two further "Advance Payment and Supply Agreements" with Phoenix (again, as supplier), dated 15 January 2020 and 28 January 2020 (together "the 2020Agreements"), in relation to the purchase by MBL of 70,000mt (+/-10%) of coal ("theCargo"). The 2020 Agreements also provided for payment to be made by MBL in advance, to be secured by SBLCs. 9. BCV issued two SBLCs on 9 and 23 January 2020: i) SBLC No. IX01117010308925 dated 15 January 2020 in the amount of US$4,340,000. ii) SBLC No. IX01117010309522 dated 28 January 2020 in the amount of US$4,410,000. The SBLCs were stated to be subject to the "VERSION OF THE ICC UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS IN EFFECT ON THE DATE OF ISSUE �" (which was UCP 600). The SBLCs were "SUBJECT TO � THE LAWS OF ENGLAND". MBL contends that Phoenix failed to deliver the Cargo and was therefore in default under the November Agreement, and that this constituted an event of default of "any other agreement between the Parties" within the meaning of Clause 1.1 of the 2020 Agreements. On 17 March 2020, MBL issued default notices to Phoenix and called for repayment of the Advance Payments in full within 5 business days. No payments were made, and Phoenix has since gone into liquidation. On 26 March 2020, MBL demanded payment under the SBLCs in the amounts of US$4,340,000 and US$4,410,000. Under Article 14(b) of UCP 600, BCV was entitled to 5 business days to consider whether, on their face, the payment requests constituted compliant presentations, and under Article 16(d) of UCP 600, if rejecting the requests, BCV was required to give notice to MBL no later than the fifth banking day following the day of presentation. BCV sent two SWIFT messages, dated 2 and 3 April 2020, requesting additional information relating to the shipment of goods under the underlying sale contract between MBL and Phoenix which MBL provided by SWIFT message of 8 April 2020. BCV did not identify any discrepancies in the payment requests, whether within 5 business days or at all, nor did BCV give notice that it was refusing to honour the SBLCs. On 23 April 2020, MBL started the process for its claim for relief in the Swiss Civil Proceedings. On 24 November 2020, after obtaining authorisation to proceed, MBL formally filed a claim against BCV in the Chambre Patrimoniale Cantonale, in Lausanne, Switzerland ("the CPC"). On 11 December 2020, BCV filed a criminal complaint with the Minist�re Public Central (the Central Public Prosecutor's Office) in the Canton of Vaud against "an unknown person" for fraud and forgery, alleging that Phoenix presented documents to obtain the SBLCs which suggested that Phoenix was buying the Cargo from MBL, rather than the other way around. BCV alleges that these contracts were fictitious / falsified and that, if Phoenix had made it clear that it was actually selling the Cargo to MBL, BCV would not have provided the SBLCs in the form which was used. I shall refer to the resultant criminal investigation as the Swiss Criminal Proceedings. MBL denies any involvement in any dishonest actions, and BCV currently advances no allegation that MBL was involved. Nor has MBL been named in any criminal proceedings. On 12 March 2021, BCV sought a stay of the Swiss Civil Proceedings, pending the outcome of the Swiss Criminal Proceedings. On 3 September 2021, the CPC granted BCV's application for a stay. MBL appealed against the stay to the Chambre des Recours Civile du Tribunal Cantonal Vaudois ("the Vaud Court of Appeal"), requesting that the stay be lifted. On 9 December 2021, the Vaud Court of Appeal declined to lift the stay, which was to remain in place "until the criminal proceedings PE20.022757FDA currently pending before the Central Public Prosecutor's Office of the Canton of Vaud are remitted or abandoned". On 11 February 2022, C appealed to the Tribunal F�d�ral ("the Swiss Supreme Court"). On 25 March 2022, the Swiss Supreme Court dismissed MBL's appeal. While expert evidence from Sir William Blair as to the applicable principles of English law relating to payment under letters of credit was placed before the Swiss Courts, it does not feature in the explanations given for the decisions reached by the Swiss Courts, which are reasoned exclusively by reference to Swiss law. By letter of 9 May 2023, the CPC requested that the parties provide an update as to the Swiss Criminal Proceedings. On 25 May 2023, Mr Fabien Hohenauer of HDC law, on behalf of MBL wrote to M Guex, on behalf of BCV, inviting BCV to participate in a joint request to the CPC to lift the stay of proceedings. On 30 May 2023, Mr Guex wrote separately to the CPC making clear that BCV would oppose any request to lift the stay of the Swiss Civil Proceedings. By letter of the same date, Mr Guex separately responded to Mr Hohenauer referring to his letter to the CPC and refusing the latter's request jointly to request the lifting of the stay. On 6 June 2023, Mr Hohenauer wrote to the CPC unilaterally requesting the lifting of the stay. The CPC responded by letter dated 7 June 2023 refusing that request. Two letters rogatory have been sent as part of the criminal proceedings for the purpose of securing evidence (one to the prosecutor in Australia on 22 April 2022, and one to the United Arab Emirates on 27 May 2022). On the evidence before the Court, no responses have yet been received. The time estimate originally put forward by M Guex for a likely response to those requests has, on any view, been exceeded, and any estimate as to when a response will come is necessarily highly speculative. These proceedings were issued on 11 August 2022, and MBL was given permission to serve BCV out of the jurisdiction on 18 August 2022. The parities placed Swiss law evidence before the court as to how long the stay of the Swiss Civil and Criminal Proceedings could reasonably be expected to continue. The experts agree that the stay of the Swiss Civil Proceedings that has been granted is of "indeterminate duration" which would fall to be lifted once a decision has been made by the Public Prosecutor that the Swiss Criminal Proceedings have been "remitted or abandoned". BCV's expert, M Guex, suggests that the CPC might resume the Swiss Civil Proceedings after the requests for international assistance have been answered, or if there is no response. MBL's expert, M Michod, disagrees and points out that the Vaud Court of Appeal has held that the stay will be lifted only on a decision to refer or close the Swiss Criminal Proceedings. The experts agree that it is "currently difficult to estimate the length of the criminal proceeding, and therefore the length of the civil proceeding between MBL and BCV". Even if and when answers to these requests are obtained, the progress of the Swiss Criminal Proceedings remains unclear. As M Michod points out, if the Public Prosecutor proceeded with an indictment or classification against persons other than MBL, without reaching any decision about MBL, the stay of the Swiss Civil Proceedings would continue. M Michod anticipates that the resolution of the Swiss Civil Proceedings could take several years. On the evidence before me, I am satisfied that there is a very real risk of the Swiss Civil Proceedings remaining stymied for a period of several years, although I accept more favourable outcomes (measured in many months) are also possible. The consequences of the parties' choice of English law as the governing law of the SBLCs The legal effects of a letter of credit governed by English law are clear. As noted in Edward Owen Engineering Ltd v Barclays Bank International Ltd [1979] QB 159, 169: "It has been long established that when a letter of credit is issued and confirmed by a bank, the bank must pay it if the documents are in order and the terms of the credit are satisfied. Any dispute between buyer and seller must be settled between themselves. The bank must honour the credit. That was clearly stated in Hamzeh Malas & Sons v British Imex Industries Ltd [1958] 2 QB 127, Jenkins L.J. giving the judgment of this court, said, at p. 129: '� 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 contract or not. An elaborate commercial system has been built up on the footing that bankers' confirmed credits are of that character, and, in my judgment, it would be wrong for this court in the present case to interfere with the established practice.' To this general principle there is an exception in the case of what is called established or obvious fraud to the knowledge of the bank." Even where the courts of the bank's domicile have granted an injunction seeking to prevent a bank from paying out under a letter of credit, that will not provide it with a basis for refusing to do so. As Lord Denning MR noted in Power Curber International Ltd v National Bank of Kuwait Sak [1981] 1 WLR 1233, 1241-42: "If the court of any of the countries should interfere with the obligations of one of its banks (by ordering it not to pay under a letter of credit) it would strike at the very heart of that country's international trade. No foreign seller would supply goods to that country on letters of credit � because he could no longer be confident of being paid. No trader would accept a letter of credit issued by a bank of that country if it might be ordered by its courts not to pay. So it is part of the law of international trade that letters of credit should be honoured � and not nullified by an attachment order at the suit of the buyer. Added to this, it seems to me that the buyer himself by his conduct has precluded himself from asking for an attachment order. By opening the letter of credit in

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