Haugesund Kommune & Anor v Depfa ACS Bank & Anor

Haugesund Kommune & Anor v Depfa ACS Bank & Anor

The Kommunes lacked capacity under Norwegian law to enter into the swaps contracts, and under English law, this rendered the contracts void. Depfa was entitled to restitution for the sums advanced, as there was no statutory or public policy bar to recovery and the defence of change of position did not apply because the Kommunes took the investment risk knowing repayment was required. The appeal and cross-appeal were dismissed.

Parties
Claimant/appellant: Haugesund Kommune; Claimant/appellant: Narvik Kommune; Defendant/respondent: Depfa ACS Bank; Appellants/part 20 Defendant: Wikborg Rein & Co
Jurisdiction
England and Wales
Judgment Date
27 May 2010
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From Queen’s Bench Division, Commercial Court
Outcome
Appeal and cross-appeal dismissed
Legal Topics
Capacity of Corporations, Ultra Vires, Restitution for Unjust Enrichment, Change of Position Defence, Public Policy in Restitution, Authority of Agents, Interpretation of Foreign Law, Enforceability of Void Contracts
Conflict of Laws Restitution Banking and Finance Law Local Government Law Capacity of Corporations Ultra Vires Restitution for Unjust Enrichment Change of Position Defence +4 more

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Parties

Haugesund Kommune

Claimant/appellant

Narvik Kommune

Claimant/appellant

Depfa ACS Bank

Defendant/respondent

Wikborg Rein & Co

Appellants/part 20 Defendant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From Queen’s Bench Division, Commercial Court

Legal Issues

  1. 1 Whether the Kommunes lacked capacity under Norwegian law to enter into the swaps contracts, rendering them void under English law
  2. 2 Whether Depfa could recover sums advanced under the void contracts in restitution
  3. 3 Whether the Kommunes could rely on a change of position defence or public policy to defeat or limit restitution

Ratio Decidendi

The Kommunes lacked capacity under Norwegian law to enter into the swaps contracts, and under English law, this rendered the contracts void. Depfa was entitled to restitution for the sums advanced, as there was no statutory or public policy bar to recovery and the defence of change of position did not apply because the Kommunes took the investment risk knowing repayment was required. The appeal and cross-appeal were dismissed.

Court Disposition

Appeal and cross-appeal dismissed

Orders

  • Swaps contracts declared void
  • Kommunes ordered to repay sums advanced by Depfa plus interest