Riyad Bank & Ors v Ahli United Bank (UK) Plc

Riyad Bank & Ors v Ahli United Bank (UK) Plc

UBK owed a duty of care in tort to the Fund because it assumed responsibility for the advice given, knowing the Fund would rely on it, and the contractual structure did not negate this duty. UBK breached this duty by failing to carry out independent and competent valuation analyses, resulting in negligent advice. The appropriate standard for non-negligent valuation was set at OLVIE (Orderly Liquidation Value in Exchange) with a permissible range of ±15%.

Parties
Claimant/respondent: Riyad Bank; Claimant/respondent: RBE London Ltd; Claimant/respondent: RBE Ijara Fund Plc; Defendant/appellant: Ahli United Bank (UK) Plc (formerly The United Bank of Kuwait Plc)
Jurisdiction
England and Wales
Judgment Date
13 June 2006
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal dismissed; High Court judgment upheld
Legal Topics
Duty of Care, Negligent Misstatement, Professional Negligence, Concurrent Liability, Valuation of Assets, Islamic Finance
Commercial Law Banking Law Tort Law Duty of Care Negligent Misstatement Professional Negligence Concurrent Liability Valuation of Assets +1 more

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Parties

Riyad Bank

Claimant/respondent

RBE London Ltd

Claimant/respondent

RBE Ijara Fund Plc

Claimant/respondent

Ahli United Bank (UK) Plc (formerly The United Bank of Kuwait Plc)

Defendant/appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether UBK owed a duty of care in tort to the Fund despite the contractual structure
  2. 2 Whether UBK breached its duty of care in the valuation advice given to the Fund
  3. 3 Appropriate principles for assessing breach and damages in negligent valuation

Ratio Decidendi

UBK owed a duty of care in tort to the Fund because it assumed responsibility for the advice given, knowing the Fund would rely on it, and the contractual structure did not negate this duty. UBK breached this duty by failing to carry out independent and competent valuation analyses, resulting in negligent advice. The appropriate standard for non-negligent valuation was set at OLVIE (Orderly Liquidation Value in Exchange) with a permissible range of ±15%.

Court Disposition

Appeal dismissed; High Court judgment upheld

Orders

  • UBK owed a duty of care to the Fund in tort and was liable for negligent advice on lease valuations.
  • Damages to be assessed in accordance with the principles set out in the judgment.