PT Pan Indonesia Bank Ltd TBK v Marconi Communications International Ltd

PT Pan Indonesia Bank Ltd TBK v Marconi Communications International Ltd

The contract between the confirming bank (Panin Bank) and the beneficiary (Marconi) was more closely connected with England than Indonesia, due to the contemplated negotiation and payment in London, and the involvement of SCB London as negotiating/advising bank. The presumption in Article 4(2) of the Rome Convention was displaced by Article 4(5). Therefore, English law governs the contract, and England is the appropriate forum. The appeal is dismissed.

Parties
Appellant/defendant: PT Pan Indonesia Bank Limited Tbk; Respondent/claimant: Marconi Communications International Limited
Jurisdiction
England and Wales
Judgment Date
27 April 2005
Procedural Posture
Civil Appeal / Appeal From High Court Decision on Application to Set Aside Service Out of Jurisdiction
Outcome
Appeal dismissed
Legal Topics
Governing Law of Contracts, Letters of Credit, Jurisdiction, Service Out of Jurisdiction, Forum Conveniens
Conflict of Laws Banking Law Commercial Law Governing Law of Contracts Letters of Credit Jurisdiction Service Out of Jurisdiction Forum Conveniens

Case Brief

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Parties

PT Pan Indonesia Bank Limited Tbk

Appellant/defendant

Marconi Communications International Limited

Respondent/claimant

Procedural Posture

Civil Appeal / Appeal From High Court Decision on Application to Set Aside Service Out of Jurisdiction

Legal Issues

  1. 1 What is the governing law of the contract between the confirming bank and the beneficiary under a letter of credit?
  2. 2 Was the contract made within the jurisdiction?
  3. 3 Did SCB act as agent for Panin Bank in advising confirmation?

Ratio Decidendi

The contract between the confirming bank (Panin Bank) and the beneficiary (Marconi) was more closely connected with England than Indonesia, due to the contemplated negotiation and payment in London, and the involvement of SCB London as negotiating/advising bank. The presumption in Article 4(2) of the Rome Convention was displaced by Article 4(5). Therefore, English law governs the contract, and England is the appropriate forum. The appeal is dismissed.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed on all grounds
  • Costs subject to detailed assessment with interim payment of £20,000