Uzinterimpex JSC v Standard Bank Plc [2008] EWCA Civ 819 (15 July 2008)

Uzinterimpex JSC v Standard Bank Plc [2008] EWCA Civ 819 (15 July 2008)

No term is to be implied into the guarantee to prevent double recovery, as the guarantee is an autonomous instrument and the parties did not intend such a term. The Bank was not liable as a constructive trustee for proceeds of sale because it did not receive the funds with the requisite knowledge or in a beneficial capacity. The Bank was liable in conversion for refusing to release documents of title, but Uzinterimpex failed to mitigate its loss by refusing to agree to a sale of the goods, limiting its recoverable damages.

Citation
[2008] EWCA Civ 819
Parties
Claimant/appellant: Uzinterimpex J.S.C.; Defendant/respondent: Standard Bank PLC
Jurisdiction
England and Wales
Judgment Date
15 July 2008
Procedural Posture
Commercial Contract Dispute (appeal) / Court of Appeal Judgment
Outcome
Appeal dismissed in part, allowed in part (only as to quantum of damages for conversion)
Legal Topics
Performance Bonds, Letters of Credit, Conversion, Implied Terms, Constructive Trusts, Mitigation of Loss
Commercial Law Banking Law Contract Law Performance Bonds Letters of Credit Conversion Implied Terms Constructive Trusts +1 more

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Parties

Uzinterimpex J.S.C.

Claimant/appellant

Standard Bank PLC

Defendant/respondent

Procedural Posture

Commercial Contract Dispute (appeal) / Court of Appeal Judgment

Legal Issues

  1. 1 Whether a term should be implied into the guarantee to prevent double recovery by the Bank
  2. 2 Whether the Bank was liable as a constructive trustee for proceeds of sale received from AMJ
  3. 3 Whether the Bank was liable in conversion for refusing to release documents of title

Ratio Decidendi

No term is to be implied into the guarantee to prevent double recovery, as the guarantee is an autonomous instrument and the parties did not intend such a term. The Bank was not liable as a constructive trustee for proceeds of sale because it did not receive the funds with the requisite knowledge or in a beneficial capacity. The Bank was liable in conversion for refusing to release documents of title, but Uzinterimpex failed to mitigate its loss by refusing to agree to a sale of the goods, limiting its recoverable damages.

Court Disposition

Appeal dismissed in part, allowed in part (only as to quantum of damages for conversion)

Orders

  • No implied term to prevent double recovery is to be read into the guarantee.
  • No liability for knowing receipt or constructive trust arises against the Bank.