Standard Bank London Ltd. v Canara Bank [2002] EWHC 1032 (Comm) (22 May 2002)

Standard Bank London Ltd. v Canara Bank [2002] EWHC 1032 (Comm) (22 May 2002)

The court found that the second Dravya supply contract was not a sham; there was sufficient evidence of genuine mining and smelting operations and actual shipments of tin. The guarantee was not procured by fraud and is enforceable. Canara Bank is liable under the guarantee. Even if the contract had been a sham, Canara Bank would not have a complete defence to restitution, as it had not changed its position in good faith before notice of Standard's claim.

Citation
[2002] EWHC 1032 (Comm)
Parties
Claimant: Standard Bank London Ltd; Defendant: Canara Bank
Jurisdiction
England and Wales
Judgment Date
22 May 2002
Procedural Posture
Commercial Claim / Final Judgment After Trial
Outcome
judgment for the claimant
Legal Topics
Performance Guarantees, Sham Contracts, Fraud, Restitution, Mistake, Change of Position Defence
Banking Law Commercial Law Contract Law Performance Guarantees Sham Contracts Fraud Restitution Mistake +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 3 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Standard Bank London Ltd

Claimant

Canara Bank

Defendant

Procedural Posture

Commercial Claim / Final Judgment After Trial

Legal Issues

  1. 1 Whether the second Dravya supply contract was a sham and thus the guarantee unenforceable
  2. 2 Whether Canara Bank is liable under the demand guarantee
  3. 3 Whether Standard Bank is entitled to restitution for mistaken payments

Ratio Decidendi

The court found that the second Dravya supply contract was not a sham; there was sufficient evidence of genuine mining and smelting operations and actual shipments of tin. The guarantee was not procured by fraud and is enforceable. Canara Bank is liable under the guarantee. Even if the contract had been a sham, Canara Bank would not have a complete defence to restitution, as it had not changed its position in good faith before notice of Standard's claim.

Court Disposition

judgment for the claimant

Orders

  • Canara Bank to pay Standard Bank US$10 million under the demand guarantee
  • Interest and costs awarded to Standard Bank