Karafarin Bank v Dara

Karafarin Bank v Dara

The defendant is personally liable on the cheques under Iranian law, including those drawn on the company account, by virtue of his signature and Article 19 of the Iranian Cheque Act 2003. The cheques are valid despite being undated when signed. The Bank is entitled to damages for late payment calculated by...

Source-derived case information.

Parties
Claimant: Karafarin Bank; Defendant: Gholam Reza Mansoury Dara
Jurisdiction
England and Wales
Judgment Date
10 December 2009
Procedural Posture
Commercial Claim (cheques/credit Facilities) / Final Judgment After Trial
Outcome
Judgment for the claimant
Legal Topics
Enforcement of Foreign Cheques, Personal Liability of Company Directors Under Foreign Law, Measure of Damages for Dishonoured Cheques, Application of Iranian Law in English Courts
Commercial Law Conflict of Laws Banking Law Enforcement of Foreign Cheques Personal Liability of Company Directors Under Foreign Law Measure of Damages for Dishonoured Cheques Application of Iranian Law in English Courts

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Summary, issues, holding and outcome

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Parties

Karafarin Bank

Claimant

Gholam Reza Mansoury Dara

Defendant

Procedural Posture

Commercial Claim (cheques/credit Facilities) / Final Judgment After Trial

Legal Issues

  1. 1 Whether the defendant is personally liable on cheques under Iranian law
  2. 2 Whether undated cheques are valid under Iranian law
  3. 3 Whether damages for late payment (inflation adjustment) are recoverable under Iranian law and enforceable in England

Ratio Decidendi

The defendant is personally liable on the cheques under Iranian law, including those drawn on the company account, by virtue of his signature and Article 19 of the Iranian Cheque Act 2003. The cheques are valid despite being undated when signed. The Bank is entitled to damages for late payment calculated by reference to inflation under Article 522 of the Iranian Civil Procedure Code. All procedural requirements, including notice of dishonour, were satisfied. The amount claimed does not exceed the underlying debt.

Court Disposition

Judgment for the claimant

Orders

  • Defendant to pay the US dollar equivalent of Iranian Rials 54,817,932,902 (US$5,548,373.78 as at 23 November 2009) to the claimant, representing principal and damages for late payment.
  • Further submissions to be made regarding interest or damages on the judgment debt, if any.