Alternative Power Solution Ltd (Appellant) v (1) Central Electricity Board (2) Standard Bank (Mauritius) Ltd (Respondents)

Alternative Power Solution Ltd (Appellant) v (1) Central Electricity Board (2) Standard Bank (Mauritius) Ltd (Respondents)

The fraud exception was not established because there was insufficient evidence that APS acted fraudulently or that Standard Bank was aware of any fraud. The underlying dispute was contractual and subject to arbitration, and the requirements for an injunction restraining payment under the letter of credit were not met.

Citation
[2014] UKPC 31
Parties
Appellant: Alternative Power Solution Limited; First Respondent: Central Electricity Board; Second Respondent: Standard Bank
Jurisdiction
United Kingdom
Judgment Date
09 September 2014
Procedural Posture
Appeal / Judgment on Appeal From Supreme Court of Mauritius to Privy Council
Outcome
Appeal allowed
Legal Topics
Letters of Credit, Fraud Exception, Injunctions, Bank Obligations, Contractual Disputes
Banking Law Commercial Law International Trade Letters of Credit Fraud Exception Injunctions Bank Obligations Contractual Disputes

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Parties

Alternative Power Solution Limited

Appellant

Central Electricity Board

First Respondent

Standard Bank

Second Respondent

Procedural Posture

Appeal / Judgment on Appeal From Supreme Court of Mauritius to Privy Council

Legal Issues

  1. 1 Whether the fraud exception to payment under a letter of credit was established
  2. 2 Whether the bank was aware of any fraud by the beneficiary
  3. 3 Whether the injunction restraining payment under the letter of credit was properly granted

Ratio Decidendi

The fraud exception was not established because there was insufficient evidence that APS acted fraudulently or that Standard Bank was aware of any fraud. The underlying dispute was contractual and subject to arbitration, and the requirements for an injunction restraining payment under the letter of credit were not met.

Court Disposition

Appeal allowed

Orders

  • Injunction restraining payment under the letter of credit is set aside
  • Costs to be paid by Central Electricity Board to APS and Standard Bank, subject to further submissions