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Habib Bank v Cntrl Bank of Sudan

11-27-2007, 05:01 PM
بكرى ابوبكر
<aبكرى ابوبكر
Registered: 02-04-2002
Total Posts: 19600






Habib Bank v Cntrl Bank of Sudan

    Quote: Dear Ustaz Bakri,

    When forwarding to you my contacts in lieu of this subject I do not expect that these contacts would be cited at your website. They contained confidential information as a result of contacting major UK Law Firms. Citing them at your website causes to me great injuries in that UK Law Firms will not trust me any more as these correspondents enjoy privilege.

    I've forwarded these correspondents to you only for your info and not for any other purpose. Having done so, this will make me conservative in dealing with you. I was about to share with you my other contributions that make concern to the public interest, but I was so surprised when viewing these correspondents cited.
    I'm not a politician and I do not belong to any other party in Sudan. I'm a lawyer and that is all. I'm not running after benefits. For your info, after my articles were cited by Elaff I came to know from the secretary editor of Al Masaref Magazine that I'm black listed and they are not ready to deal with me in any issue pertaining to banking sector even if it's for the benefit of the banking organ. These are the directives he received. He further clarified that defaulters hired some lawyers to write articles critisizing the Sale of Property Mortgaged to Banks Act 1990 with a view to repeal it for their interest to avoid selling their properties mortgaged to banks. I replied to him that no customer has hired me or paid me to do what I've done and I do not represent any customer in respect of his dispute with his banker.

    Best Regards

    Ismat Abdel Gadir
    Lawyer
    Khartoum - Sudan



    [2006] Vol. 1
    LLOYD'S LAW REPORTS PLUS
    76








    QUEEN'S BENCH DIVISION
    (COMMERCIAL COURT)

    13, 14 June; 19 July 2006

    ____________________


    HABIB BANK LTD
    v
    CENTRAL BANK OF SUDAN

    [2006] EWHC 1767 (Comm)

    Before Mr Justice Field

    Banking – Letters of credit – Payment made under letters of credit by issuing bank – Failure by confirming bank to provide indemnity – Jurisdiction of English court – Service outside the jurisdiction – Whether service valid – Whether agreement governed by English law – CPR Parts 6.20 and 6.24 – Whether claim time barred – Whether debt acknowledged – Limitation Act 1980, sections 5 and 29 – Rate of interest.

    The claimant, HB, a bank incorporated in Pakistan, was approached by CBS to open letters of credit to finance the purchase of oil by GPC from Tradinaft, on the basis that CBS would indemnify HB. Two letters of credit were issued and notified to Tradinaft in 1982: LC 218 was for US$7,474,549.80, and LC 233 was for US$7,700,000. By telex dated 27 April 1982 CBS authorised HB's London branch (HBL) to negotiate the documents as presented notwithstanding any discrepancies.A total of US$13,158,199.80 was paid under the credits by HB, this sum reflecting deductions in respect of agreed confirmation commission and incidental charges. The gross total charged to CBS under an express undertaking "to honour your claim for principal amount and interest at maturity" was US$14,120,379.77 with interest at 2 per cent over LIBOR down to 180 days from the dates of the bills of lading and thereafter at 3 per cent over LIBOR.

    CBS made part payments between June 1983 and February 1991 totalling US$2,679,958.99, but failed to pay the balance. Thereafter no further payments were made.

    On 6 June 2003 HB issued a claim form which was valid for an initial four months, and on 23 July 2003 Moore-Bick J gave permission for service out of the jurisdiction, so that the claim form remained valid for six months. The time for service was extended by David Steel J on 12 November 2003 on evidence that it could take up to a year to effect service. Time was extended by a further six months by Cooke J on 14 February 2005 in the absence of evidence that the Sudanese authorities had taken steps to serve the claim form. Cooke J gave permission for amendment of the claim form, and service of the amended pleading out of the jurisdiction by an alternative method of service. On 9 March 2005 service of the amended claim form was effected by the permitted alternative method of service under CPR 6.25(3) and as a precautionary exercise the Amended Claim Form was delivered by the British Embassy in Khartoum to the Sudanese Ministry of Foreign Affairs on 18 April 2005. However, CBS failed to acknowledge service or to have anything to do with the proceedings. HB applied to Colman J on 3 February 2006 for directions with a view to there being a trial on the merits in the absence of CBS, and the directions sought were made.

    Held by QBD (Comm Ct) (Field J) that judgment would be given for HB in the sum of US$101,881,346.14.

    (1) The proceedings had been validly commenced. The evidence before Cooke J had been that it would not be possible to serve the claim form in a manner expressly permitted by the law of Sudan because the law of Sudan required service of process to be effected by the Sudanese court and a Sudanese court would not recognise a request to serve process issued out of an English court on a Sudanese defendant. The court had a broad discretion to allow service by an alternative method where service would otherwise be impractical or would involve very extensive delay. Under CPR 6.24 the court could permit any alternative method of service abroad under CPR 6.8 so long as it did not contravene the law of the country where service was to be effected and it was not necessary for service abroad to be expressly permitted by the foreign jurisdiction in order for it to be good service within CPR 6.24. It followed that the order made by Cooke J on 14 February 2005 was a perfectly proper and valid order that would not have been susceptible to any challenge by CBS (see paras 27, 30 and 31).

    Marconi Communications International Ltd v PT Pan Indonesia Bank Ltd [2004] 1 Lloyd's Rep. 594, Shiblaq v Sadikoglu [2004] EWHC 1890 (Comm), considered.

    (2) The English court possessed jurisdiction over the proceedings under CPR 6.20.

    (a) England was the country with the closest and most real connection with the contracts sued on, the undertakings to honour HBL's claim for principal and interest provided all terms and conditions were complied with. The contemplated performance by HBL was notification and confirmation of the letters of credit, inspection of the documents presented and negotiation of the documents. All of these steps involved action to be taken in England (see para 44);

    Bank of Baroda v Vysya Bank Ltd [1994] 2 Lloyd's Rep. 87 , applied.

    (b) England was the appropriate forum in which to try HB's claim. English law was the governing law, the contracts and all the relevant documents were in English, HBL was based in England, the contracts were performed in England, and the court fees were substantially less here than in Sudan (see para 45).

    (3) CBS was liable to HB for the sums claimed.

    (a) There was no doubt that HBL paid the sums specified in the credits to the beneficiary less confirmation and other charges that it was entitled to deduct. The payments were made against discrepant documents but CBS were aware of this and in the case of LC 233 authorised the negotiation of the documents in advance and in the case of LC 218 made no subsequent objection. In these circumstances, CBS was to be taken to have irrevocably waived their entitlement to insist on payment only against confirming documents (see para 49).

    (b) Further, CBS lost its right to object to payment against discrepant documents by reason of article 8(c)-(g) of the UCP (1974 Revision), which provided that the issuing bank on receipt of the documents had a reasonable time to decide if the documents were in accordance with the terms of the credit and as to whether to make a claim. The LC 218 documents and the LC 233 documents were sent by HBL to CBS under cover of letters dated respectively 23 April 1982 and 14 May 1982 and there was no question but that the documents were duly received. At no point had CBS claimed that HBL had not complied with the terms and conditions of the credits by accepting discrepant documents. Any such claim if advanced now would accordingly be made long after a reasonable time and would therefore be impermissible under article 8 (see para 50).

    (4) The claim was not time-barred under section 5 of the Limitation Act 1980. By a letter dated 13 September 1984 to the general manager of HBL signed on behalf of CBS by two officials, CBS apologies for not being able to make payment due to shortage in foreign exchange receipts. By a telex from CBS to HBL dated 30 December 1989 CBS accepted an offer by HBL to roll over the amount plus interest for a further six months. By a letter to HB Khartoum dated 8 August 1994 and signed by CBS, CBS confirmed its liability for principal plus interest. By a letter dated 10 June 1997 to HB Khartoum signed on behalf of CBS, it was stated that CBS confirmed liability up to 31 December 1996 for US$51,984,899.82 principal plus interest. By a letter to the manager of HB Khartoum signed on behalf of CBS dated 16 October 2002, CBS confirmed that the sum outstanding on 30 June 2002 was US$82,069,177.50. Each of these letters was an acknowledgment of debt for the purposes of section 29 of the Limitation Act 1980 and the limitation period was extended to 15 October 2008 (see paras 58, 61, 64 and 66);

    Good Challenger Navegante SA v Metalimportexport SA (The Good Challenger) [2004] 1 Lloyd's Rep 67, Dungate v Dungate [1965] 1 WLR 1477, Bradford & Bingley plc v Rashid [2006] UKHL 37, applied.

    (5) The contractual rate of interest in respect of both credits was 2 per cent over LIBOR down to 180 days after the dates of the bills of lading and thereafter 3 per cent over LIBOR. HBL was entitled to compound the interest at six monthly rests because such compounding was an established usage of bankers; it mattered not that there was no account between the parties that amounted to a mercantile account current for mutual transactions (see paras 68 and 70);

    National Bank of Greece SA v Pinios Shipping Co (No 1) [1990] 1 AC 637, applied.

    (6) CBS had by its conduct accepted a proposal by HBL on 5 July 1980 that the debts be realigned so that the two amounts due under each credit were to be consolidated into one amount and the maturity dates henceforward were to be 30 June and 31 December. Even if that were not so, CBS's conduct was such that it would be estopped from denying that their obligations on the debts had been varied by the re-alignment implemented by HBL. Accordingly, CBS was contractually liable to pay compound interest at 3 per cent above LIBOR with six monthly rests, the maturity dates being 30 June and 31 December each year (see para 74).

    ____________________


    The following cases were referred to in the judgment:

    Marconi Communications International Ltd v PT Pan Indonesia Bank Ltd [2004] 1 Lloyd's Rep 594

    Shiblaq v Sadikoglu [2004] EWHC 1890

    Bank of Baroda v Vysya Bank Ltd [1994] 2 Lloyd's Rep. 87

    Good Challenger Navegante SA v Metalimportexport SA (The Good Challenger) [2004] 1 Lloyd's Rep 67

    Dungate v Dungate [1965] 1 WLR 1477

    Bradford & Bingley plc v Rashid [2006] UKHL 37

    ____________________


    This was a claim against the defendant issuing bank by the claimant confirming bank for reimbursement in respect of payments made under two confirmed letters of credit.

    James Turner, instructed by Lane & Partners LLP, for the claimant; the defendant did not appear and was not represented.

    The further facts are stated in the judgment of Mr Justice Field.

    Wednesday, 19 July 2006


    ____________________




    JUDGMENT

    Mr Justice FIELD:

    Introduction

    1. This is a claim against an issuing bank by a confirming bank for reimbursement in respect of payments made under two confirmed letters of credit.

    2. The claimant ("HB") is a bank incorporated in Pakistan. At the material time it had branches in Karachi, London, Khartoum, New York and elsewhere. The branch in Karachi was the head office. I shall refer to the Karachi, London Khartoum and New York branches as "HOK", "HBL", "HBK" and "HBNY" respectively.

    3. The defendant ("CBS") is the national bank of Sudan.

    4. The letters of credit were issued and notified to the beneficiary and payment was made thereunder as long ago as 1982. The first letter of credit ("LC 218") was for US$7,474,549.80; the second ("LC 233") was payable on the same terms as LC 218 and was for US$7,700,000, of which US$6,645,450 was confirmed by HBL. The beneficiary of both credits was Tradinaft SA ("Tradinaft"). The total of the two payments made by the claimant under the credits was US$13,158,199.80, this sum reflecting deductions in respect of agreed confirmation commission and incidental charges. The gross total charged to CBS under an express undertaking "to honour your claim for principal amount and interest at maturity" was US$14,120,379.77 with interest at 2 per cent over LIBOR down to 180 days from the dates of the bills of lading and thereafter at 3 per cent over LIBOR.

    5. At all material times CBS has accepted that it is liable for the principal sum with interest at the above rates compounded at six monthly intervals, less part payments made between June 1983 and February 1991 totalling US$2,679,958.99 However, they have continued to fail to pay the balance due.

    6. On 6 June 2003 HB issued a claim form and on 23 July 2003 Moore-Bick J gave permission for service out of the jurisdiction. The time for service was extended by David Steel J and Cooke J on 12 November 2003 and 25 August 2004 respectively; and on 14 February 2005 Cooke J gave permission for amendment of the claim form, and service of the amended pleading out of the jurisdiction by an alternative method of service. He also extended the time for service to 5 September 2005.

    7. On 9 March 2005 service of the amended claim form was effected by the permitted alternative method of service and as a precautionary exercise the Amended Claim Form was delivered by the British Embassy in Khartoum to the Sudanese Ministry of Foreign Affairs on 18 April 2005. However, CBS failed to acknowledge service or to have anything to do with the proceedings.

    8. It would have been open to HB in this situation to obtain default judgment pursuant to CPR Part 12 but the enforcement of such a judgment is notoriously difficult in international cases because such a judgment is not a determination on the merits. HB accordingly applied to Colman J on 3 February 2006 for directions with a view to there being a trial on the merits in the absence of CBS. The learned judge made the directions sought. He did so in accordance with his own decision in Berliner Bank AG v Karageorgis [1996] 1 Lloyd's Rep. 426 where he held that the court could order under its inherent jurisdiction that there be a trial on the merits where the defendant had failed to acknowledge service so that the plaintiff could seek to obtain a judgement that if given would be far more likely to be enforceable than a default judgement.

    9. As I conclude below, HB has complied with the directions given by Colman J and the matter has come on for trial before me in the absence of CBS. Throughout the trial HB's counsel, Mr Turner, has been commendably careful to draw to my attention any points, factual or legal, that might be to the benefit of CBS. In this he was considerably assisted by the very careful and thorough way in which this case has been prepared for trial by HB's solicitors and by Mr Christopher Hayward, Head of Credit at Habib Allied International Bank plc, the entity which manages HB's delinquent debts accrued in the UK before December 2001. In particular, it is clear that thorough searches for relevant documents were made in London, Khartoum and Karachi and that HB has made full and proper disclosure.

    10. The absence of CBS has meant that the court has had to be particularly alert not only to any matters potentially in CBS's favour on the merits but also to matters going to the court's jurisdiction and to whether CBS has been given due and proper notice of all relevant matters.

    11. None of the individuals involved in the issuance and confirmation of the two credits or the payments made thereunder was called to give evidence. This was not surprising given the length of time (24 years) that has elapsed since the credits were issued, confirmed and paid. HB instead relied on the contemporaneous documents. In some cases the originals were not available but it was quite clear that all the copies put before the court were authentic.

    The issuance, advisement and confirmation of the two credits

    LC 218

    12. CBS approached HOK in January 1982 about the opening of confirmed letters of credit to finance the purchase of crude oil by General Petroleum Corporation of Khartoum from Tradinaft. Drafts of the proposed terms of the credits and the terms on which CBS would reimburse HB were exchanged between CBS and HB. One of the matters raised was a proposal that HB should be permitted to appropriate export proceeds held for CBS towards CBS's reimbursement liability. On 25 March 1982 CBS sent a telex to HBL setting out the terms of LC 218 in favour of Tradinaft. The credit was stated to be valid in the UK until 30 April 1982 for US$9,350,000 and the documents to be presented were listed. Under the heading "Special Instructions" the telex stated:

    1. Please advise this credit to beneficiaries adding your confirmation thereto.


    2. The amount of this credit is payable 180 days from the date of B/Lading at interest of 2 per cent over LIBOR.


    3. After negotiation please send us all the documents by first and second registered airmail.


    Provided that all terms and conditions have been complied with and confirmed by you as such we are prepared to present the relative 180 days draft to drawees and arrange for acceptance duly signed by them.


    We hereby undertake to honour your claim for principal amount plus interest on maturity.


    As regards all your banking charges except confirmation charges we undertake to meet your claim to the credit of your account with bank whom you nominate.


    This credit is subject to Uniform Customs and Practice for Documentary Credit (Revision 1974) International Chamber of Commerce Publication No 290.


    Above text is full details which is to be considered operative and withstanding receipt of airmail details.


    13. The terms of LC 218 were amended by two telexes received by HBL on 28 and 29 May 1982. Under the first the amount of the credit was changed to US$7,474,549.80, the details of the beneficiary were clarified and numerous changes were made to the description of the documents that had to be presented. Under the second, the first three sentences of para 3 of the Special Instructions were replaced by:

    After negotiation please send all documents by first and second registered airmail. Provided that all terms and conditions have been complied with and confirmed by you, we hereby undertake to honour your claim for principal amount and interest on maturity.


    14. No CBS answerback appears on the copy of the 25 March 1982 telex produced to the court but there is no doubt that the telex was sent by CBS to HBL because later telexes, for example that dated 29 March 1982, which do show the CBS answerback, are only explicable on the basis that CBS sent and HBL received the 25 March 1982 telex.

    15. HBL advised LC 218 to Tradinaft by letter dated 30 March 1982 but did not in this letter add their confirmation. This was done in a separate letter dated 1 April 1982, the relevant part of which reads:

    We hereby advise you further that the above mentioned Letter of Credit bears our confirmation and we undertake to honour the drafts drawn strictly in terms of the Credit and presented to us at our counter before expiry date.


    LC 233

    16. The terms of LC 233 were sent by CBS to HBL by a telex on 28 March 1982 which showed CBS's answerback. The terms were very similar to LC 218, although the amount was for US$8,085,000. In particular the "Special Instructions" were identical to those set out in the 25 March 1982 telex. The terms of the credit were amended by telexes from CBS to HBL on 29 March 1982 and 1 April 1982. As a result, the amount was changed to US$7,700,000, the description of the documents to be presented was altered and para 3 of the "Special Instructions" was amended in the same way as the equivalent paragraph in LC 218 was amended. The first of these amending telexes was a tested telex. The copy adduced of the second telex does not show CBS's answerback but it is clear from other telexes that it was sent by CBS.

    17. HBL advised Tradinaft of LC 233 by letter dated 30 March 1982 but held back from confirming the credit until CBS formally agreed to allow export proceeds held by HB to go towards satisfying CBS's reimbursement liability. CBS authorised this use of export proceeds in terms satisfactory to HB in an amended letter to HBK dated 3 April 1982, and by letter dated 5 April 1982 HBL added its confirmation to the credit "up to an extent of US$6,645,450 … only".

    Negotiation of the documents

    LC 218

    18. Documents were presented under LC 218 to HBL by Banque de Paris et des Pays-Bas (Suisse) ("BdeP") acting for Tradinaft. A day or so later HBL advised BdeP of a number of discrepancies. On 21 April 1982 BdeP responded with an indemnity in favour of HBL against rejection of the documents by CBS. On the same day CBS sent a telex to HBL authorising negotiation of the discrepant documents. However when HBL attempted to "test" the telex they did not get the required response and informed CBS of the situation by telex sent on 23 April 1982. On the same date HBL instructed HBNY to pay US$6,715,769.80 to Chase Manhattan Bank ("Chase") pursuant to a request made by BdeP that payment be made in this way.

    19. There is no doubt that HBNY transferred US$6,715,769.80 to BdeP's account with Chase. This is clear from: (a) the fact that Tradinaft stopped pressing HBL to negotiate the documents and pay out under the credit; (b) HBL's internal credit slips showing that HBNY was credited with this sum; and (c) HBL's confirmation by tested telex to BdeP that it had released payment in accordance with its instructions.

    LC 233

    20. By telex dated 27 April 1982 CBS authorised HBL to negotiate the documents as presented notwithstanding any discrepancies. The documents in fact were presented under cover of a letter from BdeP dated 11 May 1982 and were negotiated immediately, with US$5,683,650 being paid by HBL to Tradinaft.

    Failure by CBS to pay pursuant to the undertaking

    21. Apart from part payments made between June 1983 and February 1991 totalling US$2,679,958.99, CBS have failed to make payment to HBL pursuant to the undertaking to do so set out in both letters of credit. Indeed, as we shall see, CBS have admitted as much on a number of occasions.

    The validity of the proceedings

    22. Before determining whether CBS is liable to HBL on the undertaking, I must deal with the question of the validity of the proceedings and the court's jurisdiction.

    23. The claim form was issued on 6 June 2003 and application was made for permission to serve out of the jurisdiction on 21 July 2003, well before the expiry of the claim form's initial validity of four months. Moore-Bick J granted that application on 23 July 2003. Under para 1 of Moore-Bick J's order the concurrent claim form which HB was thereby entitled to issue was valid for six months.

    24. Sudan is not a signatory of the Hague Service Convention and there is no bi-lateral service treaty in place between it and the UK. Accordingly, HB adopted the only method of service provided for under the Rules – service through diplomatic channels under CPR 6.25 (3).

    25. On 12 November 2003 David Steel J extended time for service until 5 September 2004. In fact, translations of the relevant documents had reached the relevant government department in the Sudan just under four months after the original claim form had been issued, but this was not known at the time the application was granted. David Steel J granted an extension of nine months because the Foreign and Commonwealth Office indicated that it could take up to a year to effect service.

    26. In the absence of any indication that the Sudanese authorities had taken any steps to effect service on CBS, HB applied for and was granted a further extension of six months by Cooke J on 25 August 2004. HB then gave consideration to an alternative method of service and took advice from a Sudanese lawyer, Mr El-Hussein Ahmed Salih. On 30 January 2005 the claim form was delivered a second time by the British Embassy in Khartoum to the Sudanese Ministry of Foreign Affairs. On 14 February 2005 Cooke J gave permission for amendment of the claim form (the total sued for had been somewhat overstated and HB wished to quantify its claim for interest in the body of the claim form) and extended time for service to 5 September 2005. He also ordered that HB could serve the amended form by leaving a copy at CBS's offices in Khartoum with one of two named officials (including Mr Osman Ahmed Mahjoub) or any other officer of the bank of at least equal standing.

    27. The evidence before Cooke J from Mr Salih was that it would not be possible to serve the claim form in a manner expressly permitted by the law of Sudan because the law of Sudan requires service of process to be effected by the Sudanese court and a Sudanese court would not recognise a request to serve process issued out of an English court on a Sudanese defendant. On the other hand, Mr Salih reported that the method of service Cooke J was asked to and did permit was not contrary to the law of Sudan. The court has a broad discretion to allow service by an alternative method where service would otherwise be impractical or would involve very extensive delay, see Marconi Communications International Ltd v PT Pan Indonesia Bank Ltd [2004] 1 Lloyd's Rep. 594 at 601-602. Plainly, service of the originating process through diplomatic channels in this case was both impractical and subject to very extensive delay.

    28. CPR 6.24 provides:

    (1) Where a claim form is to be served out of the jurisdiction, it may be served by any method


    (a) permitted by the law of the country in which it is to be served;


    (b) provided for by


    (i) rule 6.25 (service through governments, judicial authorities and British Consular authorities);


    (ii) rule 6.26A (service in accordance with the Service Regulation); or


    (iii) rule 6.27 (service on a State);


    (c) permitted by a Civil Procedure Convention.


    (2) Nothing in this rule or in any court order shall authorise or require any person to do anything in the country where the claim form is to be served which is against the law of that country.


    29. The notes to CPR 6.24 in volume 1 of the White Book (page 221) include the words: "And see also Shiblaq v Sadikoglu [2004] EWHC 1890 (Comm), [2003] All ER (D) 428 (Comm): "the function of CPR 6.24 was to prevent service by a method which the law of the place of service did not permit in the relevant circumstances.""

    30. In my view this note is somewhat misleading. CPR 6.24 does not require service abroad "by any method … permitted by the law of the country in which it is to be served". On the contrary, it is implicit in 6.24(2) that the court may permit any alternative method of service abroad under CPR 6.8 so long as it does not contravene the law of the country where service is to be effected. In Shiblaq, Colman J found that the method of service adopted in Turkey was not simply not permitted by Turkish law for the service of foreign proceedings but "was a method expressly excluded by reason of the Turkish objection registered under the Hague Convention and could not therefore be within the scope of CPR 6.24(a)" (para 27). The decision is therefore not authority for the proposition that service abroad must be expressly permitted by the foreign jurisdiction in order for it to be good service within CPR 6.24.

    31. It follows that the order made by Cooke J on 14 February 2005 was a perfectly proper and valid order that would not have been susceptible to any challenge by CBS.

    32. As confirmed in his witness statement dated 29 March 2005, Mr Salih personally served a sealed copy of the amended claim form and accompanying documents together with Arabic translations thereof by handing the documents to Mr Osman Ahmed Mahjoub, director of CBS's legal department on 9 March 2005.

    33. On 18 April 2005 a copy of the amended claim form was delivered by the British Embassy in Khartoum to the Sudanese Ministry of Foreign Affairs as a precautionary measure in case CBS was to be regarded as a State for the purposes of CPR 6.27 (cf section 12 of the State Immunity Act 1978).

    34. It follows and I so find that: (i) the amended claim form was served by Mr Salih on Mr Osman Ahmed Mahjoub, director of CBS's legal department on 9 March 2005; (ii) such service was in accordance with Cooke J's order of 14 February 2005; and (iii) such service of the originating process in this action was good service as a matter of English law.

    35. The extensions of the claim form were applied for and granted under CPR 7.6(2) since each application was made within the period in which the claim form had to be served. There can be no doubt that the extensions were granted on proper grounds and were validly ordered. All reasonable steps had been taken to serve the claim form; the indications were that service would take up to a year (and in June 2004 "over a year"); and HB had acted promptly.

    36. Under the terms of Colman J's order of 3 February 2006 HB was permitted to serve the particulars of claim, a translation of Colman J's order and its list of documents on CBS by substantially the same method as permitted by Cooke J for the amended claim form. HB was also ordered to send copies of any affidavits that it filed with the court for the purposes of the trial. In addition, HB undertook to inform CBS of the date fixed for the trial as soon as reasonably practicable.

    37. All of these steps were duly taken. As confirmed in Mr Salih's affidavit sworn on 26 March 2006, Colman J's order and a translation of it were handed over by Mr Salih to the director of CBS's legal department on 7 March 2006 and the particulars of claim, the documents appended to it and a translation of the particulars of claim were handed over by Mr Salih to the same official on 22 March 2006. The Particulars of Claim were not in precisely the same form as the version before Colman J at the CMC, but para 1 of Colman J's order required only that the service version be "substantially" in the same form as that before him and the only changes to the particulars of claim after the CMC were slight (downward) amendments in the amounts claimed and corrections to the dates set out in schedule 5 (part payments received) and the figures in schedule 6 (interest calculations).

    38. The list of documents was served (with an Arabic translation) by Mr Salih on the director of CBS's legal department on 12 April 2006. This was later than ordered by Colman J, who had ordered that the list be served on 17 March 2006 but I find that this irregularity did not invalidate the step taken, nor did it affect the validity of the trial.

    39. On 11 May 2006 Mr Salih handed over to the director of CBS's legal department: (a) the affidavit of Mr Hayward sworn 28 April 2006; (b) the affidavit of Mr Quentin Lane sworn on 28 April 2006 (which in turn exhibited his first to sixth witness statements and all the exhibits thereto except the draft particulars of claim and supporting documents exhibited to his witness statement made in support of the application for permission to serve out in 2003 because the finalised particulars of claim and supporting documents had by then already been served); (c) the first to fourth affidavits of Mr Salih; and (d) the Civil Evidence Act notices intended to be relied on by HB.

    40. The trial date was fixed by the court on 13 February 2006. On 16 February 2006 HB's solicitors notified CBS of the date fixed by a letter sent by airmail, fax, e-mail and courier and hand-delivered by Mr Salih to the director of CBS's legal department on 7 March 2006 and 11 May 2006. A further letter dated 28 February 2006 was also sent and delivered at the latest on 11 May 2006.

    41. It is clear from the foregoing that CBS has been given ample opportunity to take part in these proceedings. It is equally clear that the notice given to CBS both of what is alleged against it and the evidence upon which those allegations are based was as full as it would have received if it had acknowledged service and participated in the proceedings. I would add that if shortly before the trial CBS had chosen to participate and asked for an adjournment of a reasonable length to instruct English lawyers to defend the proceedings I very probably would have granted their request.

    Jurisdiction

    42. I turn to the question of jurisdiction. When applying under CPR 6.20 for permission to serve out of the jurisdiction HB relied on two grounds: (i) the contracts between it and CBS were governed by English law (CPR 6.20(5)(c); and (ii) those contracts were made within the jurisdiction (CPR 6.20 (a)).

    43. The contracts sued on (the undertakings to honour HBL's claim for principal and interest provided all terms and conditions were complied with) predate the coming into force of the Contracts (Applicable Law) Act 1990 ("the 1990 Act"). The proper law of the contracts must therefore be established by reference to common law principles. There was no express choice of law. The governing law is therefore that of the country with which the contract has its closest and most real connection. In fact the position is essentially the same under the 1990 Act.

    44. Whether the contract was a unilateral or a bi-lateral contract, the contemplated performance by HBL was notification and confirmation of the letters of credit, inspection of the documents presented and negotiation of the documents. All of these steps involved action to be taken in England and I am in no doubt that England is the country with the closest and most real connection to the contracts. I am fortified in this conclusion by the decision in Bank of Baroda v Vysya Bank Ltd [1994] 2 Lloyd's Rep. 87 where Mance J held that English law was the governing law under the 1990 Act of the contract between an Indian issuing bank and an Indian confirming bank where the addition and honouring of the confirmation were all to be performed in London by the confirming bank's London branch office.

    45. My finding that the contracts were governed by English law renders it unnecessary to consider where they were made. I accordingly pass on to the question of forum conveniens. In my opinion England is the appropriate forum in which to try HB's claim. This is because English law is the governing law, the contracts and all the relevant documents are in the English language, HBL was based here, the contracts were performed here, and the court fees are substantially less here than in Sudan. As to this last point, at the time permission to serve out of the jurisdiction was sought and granted (23 July 2003) the evidence was that HB would have to pay court fees in Sudan of 5 per cent of the total claim, amounting to about US$4 million. However, the position subsequently changed so that in April 2006 the Sudanese court fee was 5 per cent of the first one million Sudanese dinars, plus 2 per cent of the next million and 1 per cent of the balance of the claim, which still amounts to a total well in excess of the court fees payable in England (see Mr Salih's fourth affidavit).

    46. There are some differences between the draft particulars of claim which were before the court when the applications to Moore-Bick and Cooke JJ were made (23 July 2003 and 14 February 2005) and the pleading which was eventually served. Some of these differences result from some insubstantial narrative amendments (eg as to the claimant ceasing to have a place of business in the UK and the wording of certain letters) and from some small downward amendments as to the sums due. In para23 it is pleaded that CBS is estopped from denying that the debts due under the letters of credit were rolled over for successive periods and in para 29 it is claimed that there was an implied contract that CBS should pay interest on the total owing at 3 per cent over LIBOR compounded at six monthly rests, alternatively CBS is estopped from denying such a contract.

    47. In my judgement all of these amendments come within the four corners of the claim for which leave was given to serve out and do not affect and would not have affected, had they existed at the time of the earlier applications, the court's discretion in exercising jurisdiction over HB's claim.

    48. In the result I find that the court had jurisdiction over HB's claim herein at the time permission was granted to serve out of the jurisdiction and has continued to have such jurisdiction down to the present day.

    Is CBS liable to HB for the sums claimed?

    Did HB comply with the terms and conditions of the credits?

    49. CBS is liable under the undertaking it gave in respect of each of the letters of credit if HBL paid Tradinaft and complied with all the terms and conditions of the credits. As I have held above, there is no doubt that HBL paid the sums specified in the credits to the beneficiary less confirmation and other charges that it was entitled to deduct. Did HBL comply with all terms and conditions? The payments were made against discrepant documents but CBS were aware of this and in the case of LC 233 authorised the negotiation of the documents in advance and in the case of LC 218 made no subsequent objection. In these circumstances, CBS must be taken to have irrevocably waived their entitlement to insist on payment only against confirming documents.

    50. Further and in any event, CBS lost its right to object to payment against discrepant documents by reason of Article 8 (c), (d), (e), (f) and (g) of the UCP (1974 Revision). Those paragraphs provided that the issuing bank on receipt of the documents had a reasonable time to decide if the documents were in accordance with the terms of the credit and as to whether to make a claim. The LC 218 documents and the LC 233 documents were sent by HBL to CBS under cover of letters dated respectively 23 April 1982 and 14 May 1982 and there is no question but that the documents were duly received. And at no point in the long history of this case has CBS claimed that HBL did not comply with the terms and conditions of the credits by accepting discrepant documents. Any such claim if advanced now would accordingly be made long after a reasonable time and would therefore be impermissible under article 8.

    51. It follows that not only did HB pay the beneficiary the sums specified in the credits, but also it is to be taken to have complied with the credits' terms and conditions.

    The limitation issue

    52. Under section 5 of the Limitation Act 1980 ("the 1980 Act"), the limitation period for HB's claim is six years.

    53. By section 29 of the 1980 Act:

    (5) Subject to subsection (6) below, where any right of action has accrued to recover – (a) any debt or other liquidated pecuniary claim; … and the person liable or accountable for the claim acknowledges the claim … the right shall be treated as having accrued on and not before the date of the acknowledgment





    (7) Subject to subsection (6) above, a current period of limitation may be repeatedly extended under this section by further acknowledgments … but a right of action, once barred by this Act, shall not be revived by any subsequent acknowledgment.


    54. To qualify as an acknowledgement for the purposes of section 29, section 30 requires that it "… must be in writing and signed by the person making it".

    55. In Good Challenger Navegante SA v Metalimportexport SA (The Good Challenger) [2004] 1 Lloyd's Rep 67 the Court of Appeal held that the sender's name in a telex was a signature for the purposes of section 30.

    56. To amount to an acknowledgement, a document must contain a sufficiently clear admission of the title or claim being acknowledged. On the other hand, an express reference to the amount of the claim is not required. Thus in Dungate v Dungate [1965] 1 WLR 1477 the words "Keep a check on totals and amounts I owe you and we will have an account now and then … Sorry I cannot do you a cheque yet – terribly short at the moment" were held to be an acknowledgement for the purposes of section 23(3) of the Limitation Act 1939, the precursor to section 29 of the 1980 Act. The amount owed could be ascertained by extrinsic evidence. This decision has very recently been approved in the House of Lords in Bradford & Bingley plc v Rashid [2006] UKHL 37, see especially the speech of Lord Brown.

    57. The first acknowledgement relied on by HB is a letter dated 13 September 1984 to the general manager of HBL signed on behalf of CBS by two officials in CBS's foreign department. This letter refers to a letter of 22 August 1984 from HBL to the general manager of CBS pressing for payment of the sums due in respect of LC 218 and LC 233 and goes on:

    We have to request you for accepting apology of not being able to affect (sic) payment due to shortage in Foreign Exchange receipts and still requesting you to give us a similar period till conditions permit us to do so.


    58. In my view this letter is a clear acknowledgement of the debt due in respect of the two letters of credit for the purposes of the 1980 Act. Accordingly, the running of the limitation period re-started, pursuant to section 29(5), to expire on 12 September 1990.

    59. The next document relied on is a telex from CBS to HBL dated 30 December 1989 in these terms:

    Reference your tlx msge dd. 27.12.89 regarding the amounts due for payment on 29.12.89 under our l/cs no. BS 218/82 D and BS 233/82 D stop We accept with thanks to rollover the amount plus interest for further six months from 29.12.89 stop best regards


    Elbank


    60. It is clear from many documents before the court that "Elbank" was the shorthand used for CBS. "Elbank" accordingly is CBS's signature for the purposes of section 30 of the 1980 Act. The telex dated 27 December 1989 specified the amount due under both credits and asked that this sum be remitted by 29 December 1989.

    61. There can be no doubt that the telex of 30 December 1989 constituted an acknowledgement for the purposes of the 1980 Act. It follows that the limitation period restarted on that date, to expire on 29 December 1995.

    62. The third document relied on is a letter to HBK signed on behalf of CBS and 8 August 1994. It reads:

    Dear Sir


    Subject:- Amounts due under our


    L/Cs NO. BS 218/233/82-D Your London Branch Ref No. FOBC 8555/8578


    Reference to your London Branch message D.D. 23.4.94 Received Through your Goodselves respect the above subject, please inform them that we confirm our liability up to 30.6.94 under the a.m. L/Cs totalling US41675390.50 (being principal plus interest) Detailed as follows …


    63. The fourth document relied on is a letter dated 10 June 1997 to HBK signed on behalf of CBS in these terms:

    Dear Sir


    Subject Amount due under our L/Cs No BS 218/233/82-D Your London Branch Ref No FOBC 8555/8578


    Reference your London Branch Message D.D. 3.6.1997 Received through your Goodselves Respect the a.m. Subject Please inform them that we confirm our liability up to 31.12.96 under the a.m. L/cs tootaling (sic) US$51,984,899.82 (Being principal plus interest) …


    64. These letters of 8 August 1994 and 10 June 1997 are clearly acknowledgements for the purposes of the 1980 Act. Their combined effect is that the limitation period was extended to 9 June 2003.

    65. The final document relied on is a letter to the manager of HBK signed on behalf of CBS dated 16 October 2002. This letter was in Arabic. In translation the relevant parts of the letter read:

    Subject: Credit numbers BS/218/82 & BS/233/82


    With reference to your letter to us dated 14/2/2002 regarding the above matter, we wish to inform that the balance of the above credits is a sum of 82,069,177.50 US dollars … This is the balance as at 30/6/2002.


    66. This too is plainly an acknowledgement for the purposes of the 1980 Act. The result is that the limitation period was extended to 15 October 2008.

    67. The claim form was issued on 6 June 2003. Accordingly, HB's claim was brought within the limitation period.

    Quantum

    The rate of interest

    68. The contractual rate of interest in respect of both credits was 2 per cent over LIBOR down to 180 days after the dates of the bills of lading and thereafter 3 per cent over LIBOR. The 2 per cent over LIBOR rate is set out in the credits themselves. The agreement as to the 3 per cent rate is evidenced by letters to HBK from CBS dated 1 April 1982 (LC 218) and 29 March 1982 (LC 233). CBS attempted to persuade HB to reduce the 3 per cent rate to 2 per cent in letters dated 3 November 1982, 25 October 1984 and 15 October 1989 but these attempts fell on stony ground. HB stuck to the agreed rate. The relevant interest rates are therefore 2 per cent and 3 per cent over LIBOR, the latter to apply after 180 days from the dates of the bills of lading. In the correspondence the 3 per cent over LIBOR rate is sometimes referred to as being "penal" but this does not mean that this rate was in the nature of an unenforceable penalty. HB was entitled to charge what rate of interest it wanted to in respect of these financing transactions so long as the rate was not contrary to any statutory provision or such as to be in terrorem of the defaulting party, which it was not.

    The rollovers

    69. It is clear that the parties contemplated that at the first maturity dates (180 days after the bills of lading), interest at 3 per cent over LIBOR rate would apply to the balance then outstanding, including interest. On 4 November 1982 CBS requested for the first time that the due dates for payments of the sums due be extended for a further six months. Thereafter, subsequent to each succeeding maturity date, CBS accepted a six-monthly rollover of the balance then outstanding, including accrued interest. An example of CBS's acceptance of six-monthly rollovers with compounding of the interest is afforded by its letter of 15 April 1989 in which it said that it regretted very much its inability to pay US$12,005,090.46 in respect of LC 233. As CBS would have well appreciated, the sum of US$12,005,090.46 reflected the compounding of interest at 3 per cent over LIBOR since the first maturity date.

    Compounding

    70. HBL was entitled to compound the interest at six monthly rests because such compounding is an established usage of bankers; it matters not that there was no account between the parties that amounted to a mercantile account current for mutual transactions: see National Bank of Greece SA v Pinios Shipping Co (No 1) [1990] 1 AC 637.

    71. Even if there were no implied contract that interest was to be compounded at six monthly rests based on the usage of bankers, CBS have throughout accepted HB's compounding in this manner and would be estopped from denying that HB is entitled to do so.

    The re-alignment

    72. By a telex dated 5 July 1989 HBL gave CBS notice that as from the dates of the expiry of the current rollovers (22 September and 18 October 1989) there were to be rollovers to expire on 29 December 1989 and thereafter the debts would be renewed with accrued interest on 30 June and 31 December each year until payment. This was to be done to "streamline" accounting. In other words the two amounts due under each credit were to be consolidated into one amount and the maturity dates henceforward were to be 30 June and 31 December.

    73. CBS apparently did not specifically reply to this telex. By telex dated 13 October 1989 HBL sought remittance of the sum due on LC 233 (including accrued interest) on maturity at 18 October 1989, namely US$13,587,206.85. CBS replied by telex dated 15 October 1989 requesting that the maturity date be extended "for another period". HBL's responded by telex of 10 October 1989 stating that the outstanding amounts under both credits, including interest, had been rolled over to 29 December 1989. Then by telex dated 27 December 1989, HBL set out the total amount due on 29 December 1989 (including interest) and stated that if this sum was not received it would be rolled over for a further six months. Thereafter CBS sent the second to fifth acknowledgements referred to in paras 59-65 above.

    74. In my judgement, the above-related course of conduct on the part of CBS amounts to an acceptance of the proposal that the two debts be re-aligned on the terms proposed by HBL on 5 July 1989. Even if this were not so, CBS's conduct is such that it would be estopped from denying that their obligations on the debts had been varied by the re-alignment implemented by HBL. Accordingly I hold that CBS is contractually liable to pay compound interest at 3 per cent above LIBOR with six monthly rests, the maturity dates being 30 June and 31 December each year.

    The precise sum due

    75. The calculation of the precise sum claimed is set out in a spreadsheet which has been checked by Mr Hayward who says in his affidavit sworn on 28 April 2006 that to the best of his knowledge and expertise it is correct. According to the spreadsheet, as at 30 June 2006 the total outstanding (including interest) was US$101,421,573.36. I have no doubt that this is indeed the sum that was due and owing on that date. The spreadsheet has since been updated to show that on the date of this judgment (18 July 2006), the sum owing is US$101,881,346.14, the accuracy of which has also been checked and verified by Mr Hayward. Again, I accept that this is the correct figure.

    Conclusion

    76. HB has established that at the date of this judgment, they are entitled to recover US$101,881,346.14 from CBS. They shall accordingly have judgment for this sum.
                  

Arabic Forum

11-27-2007, 05:03 PM
بكرى ابوبكر
<aبكرى ابوبكر
Registered: 02-04-2002
Total Posts: 19600






Re: Habib Bank v Cntrl Bank of Sudan (Re: بكرى ابوبكر)

    Date: Thu, 26 Oct 2006 12:36:30 -0700 (PDT)
    From: "ismat hagelamin" Add to Address Book Add Mobile Alert

    Subject: RE: FW: Habib Bank v Central Bank of Sudan
    To: [email protected]

    Dear Rainer,

    During my thorough search to find a way for challenging the Judgment versus CBS I found two interesting things: i) an article concerning the recent cases and consultation on withdrawal of pre-action admissions (copy attached below) ii) HISPANO AMERICANA MERCANTIL S.A.v CENTRAL BANK OF NIGERIA
    Lloyd's Rep. [1979] Vol. 2 p. 277 which review, inter alia, whether bank could claim sovereign immunity (copy will be forwarded from my gmail account).

    In the light of the above two issues I'd like to hearing your comment as to whether or not these issues 'd assist CBS.

    Tks & Rgrds
    Ismat Abdel Gadir - LL.B
    Solicitor
    Khartoum - Sudan

    *******

    Date: Wed, 18 Oct 2006 14:46:32 -0700 (PDT)
    From: "ismat hagelamin" Add to Address Book Add Mobile Alert

    Subject: Habib Bank Ltd. v Central Bank of Sudan - LL Rs. 2006
    To: [email protected]

    H.E. The Governor
    Central Bank of Sudan

    Attn. Dr. Sabir Mohammed Hassan

    Dear Dr. Sabir,
    On a procedural point, Habib Bank deliberately did not obtain judgment in default (as this can be difficult to enforce in foreign jurisdictions). Rather, there was a trial and decision on the merits, albeit without Central Bank of Sudan being present. This means that Central Bank of Sudan would have to appeal against the finding rather than apply to have it set aside.
    As a general point, and based solely on the High Court's judgment, an appeal looks difficult. It would be necessary to apply (late) for permission to appeal and, if granted permission, to win the appeal hearing. There do not appear to be strong grounds for an appeal (Central Bank of Sudan does not seem to dispute that there is a debt and seems to have admitted that, by 2002, this amounted to some $81 million). Having said that, we might, with further research, be able to advance some arguments about, for example, whether the claim was ever properly served and, if permission to appeal was granted, Central Bank of Sudan might then at least be in a better position to discuss a possible settlement with Habib Bank. There may also be an argument about the rate of interest applied, or whether interest should have been compounded, but these do not yet appear strong arguments. The best of these arguments looks to be on the question of service, but this would probably involve providing advice on what methods of service are permitted in Sudan - for example, does valid service necessarily require some involvement by the Sudanese courts?
    On this basis, there are perhaps three possible areas of work:
    i) considering the basis on which an appeal might be made against the decision;
    ii) applying for permission; and
    iii) the appeal itself.
    It is difficult to estimate costs for these without sight of the underlying papers. However, we suggest that stage i) might cost around STG 5,000 for our part of the work. Central Bank of Sudan could then consider whether to undertake stages ii) and or iii). These would involve employing a barrister as well as a solicitor, and the question of the volume of underlying documents might become significant at this point. It is difficult to estimate costs for these two stages, but stage ii) might cost another STG10,000 and stage iii) perhaps STG 225,000 . However, these estimates are extremely rough and could vary significantly either way.
    It may be that the risk of an appeal by Central Bank of Sudan would make Habib Bank more amenable to a settlement, or that we could assist in creating enforcement difficulties for Habib Bank which would also make them more willing to settle.

    It is not clear that the ruling on the amount/rate of interest is open to challenge (though we have, of course, seen only the High Court's judgment, rather than any of the underlying papers). The English courts will only very rarely set aside a contractually agreed (or implicit) rate of interest between commercial parties. It is possible, perhaps, where the rate is self-evidently extortionate, or amounts to a penalty. However, such findings are very much the exception. A more common ground would be that there was something wrong with the agreement in the sense that the parties thought they were agreeing to different things or that an agreed rate has been mis-applied /the contract has been mis-interpreted.
    I suspect, therefore, that the only way of challenging the finding on interest would be if the papers exchanged between the parties could support an argument that a different rate of interest had been agreed or intended, or that compounding should not take place, but there is nothing in the judgment that suggests such an argument could be easily made. One difficulty with attacking the interest element is the fact that CBS seem implicitly to have accepted a significant interest rate when acknowledging amounts due at various stages since the Letters of Credit were issued.
    As discussed, if there is a basis for challenge it seems at present to lie with an attack on whether CBS were ever properly served. If we were successful in this, CBS would at least be in a better bargaining position in the sense that Habib might be willing to accept a lower sum rather than have the cost, delay and risk of having, in effect, to start its action again. It is uncertain how likely even leave to appeal would be granted on these grounds. It is also unclear how strong a bargaining position CBS might achieve, but we cannot yet see any more robust approaches that might be taken. Having said that, I should repeat that this is solely on the basis of the judgment and it might be that the underlying papers would show more promising lines of attack.
    At the end I hope to hearing your comment.
    Tks & Best Rgrds
    Ismat Abdel Gadir Hagel Amin - LL.B
    Mobile:09 126 40114


    Date: Thu, 5 Oct 2006 12:28:58 -0700 (PDT)
    From: "ismat hagelamin" Add to Address Book Add Mobile Alert

    Subject: RE: Habib Bank v Central Bank of Sudan - L L Rs. 2006
    To: [email protected]

    Dear Mr. Tim,

    The genuine debt is US$ 12 Mln and the accumlated interest is US$ 89 Mln almost seven times the debt. Is there any posibility in law or equity to reduce the accumlated interest to a reasonable sum?

    Tks & Kind Rgrds
    Ismat Abdel Gadir - LL.B
    Khartoum - Sudan
    Mobile:+249 9 126 40114


    From: ismat hagelamin
    To: [email protected]
    Sent: Wednesday, October 4, 2006 11:23:03 PM
    Subject: Habib Bank v Central Bank of Sudan - LL Rs. 2006
    Dear Mr. Nahal,

    In further to our phone conversation of today evening pertaining to the above mentioned subject, I'd like to draw your attention to a publication in your web site concerning the recent cases and consultation on withdrawal of pre-action admissions as follows:

    The recent Court of Appeal decision in Stoke on Trent City Council v Walley [2006] EWCA Civ 1137 has clarified when a claimant may contest the withdrawal of a pre-action admission, notwithstanding the decision in Sowerby v Charlton [2006] 1 WLR 568 that pre-action admissions can be withdrawn without needing the court's or the claimant's permission. Sowerby had confirmed that CPR Part 14, concerning admissions, applies only to admissions made in the course of proceedings and not to pre-action admissions.
    In Walley, the first instance decision had been decided before Sowerby and the judge had considered CPR 14.1(5), which gives the court a discretion to permit a party to withdraw an admission, and refused permission for the defendant Council to withdraw its pre-action admission. That admission had been made by an employee of the Council's loss adjuster who had later been dismissed for unsatisfactory work. Before proceedings were issued the Council had written to withdraw the admission of liability. Following the decision in Sowerby, the Council appealed to the Court of Appeal. The court (Brooke, Smith and Wall LJJ) held that it was bound by Sowerby and allowed the Council's appeal, remitting the case back to the county court for determination. In giving judgment, the court took the opportunity to give guidance on the procedure for cases where pre-action admissions are later withdrawn:
    • The correct approach for a claimant who sought to contest the withdrawal of a pre-action admission (where the facts were not such that summary judgment should be entered) was to apply under CPR 3.4(2) to strike out the defence on the ground that it was an abuse of the process of the court or was otherwise likely to obstruct the just disposal of the proceedings.
    • For a claimant to show that the withdrawal of an admission would amount to an abuse of process of the court, it would usually be necessary to show that the defendant has acted in bad faith.
    • In order to show that the withdrawal of a pre-action admission is likely to obstruct the just disposal of the case, it will usually be necessary for the claimant to show that it has suffered some prejudice which will affect the fairness of the trial. For example, the claimant might have agreed to the destruction of an item of real evidence; it might have agreed that an expert inspection (no longer possible) was not necessary, or witnesses might have died or lost contact.
    Whilst clarifying the status of pre-action admissions as they now stand under the CPR, the Court of Appeal judgment also makes it clear that the judges are aware that concerns have been raised by personal injury practitioners (in particular) about the current state of the law and that the Civil Procedure Rules Committee have been asked to consider whether any amendment of the CPR might be appropriate. In his judgment, Lord Justice Brooke (with whom the other justices agreed) indicated his support for giving the status of pre-action admissions more weight than they currently enjoy under the rules. He said that: "anything that lends uncertainty to the value of a pre-action admission of liability (given in these circumstances) appears to me to run against the grain of the overriding objective, and be likely to lead to avoidable delay, expense and worry".
    This issue is now being considered by the Civil Procedure Rules Committee and a limited consultation of relevant organisation and individuals is taking place before any amendments are decided upon.

    In respect of your verbal advice, I'd like to clarify that, to my knowledge, since the American Embargo imposed on Sudan in the year 1997 Sudan was no longer dealt with USA and its closest allied countries in international transactions. In my view I doubt that CBS is still keeping assets in UK which will be subject to attachment for the enforcement of the Judgment.

    According to Sudan Civil Procedure Act of 1983 certain conditions should be fulfilled in order to enforce a foreign judgment as follows:
    i) the judgment must be issued by a competent Court and that Court has jurisdiction.
    ii) the parties 're duly appeared before the said Court.
    iii) the country in which the judgment is issued accepts the enforcement of Sudanese Courts' judgments.

    The CBS requested me to set all the relevant costs associated in handling this lawsuit, inter alia, the professional fees. As you disclosed you will send me your advice and in turn I'll keep it and I'm expected to provide the CBS with my advice including your advice, but I'll make it clear to them that the required advice shall not be delivered to them unless they pay the consultation fee.

    I'll be waiting to receive your advice in my below e-mail together with your bill.

    Tks & Kind Rgrds
    Ismat Abdel Gadir - LL.B
    Solicitor
    Khartoum - Sudan
    E-mail:[email protected]
    [email protected]

    From: ismat hagelamin
    To: [email protected]
    Sent: Thursday, October 5, 2006 10:28:58 PM
    Subject: RE: Habib Bank v Central Bank of Sudan - L L Rs. 2006

    Dear Mr. Tim,

    The genuine debt is US$ 12 Mln and the accumlated interest is US$ 89 Mln almost seven times the debt. Is there any posibility in law or equity to reduce the accumlated interest to a reasonable sum?

    Tks & Kind Rgrds
    Ismat Abdel Gadir - LL.B
    Khartoum - Sudan
    Mobile:+249 9 126 40114

    [email protected] wrote:
    Dear Mr Gadir,

    Thank you for referring this matter to us. I have conducted a conflict check and we would be pleased to act, subject to dealing with some necessary client acceptance formalities. I have asked my colleague Rainer Evers to deal with these with you and to take an early look at the papers with me with a view to indicating in broad terms whether we think there are any plausible arguments that can be advanced in order to set aside this judgment. Thank you for your initial thoughts.

    Rainer will be in touch very shortly to give you an idea of costs. Assuming there is something of substance to be researched, I suggest we agree with you an initial cap on our research work and review, and then, if you authorise that work we can give a clearer indication of the likely cost of making an application to the Commercial Court.

    Kind regards,

    Tim House


    -----Original Message-----
    From: ismat hagelamin [mailto:[email protected]]
    Sent: 04 October 2006 15:15
    To: House, Tim:LT (LN)
    Subject: Habib Bank v Central Bank of Sudan - L L Rs. 2006
    Confidential

    Dear Mr. Tim,

    Pls take note that M/S Lovells Int'l have recommended you to us.

    Enclosed herewith the Judgment passed in favour of Habib Bank versus CBS that HBL is entitled to the sum of US$ 101,881,346.14.

    The O/S liability under the two L/Cs: 218 & 233 was US$ 14 Mln. 2 Mln US$ paid during the period from 1983 up to 1991. In our view the amount claimed by HBL was apparently excessive and the difference between the exact liability and the amount decreed is unreasonable. The difference is US$ 89 Mln.

    In view of the above mentioned could it be possible to contest against the Judgment in lieu of the difference between the exact O/S liability and the amount decreed? i.e. could it be possible to reduce the interest amount? Could you specify the percentage of success and the relevant costs?

    Your early reply 'd be highly appreciated.

    Tks & Kind Rgrds
    Ismat Abdel Gadir - LL.B
    Solicitor
    Khartoum - Sudan
    Mobile: +249 9 126 40114


    Date: Mon, 9 Oct 2006 13:05:35 -0700 (PDT)
    From: "ismat hagelamin" Add to Address Book Add Mobile Alert

    Subject: Habib Bank Ltd. v Central Bank of Sudan - LL Rs. 2006

    To: [email protected]

    H.E. The Governor
    Central Bank of Sudan

    Attn. Dr. Sabir Mohammed Hassan

    Dear Dr. Sabir,

    Enclosed the profiles of three UK solicitors specialized in banking litigation who 've sent their replies to me in lieu of the above mentioned lawsuit.

    Tks & Kind Rgrds
    Ismat Abdel Gadir Hagel Amin - LL.B
    Mobile: 09 126 40114


    Date: Sat, 7 Oct 2006 13:06:57 -0700 (PDT)
    From: "ismat hagelamin" Add to Address Book Add Mobile Alert

    Subject: Habib Bank Ltd. v Central Bank of Sudan - LL Rs. 2006

    To: [email protected]

    H.E. The Governor
    Central Bank of Sudan

    Attn. Dr. Sabir Mohammed Hassan

    Dear Dr. Sabir,

    Enclosed herewith a reply from Mr. Harddeep Nahal of Herbert Smith for your kind perusal.

    Tks & Kind Rgrds
    Ismat Abdel Gadir Hagel Amin - LL.B
    Mobile:09 126 40114


    Date: Thu, 5 Oct 2006 13:42:10 -0700 (PDT)
    From: "ismat hagelamin" Add to Address Book Add Mobile Alert

    Subject: Habib Bank Ltd. v Central Bank of Sudan - LL Rs. 2006

    To: [email protected]

    H.E. The Governor
    Central Bank of Sudan

    Attn. Dr. Sabir Mohammed Hassan

    Dear Dr. Sabir,

    On Sun. Ist Oct, 2006 Mr. Malako of the Legal Dept. has phoned me conveying your directive to set an initial cost regarding the potentiality for contesting the Judgment. After receiving the verbal instruction from Mr. Malako, which is not the normal practice for handling this issue, I've initiated my contacts on behalf of the CBS with Lovells Int'l and other Law Firms in this regard.

    The outcome of my contacts is that it's not easy to challenge the Judgment and this due to the acknowledgment of debt made by the CBS. In my view acknowledgment of debt at earlier stage by CBS and consecutive stages extended the limitation period. The only way, in my view, to challenge the Judgment is whether or not there is a possibility in law or equity to reduce the accumulated interest to a reasonable sum and this what I'm running after.

    Enclosed herewith my contacts with the Law Firms in UK and their responses for your information with a view to assist in taking your prompt decision. Meantime I hope that your excellency shall consider my endeavours.

    Tks & Kind Rgrds
    Ismat Abdel Gadir - LL.B
    Mobile: 09 126 40114

    Date: Tue, 3 Oct 2006 03:15:27 -0700 (PDT)
    From: "ismat hagelamin" Add to Address Book Add Mobile Alert

    Subject: HBL v CBS - LL Rs. 2006
    To: [email protected]

    H.E. The Governor,
    Central Bank of Sudan
    Attn. Dr. Sabir Mohammed Hassan

    Dear Dr. Sabir,

    In further to my emails of 25 & 29 Sept. regarding the above subject, pls take note that I've been contacted by Mr. Malako of the Legal Dept. Mr. Malako in a phone conversation requested me to prepare an initial costs for handling this lawsuit with a view to contest against the Judgment. I told him to forward to my e-mail address these instructions which, as he said, pursuant to the Governor's directives.
    Up to this moment I did not receive any written instructions from CBS part, but meantime I've initiated my contact with Lovells and others.
    In view of the above, I'm expected to receive a reply to my previous emails in order to be prepared to undertake such work.
    Tks & Kind Rgrds
    Ismat Abdel Gadir Hagel Amin - LL.B
    Mobile: 09 126 40114










    Date: Fri, 29 Sep 2006 11:43:26 -0700 (PDT)
    From: "ismat hagelamin" Add to Address Book Add Mobile Alert

    Subject: Habib Bank Ltd. v Central Bank of Sudan - LL Rs. 2006
    To: [email protected]

    H.E. The Governor
    Central Bank of Sudan

    Attn. Dr. Sabir Mohammed Hassan

    Dear Dr. Sabir,
    I've some remarks on the Judgment which 'll be summarized as follows:
    1- It's a default decree in that CBS did not appear before the said Court.
    2- The relationship between issuing and intermediary bank depends upon what the latter is called upon by the issuing bank to do. The rights and liabilities of intermediary banks, confirming or not, are governed by the terms of the instructions which they receive from the issuing bank on the one hand, and of their advice or notification to the seller in pursuance of such instructions on the other. As between the issuing bank and the intermediary bank the relationship is, unless otherwise agreed, that of principal and agent, so that, subject to any agreement to the contrary, when the intermediary bank has fully complied with its mandate it is entitled to reimbursement of any moneys it has properly paid.
    ( Gutteridge & Megrah's Law of Bankers' Commercial Credits - 8th edition, p 87).
    3- It's obvious that both L/Cs : 218 & 233 were deferred payment L/Cs i.e. payment had to be made after 180 days from B/L date, but the claimant violated the defendant's instructions when placing funds at Chase Manhattan pursuant to a request made by BdeP that payment be made in this way. His act made payment at sight in violation to the issuing bank instructions. In my view the claimant is not entitled to be reimbursed by the defendant.
    I’m so surprised that Central Bank’s official acknowledged the debt including the principal plus interest without paying attention to the fact that Habib Bank has affected payment at sight in violation to the issuing bank’s instructions that payment would have been effected 180 days from B/L date.
    I’ll be waiting to hearing your comment as to whether or not you welcome my intervention in this matter.

    Tks & Kind Rgrds
    Ismat Abdel Gadir Hagel Amin – LL.B
    Mobile: 09 126 40114


    Date: Mon, 25 Sep 2006 03:23:47 -0700 (PDT)
    From: "ismat hagelamin" Add to Address Book Add Mobile Alert

    Subject: Habib Bank Ltd. v Central Bank of Sudan - LL Rs. 2006

    To: [email protected]

    H.E The Governor,
    Central Bank of Sudan

    Attn. Dr. Sabir Mohammed Hassan

    Dear Dr. Sabir,

    I'd like to disclose that I'm a lawyer and gained significant know-how in the practice of banking as well as the law of banking.

    I've viewed the judgement passed in favour of Habib Bank Ltd. (attched). I'm so surprised that why your esteemed Bank didn't appear despite being summoned.

    I'm ready to put my significant experience in this aspect at your disposal to contest against this default decree. It's to be noted that I had previous contact with a reputable English Law Firm in London: Lovells International.

    I hope to hearing your comment.

    Tks & Kind Rgrds
    Ismat Abdel Gadir Hagel Amin - LL.B
    Mobile: 09 126 40114
                  

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