The Gazette 1986

g a z e t t e

s e p t e m b e r 1986

8. In order to obtain interim or interlocutory relief against a bank it will be sufficient to adduce evidence from which the only realistic inference is one of fraud. 9. In the case of a letter of credit the fraud exception does not extend to fraud to which the seller or the beneficiary is not party. Similarly, it should follow that the fraud exception may not be relied on to escape payment on the bond where the beneficiary is not party to the fraud. 10. There is jurisdiction in an appropriate case to grant a mareva injunction in respect of the proceeds of the bond in the hands of the beneficiary. But, such an injunction may not be granted where the bond specifies a foreign country as a place of payment. • Footnotes 26. 128 S.J. 282; 'The Times', February 28, 1984. The judgment of Keanc J. was delivered 8 days earlier. 27. 'The Times'. July 18, 1984; 'The Financial Times'. July 25, 1984. (Court of Appeal: Aekner, Slade I..JJ. and Sir John Megaw). 28. See Siskina -v- Distos S.A. [1979] A . C. 210; [1977] 3 All E.R. 803; The Chief Constable of Kent and Ors - I 1I983| I Q B 34; [1982] 3 All E.R. 36. The decision of the House of Lords in the Siskina case was recently considered by Finlay C.J. in Serge Caudron and Others -v- Air Zaire and Aer Lingus and Aer Rianta, Supreme Court, unreported, 26 April 1985 (which was a case concerning order 11, rule I (g) of the Rules of the Superior Courts relating to service out of the jurisdiction). See also David Bean, injunctions ( 3rd ed., 1984) pp. 4-6. 29. The two other causes of action were in agency and contract. In the Hihernia Meats case, Keane J. also adverted to the possibility of the plaintiffs recovering sums paid from the Irish bank as customer and banker (where payment is made pursuant to a demand which to the knowledge of the hank at the time of payment is fraudulent). 30. It has been suggested that this statement could only mean that " a bank must invite, or ask its customer to invite the comments of the foreign party to the underlying contract and the bank must then assess the response or lack of response. All this must be done urgently after demand has been ma d e ." See " T h e C o u r t s ", Banking Wo r l d, October 1974, p. 49. It is elsewhere submitted, correctly, in the writer's opinion, that such interpretation is incorrect. " T h e Court of Appeal's judgment merely identifies how difficult it will be for the customer/seller to establish the fraud exception. So much so, that even where the facts of the case strongly suggest fraud, the court will be reluctant to make a finding to that effect where the overseas buyer has not been given an opportunity to answer the allegations made against h i m . " Graham A. Penn, " P e r f o r ma n ce Bonds: are bankers free from the underlying contract?" [1984] J.B.I.. 132 at 134 and 135. 31. [1975] A . C. 39:; Approved in Campus OH and Others -v- Ministrv for Industry and Energy and Others (No. 2) [1984] I. R. 88: |I9841 M K M 45. See I ( W Wvlie. Irish I and la w (First Supplement) (1975-1980) para. 3.133.

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ANSWER: We could try to be funny and say it was to let the bank drafts in. But the truth is it's just the way we operate. Personal, attentive service at all times. Total access to the manager. Longer hours than most banks. And higher interest on deposits. They may sound like small things. But when you add up the little things we do and most banks don't, you'll understand why our

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