The Gazette 1986

accordingly, would not be enforced. In the leading Irish case, Namlooze Venootschap de Faam -v- Dorset Man- ufacturing Co.," in pursuit of an agreement a Dutch firm supplied a Dublin company with goods, which were to be paid for in guilders. Payment of foreign cur- rency to anyone outside of the sterling area was forbid- den by a war-time exchange control regulation, subject to the Minister's consent to make the payment. The Dublin company had got such consent to pay the equiv- alent of £5,419 in guilders within a specified time. However, the total value of what was bought was £7,161, and the equivalent of £4,038 in guilders was paid over before the time limit expired. The Minister refused his consent to any further payments. Dixon J. declined to order that the defendants pay over the outstanding amount; and he refused even to give a declaratory judg- ment that that amount was owing although it could not at that time be paid in guilders. The court would not make an order "the legal effect of [which] would be to put the plaintiffs in a position to secure payment of the amount in question and it would thus, even if indirectly, compel the defendants to do an act prohibited by law for the time being in force." 12 There are special circumstances, however, where some legal effect will be given to such contracts. Of particular relevance is whether at the time of the making of the contract the party seeking enforcement or recovery under it realised that exchange control was being violated; and if he or she was not aware of that, whether Central Bank consent was sought on becoming so aware. In the Swiss Bank Corporation case, when the parties consid- ered that they had broken exchange control they sought Bank of England approval, but were refused. However, it was held there that the regulations in question had not been broken. In Shelly -v- Paddock," where, without realising that she had done so, the plaintiff made a contract contra- vening exchange control, the Court of Appeal gave some effect to that contract. The plaintiff agreed with the defendants to buy a house in Spain, paid a deposit of £80 cash, and later paid the balance of £9,500 into the defendant's joint bank account in England. It transpired that the defendants had no title to the house in Spain, and had defrauded the plaintiff. But the entire trans- action was in breach of exchange control. Nevertheless, she sought damages from the defendants for fraud. It was held that in these circumstances she should get TO EMPLOY OR TO BE EMPLOYED? Confidentiality Speed Minimisation of Expense Practitioners should note that the Society maintains a comprehensive and easily acc- essible register of solicitors in search of employment. Those seeking employment and those offices with posts to be filled are invited to contact, confidentially, the Edu- cation Officer, Mr. Albert Power, The Incorporated Law Society, Blackball Place, Dublin 7.

damages. According to Lord Denning, M.R., "It is said that . . . no person can recover on a trans- action which is illegal [and that the plaintiff] founds her cause of action upon an illegal act . . . [but the defendants] were swindlers right from the beginning who dishonestly obtained £9,500 from [her]. In those circumstances, . . . the principle stated . . . does not apply. There are some cases where a person has not been able to recover when he has been guilty of evading the exchange control regulations, [but] in these cases both parties were participating in the illegal act and there was nothing to choose between them. But it is altogether different when the parties are not in pari delicto . . . It is better to allow [the plaintiff] to recover here rather than to allow the [defendants] to remain in possession of their unlaw- ful gains . . . these parties are not in pari delicto. " I4 In none of the above-mentioned instances was it asserted that the contract in question was governed by a foreign law. Nor did the defendants in them raise Article 8 (2)(b) of the Bretton Woods Agreement. 2. Transnational Contracts and the Bretton Woods Clause Where the parties to the circumstances of the contract are not entirely domestic but have a significant inter- national element, International Law comes into the picture in several ways. Public International Law imposes limits on State's criminal jurisdiction; there must be a sufficient real connection between the act pro- hibited and the proscribing State. 15 Where one party to the contract is abroad and the contract is substantially performed abroad, then the contract is most likely governed by a foreign law and not Irish Law. 16 It was partly to overcome difficulties posed by Public Inter- national Law and Private International Law that Article 8 (2)(b) of the Bretton Woods Agreement 17 was adopted. According to it, "Exchange contracts which involve the currency of any member of [the International Monetary Fund] and which are contrary to the exchange control regulations of any member maintained or imposed consistently with this Agreement shall be unenforce- able in the territories of any member." The relevance in this clause to Irish law is that in 1957 Ireland became a member of the International Monetary Fund when it adhered to the Bretton Woods Agreement; and by virtue of Section 3 (8)(c) of the Bret- ton Woods Agreement Act, 1957, the provisions of Article 8 (2)(c) above "have the force of law in the state." Accordingly, that clause is now part of Irish domestic law. The English Court of Appeal has held that Article 8 (2)(b) supplants the general principles of international comity and international public policy as regards exchange contracts; and that the effect of foreign exchange regulations on contracts which are the subject of dispute in the English courts "is regulated not by the several rules of . . . conflict of laws, but by . . . statute, namely the Bretton Woods Agreement Act." 18 The Court of Appeal has also held that where a contract is unenforcible under Article 8 (2)(b) but this defence is not raised, the court nevertheless has a duty to apply the

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