PAST LIABILITIES OF SERBIAN BANKS AND THEIR IMPACT O N THE PRIVATISATION PROCESS: THE SERBIAN APPROACH
pursuant to the Paris and London Club Law considerably
diluted the minority shareholders' stake in Serbian banks,
causing these shareholders to resort to court proceedings
before the Federal Constitutional Court of FRY (breach of
constitutional right to property and the right to equality
before the law). In its decision dated 26 January 2003, the
constitutional court rejected the claims of petitioners, finding that such debt-to-equity swaps were in accordance with
the constitution. It should also be noted that, due to political changes, and regardless of the principle of ne bis in idem,
the Paris and London Club Law may still be subject to
potential constitutional challenges with respect to its conformity with the constitution of Serbia. The constitutional
court of Serbia has never ruled on the conformity of the
Paris and London Club Law with the constitution of Serbia,
and it is possible that a constitutional challenge to this Law
may indeed be admitted by this court, regardless of the rule
of ne bis in idem, which may be deemed inapplicable in this
32 Pursuant to art 5 of the Paris and London Club Law.
33 Pursuant to art 8 of the Law on the Deposit Insurance
Agency (Official Gazette of RS 61/2005).
LETTERS OF CREDIT
TRAFIGURA BEHEER BV V KQOKMiN BANK CO [2006] EWHC 1921 (COMM) (FIELD J)
An application for a post-trial anti-suit injunction restraining
proceedings brought in Korea by the defendant bank in connection with an L/C was granted by the High Court.
Company T was the beneficiary of an L/C issued by Bank
K (a Korean bank) in respect of the sale and shipment of
cargo. The buyer of the cargo went into liquidation after
taking delivery but before paying for the L/C, Bank K was
not holding a complete set of bills of lading and thus had no
security interest in the cargo and no right of action against
the carrier. Company T had taken advantage of a clause in
the L/C which allowed it to present a letter of indemnity
instead of bills of lading. When bills of lading were eventually presented to Bank K they were marked null and void as
the voyage had been completed.
,
,
The claims surrounding the L/C had been the subject
of two previous High Court judgments ([2005] EWHC 2350
(Comm) (Cooke J) and [2006] EWHC 1450 (Comm) (Aikens
J)). Cooke J had found that England was the appropriate
forum as between Korea and England for the determination
of the issues between the parties and that the L/C was
governed by English law.
Bank K subsequently filed proceedings in Korea setting
out alleged obligations of and alleged unlawful acts of
Company T under Korean law. Company T sought to injunct
these Korean proceedings.
est in the foreign proceedings. If there is no contractual
reason to prevent suit abroad, there must be proceedings
in England which require protection.
(5) There must be a clear need for protection of the English
proceedings.
.
(6) No injunction should be granted if it would deprive
the claimant in the foreign action of an advantage in that foium of which it would be unjust
to deprive him (Snia v Lee Kui Jak [1987] AC 871).
(All per Cooke J in [2005] EWHC 2350 (Cornm) at para 42)
DECISION
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International Inc v PT Pan Indonesia Bank Ltd TBK [2005] 2
-
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'PRINCIPLES TO DETERMINE WHETHER TO GRANT A N ANTI-SUIT
INJUNCTION
(1) Whether the pursuit of foreign proceedings is 'unconscionable'. The injunction is a personal remedy for the
wrongful conduct of another party.
(2) Whether the proceedings are brought in breach of an
exclusive jurisdiction clause save in circumstances where
the Brussels Regulation applies.
(3) The appropriateness of the forum is only one factor, in
assessing whether to grant an injunction and is easily
overridden by other considerations.
(4) The English court must have a sufficient legitimate inter-
English law was the governing law of the L/C because
England was the country most closely connected with
the underlying sale contract (Marconi Communications
-
All ER (Comm) 325).
Even if the Korean court held that the governing law of
the L/C was Korean law, the question in issue concerned
the construction of a document in the English language.
It was not suggested that under Korean law words in a
commercial agreement would be given other than their
plain and ordinary meaning.
The English court had a strong legitimate interest to
protect its proceedings. It was vexatious for Bank ;K to
attempt to persuade the Korean court to apply Korean
It would be unjust for Bank K to turn its back on the
outcome of the English proceedings and to attempt to
prosecute a claim in Korea in which it would invite the
Korean court to find that (a) the L/C was governed by
Korean law; and (b) the law governing its tort claims was
different from the law that applied to the background
contractual relationships, namely English law.
The injunction would be effective as Bank K had a registered place of business in England and carried on business here through a wholly owned subsidiary.
Butterworths Journal of International Banking and Financial Law - September 2006
Jonathan Lawrence
Kirkpatrick & Lockhart Nicholson GraJiam LLP
jlawrence@klng.com / ivwio.klng.com