Unicredit Bank, London Branch
2023 EWHC 663
Type of Lawsuit: Beneficiaries sued Confirming Bank that alleged sanctions prohibited honouring complying demands.
Topics: Autonomy (Independence); Sanctions; Standby Letters of Credit; Statutory Interpretation; UCP600 Articles 4(a), 10(a), 15(b)
Parties:
• Applicants – AirBridge Cargo Airlines LLC and JSC Aurora Airlines
• Issuer – Sberbank Povolzhsky Head Office
• Beneficiaries – Celestial Aviation Services Ltd.
• Confirming Bank – UniCredit Bank, London Branch
Underlying Transaction: To secure lease obligations for civilian aircrafts.
LC: Seven UCP600 Standby LCs; subject to English law.
Decision: The High Court of Justice, Hancock, J., ruled in favour of Beneficiaries.
Rationale: Confirming Bank could not properly rely on UK or US sanctions to resist payment.
Factual Summary:
To secure lease obligations for civilian aircrafts, AirBridge Cargo Airlines LLC and JSC Aurora Airlines (collectively, “Applicants”), Russian companies, applied for and caused Sberbank Povolzhsky Head Office (Issuer) to issue seven standby letters of credit[[1]] in favor of Celestial Aviation Services Ltd. (Celestial-Beneficiaries), an Irish aircraft lessor.[[2]] The standbys were later confirmed by UniCredit Bank, London Branch (Confirming Bank),[[3]] were subject to English law and UCP600, and were payable in US dollars.
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