English Court Reverses Celestial; UniCredit Right to Refuse Payment

In a high profile case involving standby letters of credit issued in connection with aircraft leases to Russian airlines and the applicability of sanctions regulations, England’s Court of Appeal has reversed a March 2023 decision of the Commercial Court in London and determined that the London branch of German bank, UniCredit, as confirming bank was justified to deny payment under the standbys.

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As previously reported in DCW, the Commercial Court in London decided in favour of Irish LC beneficiaries Celestial Aviation Services and Constitution Aircraft Leasing who had made credit-conforming demands on UniCredit, London branch for USD 69 million under standby LCs issued by Russia’s Sberbank.