DCW Updates
DCW Monthly: December 2024
We’re thrilled to share the newest edition of DCW’s premium monthly content. This month’s highlights include: * Five
5 min read
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First Modular Gas Systems Ltd. v.
Citibank Europe PLC [2024]
[2024] IEHC 1 [Ireland]
Type of Lawsuit: Applicant renewed request for injunction against Confirming Bank.
Topics: Abuse of Process; Autonomy; Independence; Breach of Contract; Fraud; Injunction; Letter of Credit; Res Judicata
Parties:
• Plaintiff/Principal/Applicant – First Modular Gas Systems Ltd.
• First Defendant/Confirming Bank – Citibank Europe PLC
• Second Defendant/Supplier/Beneficiary – Bosai Energy Technology Corp.
• Third Defendant/Issuer – Access Bank PLC
• Contractor – Ennovate Consultants Inc.
Underlying Transaction: Supply of parts and gas for a plant in Nigeria.
LC: UCP600 LC for unspecific amount; silent as to choice of law.
Decision: The High Court of Ireland, Mulcahy, J., rejected the injunction request.
Rationale: Renewed application for LC injunction refused where new allegations were hearsay evidence gathered with benefit of first judgment, failed to meet evidentiary burden, and could nevertheless be rejected on abuse of process grounds as a breach of contract action and damages would be a sufficient remedy.
Citibank Europe PLC [2024]
[2024] IEHC 1 [Ireland]
Type of Lawsuit: Applicant renewed request for injunction against Confirming Bank.
Topics: Abuse of Process; Autonomy; Independence; Breach of Contract; Fraud; Injunction; Letter of Credit; Res Judicata
Parties:
• Plaintiff/Principal/Applicant – First Modular Gas Systems Ltd.
• First Defendant/Confirming Bank – Citibank Europe PLC
• Second Defendant/Supplier/Beneficiary – Bosai Energy Technology Corp.
• Third Defendant/Issuer – Access Bank PLC
• Contractor – Ennovate Consultants Inc.
Underlying Transaction: Supply of parts and gas for a plant in Nigeria.
LC: UCP600 LC for unspecific amount; silent as to choice of law.
Decision: The High Court of Ireland, Mulcahy, J., rejected the injunction request.
Rationale: Renewed application for LC injunction refused where new allegations were hearsay evidence gathered with benefit of first judgment, failed to meet evidentiary burden, and could nevertheless be rejected on abuse of process grounds as a breach of contract action and damages would be a sufficient remedy.
Factual Summary:
To support manufacture and delivery of parts for a plant based in Nigeria, First Modular Gas Systems Ltd. (Principal/Applicant), a Nigerian company, applied for and caused local Access Bank PLC (Issuer), to issue a UCP600 letter of credit in favour of Bosai Energy Technology Corp. (Supplier/Beneficiary), a Chinese company. Citibank Europe PLC (Confirming Bank), registered in Ireland, added its confirmation. The LC was also amended 12 times to increase its value.[[1]] Supplier/Beneficiary was engaged by Ennovate Consultants, Inc. (Contractor), a Canadian company, that Principal/Applicant had contracted for installation works. By contract, Supplier/Beneficiary was to ship goods on Cost and Freight (CFR) terms.
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