The Court of Appeal has handed down its judgment in NIDCO v Banco Santander. NIDCO had sought enforcement by way of summary judgment of four letters of credit worth over US$38 million issued in its favour by Santander. Although previously ordered by Knowles J. in the Commercial Court to pay NIDCO’s demands, the bank appealed, alleging that the High Court had applied the wrong test and that the demands made by NIDCO were fraudulent. The Court of Appeal dismissed the bank’s appeal, holding that even if the test applied in the Commercial Court was too lenient, there was no evidence to support the bank’s allegations of fraud in relation to the demands. The judgment clarifies the law as to the proper test to be applied on summary judgment applications by beneficiaries under letters of credit.
Hugh Saunders of 4 New Square, led by Anneliese Day QC of Fountain Court, represented NIDCO, instructed by Simon Tolson and Claire King of Fenwick Elliott LLP.