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Sanctions clauses in documentary credit transactions: a cautionary tale
In the current geopolitical climate, sanctions are increasingly used as a foreign policy tool and can have significant implications for contractual obligations in international trade. In Kuvera Resources Pte Ltd v JPMorgan Chase Bank, N.A. [2023] SGCA 28, the Singapore Court of Appeal held that a confirming bank could not deny payment to the beneficiary of two letters of credit (LCs) on the ground that its confirmations of the LCs included a contractual clause (Sanctions Clause) extinguishing the confirming bank’s liability as the underlying commercial transaction was allegedly caught by the sanctions laws of the US.
18 March 2024The implications of the novel “Audit Duty” on professional service firms: Part 2
In this Part 2, barrister and Chartered Banker Jacob J Meagher discusses the impact and application of the “Audit Duty” on professional service firms (PSFs) and others, as expressed in Rihan v Ernst & Young [2020] EWHC 901 (QB).
18 March 2024Hook, line … or sinker? Navigating dowry sales
When a company is facing financial hardship or challenging economic conditions, using a “dowry” to incentivise a quick sale of a business by auction may appear an attractive option to address existing difficulties. However, there are important issues for target directors, sellers and buyers alike to consider before executing a disposal of this nature. These include: directors duties, shorter timetables and fewer deal protections for buyers. This article reviews some points to consider as part of the decision-making process before embarking on a dowry sale.
18 March 2024Damages for the damnified? What DOES Law of Property Act s 104(2) mean?
Section 104(2) is frequently used to ease the conveyancing process when a mortgagee sells the security: it enables the mortgagee to pass good title to a purchaser even if the exercise of its power of sale is unauthorised, improper or irregular. The corollary of that power, the obligation to pay damages if a wrongful sale occurs, has, until recently, received little attention. This article highlights two recent cases, explains what we can learn from them, and sets out some thoughts on the remaining unanswered questions arising out of this provision.
18 March 2024A company’s objects: do they still matter?
In this article the authors consider why a company’s objects continue to be relevant despite recent legislative developments and the implications of s 31(2)(c) and s 31(3) Companies Act 2006 should a counterparty proceed with a contract outside the company’s objects before registration of a notice of amendment of the company’s objects.
18 March 2024Moveable transactions: Scotland v England: Round 1 – assigning receivables
Scottish moveable transactions law is currently outdated and much less useful in practice than the law in England and Wales. The Moveable Transactions (Scotland) Act 2023 (2023 Act) will bring Scots law up to date when it comes into force and will arguably move it ahead of the law south of the border. This article tests whether or not that is the case when assigning receivables.
18 March 2024ESG litigation in the context of financial services: a global gear change?
This article examines the way that ESG-related cases in the context of financial services have evolved over the past few years, and the themes emerging from the high number of court dismissals during 2023, which indicates that legal merits continue to be the prevalent factor.
18 March 2024Regulation 7(4): when is an entity “controlled” by a sanctioned person?
In this article Tom Leary explains the key decisions in the Mints litigation on issues of “control”, why the Court of Appeal’s approach to Reg 7(4) of the Russia (Sanctions) (EU Exit) Regulations 2019 is unsurprising given the genesis of its drafting, and the practical implications for practitioners.
18 March 2024Limited liability partnerships: authority to borrow and to give security
This article addresses two related practical issues which arise in acquisitions, restructurings and financing transactions where a limited liability partnership (LLP) is involved in the group structure. The first is the authority needed by a lender where an LLP is giving a guarantee of group companies’ liabilities and/or granting security. The second is the related point about charging the interests of a member in an LLP.
18 March 2024Significant Risk Transfer’s impact on the output floor under Basel III: the EU’s proposed panacea unveiled
The European Banking Authority, in its Basel III full implementation impact report11 found that European banks’ Tier 1 capital requirements would increase by 15% as a 1result of Basel III changes, with the proposals for an output floor being responsible for a 7.1% overall rise. In this article, the authors consider how significant risk transfer (SRT) transactions can be used to decrease a bank’s risk weighted assets (RWAs) in order to minimise their capital burden in light of increased capital requirements as a result of the output floor. Other capital requirements specific to securitisations are also considered.1 1
18 March 2024
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