In Litasco SA v Banque El Amana SA [2025] EWHC 312 (Comm) Hutton DJ engaged (on an application for summary judgment) ia with an issue that one does not see all too often in litigation: a change in governing law under Article 3(2) Rome I; and with the application of Article 9 Rome I’s overriding mandatory law aka lois de police provision.
On the first issue, Litasco as claimant argue that the effect of a SWIFT message (SWIFT being an inter-bank electronic messages platform) was to change the applicable law for the relevant StandBy Letter of Credit – SBLC, into English law, pursuant to A3(2) Rome I, which permits the parties to “agree to subject the contract to a law other than that which previously governed it”.
[15] both parties seemingly agreed that “whether the SWIFT message was effective to make that change should be resolved as a matter of English law (whether as the putative applicable law, by reference to Article 10 of Rome I, or as the lex fori, which it said was supported by the Supreme Court’s analysis in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] 1 WLR 4117 at [33]).” In that para the SC held
on The Conflict of Laws, 15th ed (2012) observe, at para 32-036
Under a proper Rome I analysis however (reminder that Rome I is assimilated UK law) in my opinion there is CJEU authority for neither the lex fori approach nor the putative law approach (clearly post Brexit [Enka was a pre-Brexit case] there binding character of the CJEU is more complicated). In Nikiforidis a role for A10’s putative law was discussed viz the question of temporal application of Rome I and a role for said putative law on that issue was not the outcome.
For the specific claim at issue the question is arguably less relevant seeing as parties agree, therefore the determination of the lex causae to settle the effectiveness of the change arguable may a considered as having been done per Article 3(1) Rome I.
On the facts at issue, [22] the judge holds that advancing an argument that the lex contractus was not amended by the relevant SWIFT message, would not have a real prospect of success.
[23] ff deal with the issue whether Mauritian civil proceedings may be recognisable in England and have an impact on current claim. However [28] it is held that claimant in current claim did not submit to those proceedings and that as such they are clearly not recognisable for current purposes. [29] ff ff hold the same viz relevant criminal proceedings.
[43] ff then discuss the application of the Ralli Bros principle and lois de police. I have discussed in my review of Banco San Juan Internacional Inc v Petroleos De Venezuela SA why in my opinion the application of lois de police may be considered to have been exhaustively regulated by Rome I, hence displacing any application of Ralli Bros. The alternative view is that Ralli Bros continues to apply as a principle of the applicable lex contractus, English law.
In current case, the judge fully conflates Article 9 Rome I with Ralli Bros, taking [6] it seems defendant’s counsel cue:
BEA instead relies on orders made by the Mauritanian courts as providing a defence to Litasco’s claim, originally pursuant to the rule in Ralli Brothers v Compania Naviera Sota y Aznar [1920] 2 KB 287 (CA) and also pursuant to Article 9(3) of the Rome I Regulation but in the skeleton for this hearing, Mr Power (counsel for BEA) indicated that BEA was content to proceed on the basis that Article 9(3) adds nothing to the Ralli Bros principle (which he noted was the view taken by Cockerill J in Banco San Juan Internacional Inc v Petroleos de Venezuela SA [2021] 2 All ER (Comm) 590 at [118]).
– this is a similar route as the one taken in Celestial Aviation Services, and while the substantive outcome may be the same as if one had pursued an Article 9 Rome I analysis, the shortcut still does not convince me.
[84] the conclusion is that a Ralli Bros defence has no reasonable prospect of success and summary judgment is granted.
An interesting judgment.
Geert.
European Private International Law, 4th ed. 2024, 3.90.
https://x.com/GAVClaw/status/1891417588841750955