Today the Court of Appeal (Lord Justice Baker, Lady Justice Rose and Sir Bernard Rix) unanimously upheld the first instance judgment of Professor Andrew Burrows QC that nothing in the terms of JP Morgan’s depository agreement with the Federal Republic of Nigeria precluded or excluded the banker’s Quincecare duty of care.
The FRN claims $875,740,000 paid away in three tranches by JPM in 2011 and 2013 in circumstances in which it alleges JPM was on notice that the payment instructions were part of a fraudulent and corrupt purchase of an oil production licence. Professor Andrew Burrows QC rejected JP Morgan’s application for strike out / reverse summary judgment, having considered each of the clauses relied upon by JPM, rejecting the contention that the duty had been excluded and then going further and grasping the nettle to hold that he could now decide the construction issues against JPM.
The Court of Appeal rejected JPM’s appeal on every point. Rose LJ gave the lead judgment with which Baker LJ and Sir Bernard Rix agreed. Rose LJ held that the Judge had correctly applied the law on construction of contracts, had considered the contract as a whole and in its commercial context and that none of the terms, exclusions, and indemnities relied upon by JPM had the effect of excluding the Quincecare duty. Rose LJ considered it unhelpful to speak of the Quincecare duty in terms of a core duty not to pay, and a secondary duty to inquire, but was clear that the precise scope of the Quincecare duty will turn on the particular facts of each case and may involve more than a duty only to make inquiries of the bank’s customer.
The judgment is here.
Roger Masefield QC and Richard Blakeley appeared for the successful Federal Republic, instructed by Reynolds Porter Chamberlain LLP.