Mr Justice Cresswell dismissed a summons by the defendant, Sonali bank, for a stay of proceedings and entered summary judgment for BCCHK.
Sonali, a Bangladeshi bank, issued a letter of credit for payment in Hong Kong by BCCHK, a Hong Kong bank part of the BCC group, on behalf of Sonali, in favour of the Hong Kong seller of goods purchased by a Bangladeshi importer. The seller presented documents to BCCHK who negotiated the documents and presented them to Sonali who failed to reimburse BCCHK for payment under the credit. BCCHK's liquidator claimed summary judgment for USdollars 1.3m ( pounds 800,000) due under 35 letters of credit.
Sonali sought a stay on the ground of forum non conveniens, submitting that Bangladesh was the appropriate forum since the proper law of the letters of credit was Bangladesh law and that BCCHK had already invoked the jurisdiction of the Bangladesh courts in respect of one letter of credit.
Sonali conceded that there was no defence to the claims save in seven instances where, under Bangladesh law, they were barred by limitation, and counter- claimed for sums due from other companies in the BCC group in excess of USdollars 6m ( pounds 3.8m) on the basis that the group of companies should be looked at as a single entity.
Mark Templeman (Norton Rose) for BCCHK; Ajmalul Hossain (Lucas Baron Jacobs) for Sonali.
MR JUSTICE CRESSWELL said by the application of common law principles, the contract between BCCHK and Sonali in each case was governed by the law of Hong Kong. Sonali requested BCCHK to add its confirmation to the credit. By doing so Sonali authorised BCCHK to negotiate against documents which appeared to be in accordance with the terms and conditions of the credit and undertook to reimburse BCCHK. Having confirmed the credit BCCHK was obliged to negotiate the documents. The credits contemplated that negotiation of documents presented by the Hong Kong beneficiary would take place in Hong Kong.
It would be wholly inappropriate to grant a stay on the ground of forum non conveniens because BCCHK founded jurisdiction as of right in accordance with the law of England. Sonali had not shown that Bangladesh was clearly or distinctly more appropriate. Sonali had no presence in Hong Kong and had declined to accept service of Hong Kong proceedings.
Sonali had no triable defence to the claims. The relevant contracts were not governed by the law of Bangladesh, but by the law of Hong Kong. The fact that BCCHK was a plaintiff and a defendant in actions in Bangladesh was not of sufficient weight to justify a stay. In deciding not to grant a stay, his Lordship had no regard to the submission that BCCHK would not obtain substantial justice in Bangladesh.
The alleged counter-claims did not involve BCCHK but were against other legal entities in the BCC group. The transactions the subject of BCCHK's claim were ordinary international banking transactions between BCCHK and Sonali and there was no basis for a stay pending the determination of Sonali's claims against other legal entities. Judgment would be entered for BCCHK in the principal sum claimed plus interest.
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