FINANCE LITIGATION UPDATE – JULY 2022 11 unsuccessfully1 and the claim therefore proceeded to trial. Ultimately, Foxton J dismissed the claim, concluding that the Bank had discharged its obligations by depositing the Cheques in accordance with Lebanese law. This article focusses on why Lebanese law was held to apply. Applicable law: Rome I Foxton J was asked to consider two key questions: 1. Did the parties make an implied choice of Lebanese law under Article 3 of Rome I (which provides that parties have the freedom to choose the governing law of their contracts, either expressly or impliedly provided that for the latter, "the contract as a whole points ineluctably to the conclusion that the parties intended it to be governed by that law"2)? 2. Could Mr Khalifeh rely on Article 6(1) of Rome I to argue that English law applied? Was there an implied choice of Lebanese law? Foxton J held that the parties had impliedly chosen Lebanese law to govern the terms of the personal USD account for the following key reasons: 1 Bilal Khalifeh v Blom Bank SAL [2020] EWHC 2427 (QB). At the jurisdiction hearing (for reasons restricted to a confidential schedule), Master Davison found that Mr Khalifeh was domiciled in England at the time of the conclusion of the contract (the Recast Brussels Regulation refers to domicile rather than habitual residence). He also found that the Bank did direct its activities to the UK at the relevant time (although it seems the contrary was not seriously argued) and that the contract fell within the scope of these activities. Although these issues were being considered from a jurisdictional perspective (and on a summary basis), the difference between these conclusions and those which were reached at trial is notable. • The account was opened in Lebanon by a Lebanese national with a Lebanese bank, whose obligations were principally to be performed in Lebanon; • An Arabic-language document entitled "General Agreement for Opening and Operating Creditor Accounts" contained an express reference to an agreement to comply with and facilitate the enforcement of specific provisions of Lebanese law; • The aforementioned General Agreement contained an asymmetric jurisdiction clause providing that Mr Khalifeh could only sue the Bank in Beirut; and • A securities account, opened at the same time as the personal USD account, was subject to an agreement which was expressly governed by Lebanese law, which agreement regulated the position of the personal USD account in certain respects (and, pursuant to the aforementioned General Agreement, both accounts were treated as "chapters of one single and indivisible account"). Whilst there was some debate as to whether the jurisdiction clause in the General Agreement was exclusive or not, Foxton J held that he would have reached the same conclusion even if the clause had been non-exclusive (albeit it would have carried less weight), and, in fact, would have reached the same conclusion had there been no jurisdiction clause at all3. Could Mr Khalifeh rely on Rome I, Article 6(1)? Article 6(1) of Rome I provides that a consumer contract shall be governed by the law of the country of the consumer's habitual residence provided that the trader: "(a) pursues his commercial or professional activities in the country where the consumer has his habitual residence, or (b) by any means, directs such activities to that country or to several countries including that 2 Lawlor v Sandvik Mining and Construction Mobile Crushers and Screens Ltd [2013] 2 Lloyd's Rep 98 3 The parties relied on Section 3(3)(a) of the Contracts (Applicable Law) Act 1990, which provides that the Report on the Convention on the law applicable to contractual obligations is admissible when interpreting provisions of the Rome Convention. The report states that a contractual choice of forum "may show in no uncertain terms that the parties intend the contract to be governed by the law of that forum". It also states that references in a contract to specific provisions of a particular legal system may establish an implied choice of that legal system as the applicable law.
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