Knowledge Counsel London
"…payment under the letters of credit was in connection with the arrangements, namely the aircraft leases, whose object or effect is making aircraft available to a person connected with Russia or for use in Russia."
SANCTIONS
The Supreme Court has clarified the impact of the Russian (Sanctions) (EU Exit) Regulations 2019 and section 44 of the Sanctions and Anti-Money Laundering Act 2018 (“SAMLA”) in relation to letter of credit payments, aircraft leases and sanctioned entities. Irish companies leased civilian aircraft to two Russian airlines. Letters of credit (“LOC”) were provided as security for the lease obligations. Payment under the LOC was to be made by the London branch of a German bank, UniCredit. The lessors terminated the leases but the aircraft were not returned, so the lessors demanded payment under the LOC. When UniCredit did not pay (but applied for a licence to do so), the lessors commenced proceedings. The Supreme Court confirmed that the sanctions regulations suspended the obligation to pay under the LOC pending a licence being obtained. UniCredit were prohibited from paying until it had a licence to do so and as a result, statutory interest would not accrue in that time. Although unnecessary to resolve the appeal, the court also confirmed that section 44(2) of SAMLA protected UniCredit from an action for recovery of the debt because they reasonably believed that non-payment was in compliance with the sanctions regulations.
CONTRACT INTERPRETATION
The High Court has held that where one party indicated that it “had no objection in principle to agreeing an extension to the assignment”, there had not been a concluded agreement to extend a deadline under the settlement agreement. Giving the words their ordinary and natural meaning resulted in a conclusion that the party was willing to consider the extension but further details needed to be agreed. The impact of there being no agreed extension was that the respondent did not have standing to bring a professional negligence claim because he had been doing so pursuant to an assignment from the insurers as agreed in the settlement agreement. He was given a defined period of time to join the insurers (where the cause of action vested) to the proceedings or the claim would be struck out.
Kounis v Critchlow and Associates Ltd [2026] EWHC 693 (KB), 25 March 2026
LANDLORD AND TENANT
The Chancery Court has confirmed that a badly fire-damaged house could still constitute a “house” for the purposes of the Leasehold Reform Act 1967. The question arose in a dispute between the landlord and tenant; the former served notices and commenced forfeiture proceedings, the latter served a notice seeking to enfranchise the lease. The structure retained some identity as a house and had not been abandoned. The ruined status was only temporary. The building also constituted a “dwelling” under section 168 of the Commonhold and Leasehold Reform Act 2002 and as a result the forfeiture notices were invalid because there had not been a prior determination of the relevant breaches.
COMPANIES
The Chancery Court has upheld a shareholder’s unfair prejudice petition against the other shareholder of the company. The court found that the defendant had committed a number of different acts which resulted in unfair prejudice to the claimant. These included filing annual accounts that he knew to be false, misappropriated significant sums of the company’s money, diverted debt recovery monies to his own account and issued a claim without company board approval. The defendant was ordered to buy out the claimant’s shares.
Chambi v Aristodemou and another [2026] EWHC 599 (Ch), 20 March 2026
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Commercial Disputes Weekly – Issue 278
