- Court of Appeal rejects $US 150m borrower’s attempt to rely on UCTA 1977 (African Export-Import Bank v Shebah Exploration & Production)
- Original news:
- What are the practical implications of this case?
- What was this case about?
- What did the court decide?
- What is the significance for the loan market generally?
- Could use of any LMA form – facility agreement or other document – ever amount to dealing on written standard terms?
- Case details
Dispute Resolution analysis: Rebecca Zaman, barrister at 3 Verulam Buildings, considers the case of African Export-Import Bank v Shebah Exploration & Production Company. Lenders will welcome the Court of Appeal’s judgment, which has upheld an order for summary judgment for a sum of more than $ US150m owed under a facility agreement. The court dismissed as unarguable the borrowers’ attempt to use section 3 of the Unfair Contract Terms Act 1977 (UCTA 1977) to make a ‘no set off’ clause in the facility agreement unenforceable, and thus the borrowers were prevented from setting off their liability for $US 150m against a counterclaim for $US 1b.
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