The Court of Appeal has held that payment under standby letters of credit (LCs) issued in connection with the leasing of aircraft for use in Russia was prohibited by UK sanctions regulations.
In doing so, it took a different view to the Commercial Court as to the interpretation and scope of the relevant statutory provisions.
The decision is an important one for those navigating UK and other sanctions regimes. It highlights that the purpose of UK sanctions legislation is of central importance and that the licencing regime has been adopted to provide exemptions where appropriate.
The Court of Appeal’s judgment is also significant for those who deal with LCs, whether as issuing/confirming banks or as beneficiaries.
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Court of Appeal considers impact of sanctions on payment obligations under letters of credit
Published on 2024/07/18