Vatche Manoukian v Societe Generale De Banque Au Liban Sal & Anor.

Under Lebanese law, a bank account contract may confer an enforceable right to require an international transfer. A term allowing a customer to request a transfer is not merely a right to ask where the contract, its context and related provisions indicate an obligation to perform. Established banking custom may be incorporated into the contract and requires valid transfer requests to be executed, subject to customary requirements such as sufficient funds, lawful beneficiaries and compliance checks. A general concern about liquidity, a banking crisis or a possible run on banks is not a sufficient discretionary reason to refuse. A tender and deposit in Lebanon does not satisfy an obligation to transfer funds abroad.

The claimant held foreign-currency accounts with two Lebanese banks and sought transfers of substantial sums to accounts in Switzerland. The banks refused the requests, relying on Lebanon’s financial crisis, the absence of capital-control legislation and their alleged lack of any contractual, statutory or customary obligation to transfer the funds abroad.

The banks also relied initially on the Lebanese tender and deposit procedure under Article 822 of the Lebanese Code of Civil Procedure. The central issues were whether the account contracts or Lebanese banking custom created an international transfer right and, if so, whether the tender and deposit procedure answered the claimant’s claim for specific performance.

1. Contractual transfer right. The claim succeeded on the primary contractual case. As to SGBL, the clause giving the account holder a right to request a transfer to another bank conferred a right to have the transfer made. The clause could not be reduced to a right merely to make a request, particularly because the conditions identified specific circumstances in which foreign-currency transfers might be unavailable and did not reserve a general discretion to refuse.
2. As to Bank Audi, a term excusing delay in performing a requested transfer while compliance verification was undertaken presupposed an obligation to perform. The parties’ joint intention and reasonable expectations also supported an international transfer right. Any ambiguity in the consumer contracts fell to be resolved in the claimant’s favour under Article 18 of the Lebanese Consumer Protection Law. Bank Audi’s exclusion clause could not avail it under Article 26, although reliance on that clause was ultimately withdrawn.
3. Custom. The court accepted the claimant’s evidence and the relevant Lebanese authorities and writings. International transfers formed part of ordinary banking cashier services. The custom required a bank to execute a valid transfer request after the usual compliance checks and did not include a loose exception for a bank’s concern that performance might cause a run on banks or threaten the banking system. Any force majeure argument was a separate route and was not advanced.
4. Under Article 371 of the Lebanese Code of Obligations and Contracts, the established custom was incorporated into the contracts because it was not excluded by their express terms. The court did not determine the alternative general transfer-right issue, but observed that the constitutional and statutory provisions relied upon did not independently create such a right.
5. Tender and deposit. The banks’ deposits with Lebanese notaries under Article 822 did not comply with an obligation to transfer the money out of Lebanon. The tender and deposit had to match the object of the obligation and were therefore ineffective. The banks were ordered to execute the requested international transfers. No finding of bad faith was made against SGBL.

not stated in the judgment.