CRF I Limited v Banco Nacional De Cuba & Anor.

Contractual prior consent to an assignment need not take a formal form unless the contract requires one. Consent may be given conditionally, with the condition taking effect subsequently, provided the required documents and formalities are later satisfied.

Under Cuban law, Banco Nacional de Cuba had capacity and actual authority to consent to assignments of pre-1997 debts which it was empowered to register, control, service and deal with. It lacked capacity to consent on behalf of Cuba to an assignment of a Cuban State guarantee. Internal signature requirements governing the bank’s own banking operations did not apply to consent which merely permitted an existing creditor to assign its rights.

CRF I Limited claimed more than €70 million from Banco Nacional de Cuba and the Republic of Cuba under two 1984 loan agreements and a Cuban State guarantee. CRF had acquired the relevant rights from ICBC Standard Bank.

The defendants challenged jurisdiction under CPR Part 11. They argued that the assignments were invalid, that the contractual jurisdiction and immunity waivers did not pass to CRF, that sovereign immunity applied, and that service out had not been established. The central issues were whether prior consent to assignment had been given, whether Banco Nacional de Cuba had capacity and authority to give it for itself and Cuba, and whether the contractual and statutory requirements had been satisfied.

1. Prior consent. The communications beginning with the request of 8 May 2019 and culminating in the email of 13 June 2019 constituted prior consent to the assignment of the agreements and the guarantee, subject to provision and proper legalisation of specified documents. The consent preceded the assignment in fact; cosmetic backdating did not alter that conclusion. The condition was properly analysed as a condition subsequent, but the distinction from a condition precedent made no practical difference because the documentary requirements were fulfilled.
2. Capacity. Banco Nacional de Cuba lacked capacity after 1976 to consent on behalf of Cuba to an assignment of a State guarantee. The relevant legislative history showed that responsibility for State guarantees had moved to the State Finance Committee and later the Ministry of Finance and Prices. Banco Nacional de Cuba did, however, have capacity under Article 7(ll) of Decree-Law 181/1998 to handle and consent to assignments of pre-1997 debts of the Cuban State and the bank. Article 56 of Decree-Law 192/1999 did not alter that conclusion.
3. Authority and signatures. The President of Banco Nacional de Cuba could delegate authority to managers and officials under Decree-Law 181/1998. The relevant officials were authorised to act for the Foreign Debt Office. Consent to an assignment was not a banking operation creating an obligation within Articles 12 or 15(l) of the BNC Rules, so two signatures were not required for the 13 June consent. Any later internal defect in the materialisation documents could not invalidate the earlier outward-facing consent.
4. Contingent issues. Banco Nacional de Cuba would alternatively have ratified the assignments through the conduct of its President and the working group considering the letters before action. Ratification by Cuba was not established. Apparent authority failed because there was no representation by Cuba or Banco Nacional de Cuba on which CRF had relied. The 2020 refusal of consent was not unreasonable because the criminal investigation provided a proper basis for refusal; the hypothetical 2019 withholding issue did not arise.
5. Disposition. The assignments of the agreements were valid. CRF could rely on the jurisdiction, service and immunity provisions. The court had jurisdiction over the debt claims, Banco Nacional de Cuba was not immune, and service out on it was valid. The guarantee claim against Cuba was not established on the basis of consent by Banco Nacional de Cuba.