CRF 1 Limited v Banco Nacional de Cuba & Anor

Where a bank’s governing framework delegates authority to a manager within the manager’s functional remit, later signature rules conferring authority for specified transactions do not necessarily restrict that existing delegation. A manager’s consent to an assignment may therefore bind the bank despite non-compliance with a separate two-signature provision.

On appeal, the degree of deference applied to findings about foreign law depends on the evidential context. Contractual notice provisions allowing contact details to be designated from time to time may be satisfied by a later designation made under the clause, without formal contractual variation where no formality is specified.

BNC was debtor under two English-law loan agreements containing provisions requiring its prior consent to assignment and specifying contractual methods for communications. By 2019, the debt had been assigned to CRF, following an email from BNC’s Manager of the Foreign Debt Office accepting the assignment in principle and a later confirmation by BNC’s Director of Operations.

BNC challenged the jurisdiction of the English courts under CPR Part 11, arguing that the assignment was ineffective because the relevant BNC official lacked authority and the contractual notice requirements were not met. The High Court declared that the debts had been validly assigned and dismissed BNC’s challenge. The appeal concerned the authority to consent and the effectiveness of notice.

1. Appeal dismissed. The Court of Appeal upheld the declaration that the debts had been validly assigned to CRF. It was unnecessary to determine the alternative issues of ratification or whether consent would have been unreasonably withheld.
2. Findings concerning foreign law are reviewed with regard to the evidential context. Applying the approach identified in Perry v Lopag Trust Reg [2023] UKPC 16, the Court treated this case as close to the end of the spectrum where findings are approached like findings of simple fact, because they depended on translated materials and expert evidence concerning a civil-law system.
3. Under the Cuban Civil Code, Decree-Law No. 181 and the BNC Statutes, the President of BNC could delegate functions to officials. The Statutes gave managers responsibility for their divisions, including authority to represent them and issue binding instructions within their sphere of competence. Ms Martí therefore had delegated authority, in her role as Manager of the Foreign Debt Office, to consent to assignments within that remit.
4. The Court held that consent to an assignment was a banking operation within section 15(l) of the Signature Rules. The Rules contemplated two category A signatures for transactions above the applicable threshold. However, they conferred additional authority to sign in BNC’s name; they did not restrict authority separately delegated by the President through a management appointment. The absence of two signatures therefore did not invalidate Ms Martí’s email.
5. The contractual communications clause permitted BNC to designate contact details from time to time and specified no formality for doing so. BNC had indicated its later Havana address to market participants, and its officer had requested delivery there. Delivery of the notice at that address complied with the clause and did not amount to an oral variation. The Court accordingly rejected BNC’s challenge to the notice.

• Court of Appeal (Civil Division): BNC’s appeal was dismissed. The Court upheld the finding that the debts had been validly assigned to CRF.
• High Court of Justice, Business and Property Courts, Commercial Court (KBD): Mrs Justice Cockerill declared that the debts had been validly assigned to CRF and dismissed BNC’s CPR Part 11 jurisdiction challenge.