CRF 1 Limited v Banco Nacional de Cuba & Anor

The Court of Appeal dismissed the defendant bank's appeal and upheld the judge's declaration that the debts under two 1984 loan agreements had been validly assigned to CRF. The court accepted that, on the facts, an email of 13 June 2019 from the Manager of BNC’s Foreign Debt Office constituted prior consent to the assignment and that the manager had authority under Cuban law to give that consent. The court held that BNC’s internal Signature Rules did not operate to prevent a manager from giving prior consent in that manner: the rules either did not require two category A signatures for preliminary consent to an assignment or, in any event, the rules operated as a delegation mechanism rather than a limitation on existing delegated authority. The court also held that notice of assignment was validly given to BNC’s offices in Havana. Relevant issues of foreign law (Cuban law) were determined on the basis of expert evidence and the court applied the appropriate standard of appellate review for findings of foreign law.

Background and procedural posture:

• CRF sought a declaration that the benefit of two 1984 English-law governed loan agreements and the related indebtedness of Banco Nacional de Cuba (BNC) had been validly assigned to CRF in 2019, and brought claims in the English courts. Cockerill J in the Commercial Court declared on 19 April 2023 that the debts had been validly assigned and dismissed BNC’s challenge under CPR Part 11 to English jurisdiction. BNC appealed.

Key facts:

• The loan agreements contained clause 17 entitling the creditor and its successors and assigns to assign rights with BNC's prior consent (not to be unreasonably withheld). By 2019 the debts were held by ICBC, which requested BNC's prior consent to assign the debts to CRF. On 13 June 2019 Londa Cariad Martí of BNC’s Foreign Debt Office emailed ICBC stating acceptance "in principle" of the assignment. A Notice of Assignment was executed on 31 July 2019 (backdated to 13 June). On 25 November 2019 Raul Lozano (Director of Operations) wrote on BNC letterhead confirming agreement to the Notice. Subsequent correspondence in December 2019 and January 2020 addressed payment and the effect of prior refinancing arrangements.

Relief sought and issues:

• (i) CRF sought declaration that the debts had been validly assigned and therefore that the English courts had jurisdiction to determine CRF’s claims; (ii) BNC challenged the validity of the assignment on grounds including authority of Ms Martí to give prior consent under Cuban law and internal Signature Rules requiring two category A signatures; (iii) related issues included whether any ratification occurred and whether notice of assignment had been validly given.

Court’s reasoning and conclusions:

• The court treated the question whether Ms Martí had authority to bind BNC as one of Cuban law and accepted that the Judge was entitled to evaluate the statutory materials and expert evidence. The court found that, on the BNC Statutes and given the President’s power to delegate, both Ms Martí and Mr Lozano were authorised by delegation to act for the Foreign Debt Office and that such delegated authority encompassed consenting to assignments.
• The court considered BNC’s Signature Rules (Resolution no. 10/2016). It concluded that the judge had erred in parts of her analysis of the expert evidence as to Section 15(l), but that the judge’s overall conclusion should be upheld: the Signature Rules operate principally as a mechanism for authorising signatories (two A/B signatures) rather than as a limitation on pre-existing delegated authority; and in any event the consent given by Ms Martí was effective. The court accepted the judge’s factual findings that the email of 13 June 2019 amounted to prior consent and that later formalisation and registration steps did not negate that prior consent.
• The court also upheld the judge’s conclusion that notice of the assignments had been validly delivered to BNC’s Havana offices and that the contractual communication clauses did not defeat the effectiveness of the notice.

Wider context: The court applied the established, deferential approach to findings of foreign law where those findings depend on primary foreign materials and expert evidence, citing the relevant authorities on appellate review of foreign-law findings.

The appeal was dismissed. The Court of Appeal upheld the Commercial Court’s declaration that the debts had been validly assigned to CRF. The court concluded that the 13 June 2019 email was effective prior consent and that the manager who sent it had authority under Cuban law; the internal Signature Rules did not prevent that consent, being primarily an authorisation mechanism rather than a fetter on delegated authority; and notice of the assignment had been validly given to BNC’s Havana offices.

Appeal from the High Court of Justice, Business and Property Courts (Commercial Court, KBD), Cockerill J, Claim No. CL-2020-000092; judgment at first instance 19 April 2023 (declaration that the debts were validly assigned to CRF). This judgment was appealed to the Court of Appeal (Civil Division), [2024] EWCA Civ 1409, dismissed 19 November 2024.