Commercial Court hands down judgment in favour of JPMC after a seven-week trial in the case of Federal Republic of Nigeria v JPMorgan Chase Bank NA  EWHC 1447 (Comm)
On 14 June 2022, Mrs Justice Cockerill handed down judgment in Federal Republic of Nigeria v JPMorgan Chase Bank NA  EWHC 1447 (Comm), following a seven-week trial in the Commercial Court earlier this year.
Rosalind Phelps QC, David Murray and Aaron Taylor of Fountain Court Chambers instructed by Freshfields Bruckhaus Deringer, acted for JPMC. Martello, instructed by Freshfields, provided the banking expert witness on behalf of JPMC. We were delighted to work on this significant case and would like to add our congratulations to the legal team on the outcome they achieved.
The claim related to three payments, connected to the 2011 settlement of disputes surrounding the Oil Prospecting Licence for a Nigerian oilfield (OPL 245). The payments, totalling approximately US$1billion, were paid out of a Depository Account held by the Federal Government of Nigeria (FGN) at JPMC between 2011 and 2013, on instructions conveyed by authorised officers of the FGN.
Following a change of government in Nigeria, the Federal Republic of Nigeria (FRN) claimed that the 2011 Resolution Agreements were corrupt and that, in making the related payments, JPMC was in breach of its Quincecare duty (i.e., the duty on a bank not to execute a payment instruction if it reasonably believes that this will facilitate a fraud on the customer).
In her judgment, Mrs Justice Cockerill rejected the FRN’s claim and found in favour of JPMC on both key areas of the dispute: a) whether there was sufficient factual evidence that the payment instructions constituted a fraud on the FRN, and b) whether JPMC breached its Quincecare duty and was grossly negligent in making the payments.
The judgment handed down on Tuesday contains significant and valuable discussion related to the nature and scope of Quincecare duty and “gross negligence”. The banking expert evidence involved opining on the relevance of numerous “red flags” alleged by the FRN as regards the possibility that the payment instructions were part of a fraudulent scheme on the account holder.
In her judgment, Mrs Justice Cockerill stated she preferred the Martello expert evidence, noting that the Martello expert evidence was more “manifest” compared to FRN’s banking expert who “appeared to approach the question very much from a compliance perspective rather than a banking perspective”.
Mrs Justice Cockerill’s comments emphasise the importance of selecting the right expert and expertise for the issues at hand. You can view the full judgment here.