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Alesayi v Bank Audi SAL
Factual and Procedural Background
The Plaintiff is a dual national who opened a passbook savings account with Company A in 1994. Company A was later acquired by the Defendant and, following subsequent corporate changes, the Defendant succeeded to Company A's rights and obligations. The Plaintiff held multiple accounts (eight US dollar accounts of relevance) under a single account number with various suffixes. The Plaintiff seeks an order requiring the Defendant to transfer the full balance of those accounts (over US$24 million) to an account in Company B. The Plaintiff issued proceedings in the English court as a consumer relying on sections 15B and 15E of the Civil Jurisdiction and Judgments Act 1982 (the CJJA). The Defendant contends the relevant contract was concluded in 1994; the Plaintiff contends it was concluded in November 2016 when a suite of new terms was signed. The issue of when the contract was concluded was determined by the High Court Judge in favour of the Plaintiff; the Defendant obtained permission to appeal. The Court of Appeal delivered a judgment dismissing the appeal.
Legal Issues Presented
- Whether changes agreed to an existing banking contract are of such a magnitude that a new contract is "concluded" for the purposes of jurisdiction under sections 15B and 15E CJJA (adopting the meaning in Articles 17–19 of the Recast Regulation).
- On the facts of this case, whether the contract was concluded in 1994 or in November 2016 (the date on which the Plaintiff signed a suite of new terms).
Arguments of the Parties
Appellant's Arguments
- The relevant contract was concluded in 1994 when the account was opened; the 2016 exercise was administrative, prompted by a routine file review, and did not create a new contract.
- English novation principles (intention to rescind and replace) or a restrictive approach to the consumer-jurisdiction derogation should govern the issue.
- Alternative submissions included that only a "material" change or a demonstrable novation would suffice to conclude a new contract.
Respondent's Arguments
- The contract was concluded in November 2016 because the parties agreed a comprehensive new set of terms (the 2016 Terms) which, in substance, replaced and governed the parties' legal relationship across accounts.
- The 2016 Terms introduced new rights and a new regulatory classification (Professional Client Consent) and therefore effected a wholesale restatement of the legal relationship.
- For the jurisdictional gateway the correct approach is to apply autonomous EU law principles (as preserved in the CJJA) and to ask whether the variation is of such magnitude that a new contract should be regarded as having been concluded.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| mBank S.A. v PA (Case C-98/20) [2020] I.L.Pr 37 | Establishes that the consumer must be domiciled in the UK at the time proceedings are commenced for s.15B(2)(b) purposes. | Used to confirm the domicile requirement under s.15B(2)(b). |
| Soleymani v Nifty Gateway LLC [2022] EWCA Civ 1297 [2023] 1 WLR 436 | Holds that sections 15B–15E CJJA adopt the jurisdictional rules of the Recast Regulation and must be interpreted accordingly (autonomous EU law approach). | Applied to require that the question of when a contract is "concluded" be treated as an autonomous EU law question, not pure domestic contract law. |
| EF Hutton & Co (London) Ltd v Mofarrij [1989] 1 WLR 488 | Authority that interpretation of jurisdictional gateways is a question of law and cannot be satisfied by merely establishing a good arguable case as to meaning. | Relied on to explain the distinction between legal construction of the gateway and factual good-arguable-case assessment. |
| Brownlie v Four Seasons Inc [2017] UKSC 80 [2018] 1 WLR | Confirms that on factual application the claimant need only show a good arguable case that the test is met. | Used to explain the standard for establishing on the facts that the jurisdictional test is met. |
| Goldman Sachs International v Novo Banco SA [2018] UKSC 34 [2018] 1 WLR 3683 | Confirms the approach in Brownlie regarding good arguable case standard. | Applied as supporting authority for the factual standard of proof. |
| Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 1 | Addresses appellate review of evaluative factual judgments on jurisdictional questions. | Relied on to explain the limited scope for appellate interference with the Judge's evaluative assessment of evidence. |
| Hellenic Republic v Nikiforidis (Case C-135/15) [2016] I.L.Pr N 39 | Articulates that a contract concluded before a date will only be treated as newly concluded after that date if a variation agreed thereafter is of such magnitude that it creates a new legal relationship (i.e. a new contract). | The Court adopted the Nikiforidis test as the correct approach to when changes to a contract amount to conclusion of a new contract for the purposes of s.15E CJJA. |
| Khalifeh v Blom Bank SAL [2021] EWHC 3399 (QB) | Discusses whether minimal ancillary variations to bank contract amounted to new contract; refers to novation-like concepts. | Cited in the analysis of novation-like changes and to contrast minor variations with wholesale restatements. |
| Manoukian v Société Générale de Banque au Liban SAL and Bank Audi SAL [2022] EWHC 669 (QB) | Construction of bank terms in a previous dispute (Picken J) as conferring an international transfer right. | Referred to as background for the Plaintiff's pleaded reliance on bank terms conferring a transfer right. |
| Emrek v Sabranovic (Case C-218/12) [2014] Bus LR 104 | Illustrates that the activity requirement may be fulfilled by directed activity (e.g. a website) even if the consumer is unaware. | Used to explain the scope of the activity requirement under s.15E(1)(c). |
| Gruber v BayWa AG Case C-464/01 [2006] QB 204 | States that jurisdictional derogations from domicile are to be strictly interpreted to reflect their limited purpose. | Referenced in argument about restrictive interpretation; Court considered the passage but rejected an overarching restrictive rule inconsistent with consumer protection aims. |
| Cobalt Data Centre 2 LLP v Revenue and Customs Commissioners [2024] UKSC 40 [2024] 1 WLR 5213 | English contract law on novation was cited by a party. | The case was noted as cited by the Defendant in argument about novation principles, though the Court held the matter is governed by autonomous EU law principles for the CJJA issue. |
| AY v Liechtensteinische Landesbank (Osterreich) AG (C-279/24) [2026] I.L.Pr. 5 | Referential material on harmonisation between instruments (mentioned at AG 43). | Referred to in the Court's reasoning about harmonisation between Rome I and the Recast Regulation language. |
Court's Reasoning and Analysis
The Court proceeded on the basis that sections 15B and 15E CJJA are to be interpreted in conformity with the Recast Regulation and relevant ECJ authority, such that the question of when a contract is "concluded" after changes is an autonomous EU-law question. The Court distinguished (a) the legal question of the meaning of "concluded" (a matter of law to be decided by the court) and (b) the factual question whether that legal test is met on the evidence (where the claimant need only establish a good arguable case).
The Court adopted the test from Nikiforidis: a variation agreed after the relevant date is to be treated as creating a new contract only if it is of such magnitude that it gives rise not to mere updating or amendment but to the creation of a new legal relationship — i.e. the initial contract is to be regarded as replaced by a new contract concluded on or after that date. The Court emphasised that the test looks to substance (the legal relationship) rather than form or mere operational/practical change, and rejected approaches that would treat any new term or any "material" change as sufficient.
Applying that test to the evidence, the Court agreed with the High Court Judge's evaluative finding that the 2016 Terms constituted a comprehensive, single new agreement which, in substance, replaced the prior terms. Key factual and contractual features relied on by the Judge included: (i) the 1994 terms applied only to a passbook savings account and did not govern most accounts; (ii) the 2016 Terms comprised an integrated set of documents (General Terms, Portfolio Terms, FX Terms, fees, rights and duties, KYC, Professional Client Consent) intended to govern a wide range of banking operations and to treat sub-accounts as part of a single account; (iii) express provisions treated the 2016 suite as an integral whole and superseded prior arrangements; and (iv) the Professional Client Consent and other clauses changed the legal/regulatory relationship. The Court concluded that these features supported the Judge's view that there was a wholesale restatement of the legal relationship, sufficient to meet the Nikiforidis test to the standard of a good arguable case, and that the Judge's evaluative assessment was within the range of reasonable conclusions.
Holding and Implications
APPEAL DISMISSED.
Holding: The Court dismissed the Defendant's appeal and upheld the High Court Judge's conclusion that, for the purposes of sections 15B and 15E CJJA, the relevant banking contract was to be regarded as concluded in November 2016 because the variation effected by the 2016 Terms was of such magnitude that it created a new legal relationship.
Implications: The direct effect is that the English court may exercise jurisdiction under the consumer-contract gateway in respect of the Plaintiff's claim. The Court endorsed the Nikiforidis formulation as the appropriate legal test to determine when a variation gives rise to a new contract for the purposes of the CJJA; the test focuses on whether the variation in substance creates a new legal relationship rather than on form or the presence of any single new term.
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