Alex Cheah and Raïan Kanso examine the High Court judgment in Bitar v Bank of Beirut in The Law Society Gazette

By Alex Cheah & Raïan Kanso

Associate Alex Cheah and Paralegal Raïan Kanso examine the recent judgment in Bitar v Bank of Beirut, and two other cases, relating to UK-domiciled customers claiming payment of their foreign currency deposits from a Lebanese bank.

Alex and Raïan’s article was published on 15 September in The Law Society Gazette and can be found here

On 15 August 2022, the High Court handed down its judgment in Bitar v Bank of Beirut S.A.L [2022) EWHC 2163 (QB), marking the third decision in quick succession relating to UK-domiciled customers claiming payment of their foreign currency deposits from a Lebanese bank. The previous judgments were handed down in Khalifeh v Blom Bank SAL [2021] EWHC 3399 (QB) and Manoukian v Societe Generale De Banque Au Liban SAL and Bank Audi SAL [2022] EWHC 669 (QB). The judgments provide guidance on how the English courts will interpret foreign law contractual construction in respect of obligations to execute a bank account transfer request. Currently, a claim against Bank Audi is being brought by Mr Bernard Nassif in the High Court, again for failure to transfer.

The cases were brought against the backdrop of the Lebanese financial crisis; its severity led to the Association of Banks in Lebanon advising its members in November 2019 to impose restrictions on international transfers, to “avoid a collapse of the Lebanese banking system” [138]. This has frustrated the ability of many bank customers outside Lebanon (including in the UK) to access their money. The Lebanese parliament is currently preparing legislation implementing capital controls for promulgation, which has been met with local protests.


In all three cases, the contracts between bank and customer were expressly or impliedly governed by Lebanese law. The English courts can accept jurisdiction over a foreign-law governed consumer-contract under the exception in (what is now) sections 15A-15E of the Civil Jurisdiction and Judgments Act 1982, which provides that a ‘consumer’ may “bring proceedings against the other party to the consumer contract in the courts for the place where the consumer is domiciled (regardless of the domicile of the other party to the consumer contract)”, subject to specific requirements.[1]

Discharge by deposit at notary public

Under Article 822 of the Lebanese Code of Civil Procedure (“LCCP”), a bank may discharge its debt owed to a customer by depositing the funds “at the notary public” or at an “acceptable bank or in the Treasury”. In Khalifeh, Foxton J found that the bank had satisfactorily discharged the debt owed to Mr Khalifeh under this provision and that he was not entitled to repayment of the account balance, albeit Mr Khalifeh did not pursue the point that he had a right to an international transfer, therefore limiting the relevance of the Court’s findings to international transfer right cases.[2]

In the latter two cases, specific performance of the asserted international transfer right was claimed, and the banks were precluded from relying on the Article 822 procedure insofar as a contractual obligation could be identified and a request was made prior to any discharge under Article 822. Indeed, in Manoukian, Picken J noted that “Article 822 was limited to [an] alternative claim in debt, in the event, that the Court were to decide that there was no transfer right…” [129].

Establishing a right to international transfer of funds

In interpreting the contracts in Manoukian and Bitar, the courts applied principles of contractual construction (or in Freedman J’s words, a “textual exegesis” (Bitar [60])) to deduce whether a recognisable right to transfer existed in each case.

In Bitar, the bank claimed that a standard form contract which “sets out…the terms of providing each of those services does not necessarily mean that the provider has an obligation to provide them” [62]. However, Freedman J noted that “the Court…must…have regard…to the context in which…the Account Agreements were entered into” [65] and identified a common intention to effect international transfers.

In Manoukian, the court also relied on the fact that “the Lebanese Consumer Protection Law…provides that ambiguous clauses are construed in favour of the consumer” [43] to find in favour of a contractual right; this was applied also in Bitar [63].


Although “inextricably linked” (Bitar [64]) to contract, Manoukian and Bitar also explored the concept of ‘custom’ under Lebanese banking practice to establish a right to international transfer. Taking Manoukian further, Freedman J noted that, pursuant to Lebanese law, “custom is a source of law, and contracts must be interpreted in accordance with it” [75] because, additionally, “[c]ase law can acknowledge…and elucidate custom” [73]. The cases are clear that the correct time to apply the prevailing custom is at the time of contracting, not at the time of request (Manoukian [13]).

What constitutes a ‘custom’ from a Lebanese legal perspective? The conduct must be both a “general and longstanding and constant action, practice or other behaviour; and… subjectively regarded as a binding norm…a general acquiescence to the factual element in that it must be followed” (Bitar [135]).

Endorsing Manoukian again, Freedman J confirmed that “the restrictions imposed on banks…have not taken the form of legislative provisions which directly affected the contractual relationships…banks have been subject to informal regulatory pressure [143]. Banks adhering to international transfer requests was held to be an extant custom.

In both cases “an obligation about international transfers [arose] without reference to custom in any event” (Bitar, [96]). It was held that this could not be vitiated by a kind of ‘acceptable or legitimate reason’ (such as a fear of a bank-run), but only by specified categories of reasons such as lack of funds, insufficient information, or regulatory restraints (see Bitar at [103] and [114]).


Ultimately Bitar, like Manoukian, concluded that specific performance was available to the Claimant in respect of the obligation to effect an international transfer. Discharge under Article 822 could not be relied on, as it was in Khalifeh.

Prospective claimants should assess the strength of their banking terms and conditions in respect of whether they credibly establish a right to transfer and whether they are a ‘consumer’ domiciled in the UK.

Counsel Bobby Friedman of Wilberforce Chambers, who was part of the team that represented Mr Manoukian in his claim, also notes, “The judgment in Bitar is a further important decision regarding the rights of consumers to bring claims in England against Lebanese banks for the specific performance of their international transfer requests. Coming on the back of the Court of Appeal’s refusal of permission to appeal in Manoukian, consumers will feel more confident in asserting their rights in the English courts. In particular, the repeated findings as to the banking custom of a right to an international transfer; that Article 822 will not assist the banks – at least where the transfer request was made prior to the Article 822 process being invoked; and that the Consumer Law works in the customer’s favour, will all give consumers much more confidence that they can pursue their claims in England. For customers who have been kept out of their money for a very substantial period of time, this will doubtless give them some hope, although each case will need to be considered on its merits“.

[1] See also Pammer v. Karl Schlütter GmbH & Co. KG C-585/08 and Hotel Alpenhof v. Mr. Heller C-144/09, Bitar v Banque Libano-Francaise SAL [2021] EWHC 2787 (QB)

[2] It should be noted, however, that in Manoukian, Foxton J’s decision on this point was challenged, albeit in the event that challenge did not need to be determined as Mr Manoukian succeeded on other grounds. It remains to be seen whether Foxton J’s decision on this point would be followed.

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