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Financial institutions — Banks — Letters of credit
(00:01:05) Summary
(00:01:15) - Facts and Procedural History
(00:05:16) - Disposition
(00:05:21) - Per Wagner C.J. and Rowe, Martin, Kasirer, Jamal, O’Bonsawin and Moreau JJ.
(00:12:43) - Per Karakatsanis and Côté JJ. (dissenting)
(00:22:45) Reasons for Judgment: Kasirer J. (Wagner C.J. and Rowe, Martin, Jamal, O’Bonsawin and Moreau JJ. concurring)
(00:22:54) I. Overview – 1
(00:30:09) II. Background – 14
(00:30:19) A. The Relevant Actors – 15
(00:31:54) B. The Underlying Contracts – 19
(00:32:56) C. The Letters of Credit – 21
(00:34:51) D. The Initial Dispute – 24
(00:36:24) E. Applications for Interim Relief – 28
(00:38:16) F. HMOD’s Final Demand for Payment – 31
(00:40:47) G. The Final ICC Arbitral Award and Subsequent Proceedings – 36
(00:44:48) III. Judicial History – 44
(00:44:50) A. Quebec Superior Court – 44
(00:47:04) B. Quebec Court of Appeal – 49
(00:47:06) (1) Mainville JA, Baudouin JA Concurring – 49
(00:50:46) (2) Hamilton JA, Dissenting – 55
(00:53:23) IV. Issues and Grounds of Appeal – 62
(00:55:40) V. Analysis – 67
(00:55:42) A. The Law Relating to Letters of Credit in Canada – 67
(00:59:59) (1) Autonomy and Strict Compliance – 73
(01:00:08) (a) Autonomy of the Letter of Credit – 74
(01:02:12) (b) Strict Compliance – 77
(01:03:54) (2) The Fraud Exception to the Autonomy of Letters of Credit – 80
(01:09:17) B. Application – 88
(01:25:04) (1) HMOD Engaged in Fraud as a Third Party to the Letter of Counter-Guarantee – 112
(01:35:44) (2) HMOD’s Fraud Became Eurobank’s Own – 127
(01:47:49) (3) Conclusion on the Fraud Exception – 143
(01:48:32) VI. Impact of the Nullity of the Offsets Contract on the Letter of Counter-Guarantee – 144
(01:51:57) VII. Disposition – 151
(01:52:11) Dissenting Reasons: Côté J. (Karakatsanis J. concurring)
(01:52:16) I. Overview – 152
(01:55:08) II. Factual and Legal Context – 158
(01:55:11) A. The Relevant Contractual Arrangements – 158
(01:56:51) B. Chronology of Events – 161
(02:07:06) III. Procedural History – 198
(02:07:09) A. Quebec Superior Court – 198
(02:08:39) B. Quebec Court of Appeal – 202
(02:09:45) (1) Mainville JA, Baudouin JA Concurring – 202
(02:11:48) (2) Hamilton JA, Dissenting – 204
(02:11:53) IV. Issues – 210
(02:12:13) V. Analysis – 211
(02:13:40) A. Demand Guarantees Are Autonomous – 214
(02:17:37) B. The Fraud Exception to the Principle of Autonomy – 219
(02:19:00) (1) Fraud Is a High Bar – 221
(02:22:17) (2) Clear or Obvious Knowledge of Fraud – 224
(02:26:25) (3) Third‑Party Fraud in the Context of Counter‑Guarantees – 230
(02:27:24) VI. Application – 232
(02:27:58) A. The Impact of the Judgments of the Greek Courts for the Purposes of the Letter of Counter‑Guarantee – 233
(02:46:51) B. HMOD’s Demand for Payment Was Neither Fraudulent Nor Tantamount to Fraud – 252
(02:47:13) (1) HMOD’s Written Undertaking – 253
(02:53:58) (2) HMOD’s Breach of the Provisional Orders – 262
(02:58:20) (3) The Timing of HMOD’s Demand for Payment – 269
(03:03:51) C. Even if HMOD’s Conduct Was Fraudulent or Tantamount to Fraud, Eurobank Was Innocent of That Fraud – 276
(03:04:57) (1) Eurobank’s Knowledge – 277
(03:10:43) (2) Eurobank’s Alleged Participation – 285
(03:14:52) (3) The Apportionment of Risk Between the Parties – 291
(03:17:46) D. Impact of the Declaration of Nullity of the Offsets Contract on the Letters of Guarantee and Counter‑Guarantee – 295
(03:20:32) VII. Conclusion – 299
