Lloyd's Maritime and Commercial Law Quarterly


Gerard McMeel*


The crucible for the development, and subsequent refinement, of the principles of the law of unjust enrichment has very often been cases where both parties to failed contracts had obligations to pay each other money. Its progress has often followed in the wake of developments in modern finance. Much of the development (and some over-development) of the law in the 1990s arose from cases where UK public authorities entered into interest rate swaps, a species of derivative, with banks, which contracts were held to be ultra vires. Some 1,000 swaps had to be unwound using the principles only authoritatively recognised at the start of that decade: Jo Braithwaite, The Financial Courts [-] Adjudicating Disputes in the Derivatives Markets (2020), 4–5. Interest rate swaps were not new-fangled, but they were comparatively recently fangled. David Kynaston—in The City of London Volume IV: A Club No More 1945–2000 (2001), 614—suggests that interest rate swaps were first cooked up in about 1982. The Commercial Court is now experiencing a second wave of swaps litigation, arising from the heady interface with private international law rules on contractual capacity (see Banca Intesa Sanpaolo SpA v Comune di Venezia §74). That was a case involving Italian parties on all sides, litigating in London under a choice of court agreement. Such a clause also brought a dispute in which Ukraine challenged the Russian Federation’s alleged imposition on it of sovereign debt, in the shape of US$3 billion worth of Eurobond notes, in the early stages of the deterioration of those countries’ relationship, requiring the UK Supreme Court to revisit physical duress, with an international law background (Law Debenture Trust Corp Plc v Ukraine §83). Eurobond finance has a slightly longer pedigree, being first conjured up in London in 1963, according to Kynaston, 275 (a year immortalised by poet Philip Larkin for other reasons). The important judgment of Carr LJ in Dargamo Holdings Ltd v Avonwick Holdings Ltd (digested last year: [2022] LMCLQ 527 §74), on the relationship between contract and unjust enrichment was probably the most cited, and followed, case of the year, including in the highly significant Supreme Court case of Barton v Morris (§76), on what Lord Burrows called “beautifully simple facts” (at [197]), with very different views on the relationship between contract and unjust enrichment emerging in the three judgments.

Unjust enrichment in England and Wales


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