Court of Appeal finds payment obligations under letters of credit suspended by UK Russian sanctions regime

The Court of Appeal has handed down its much-anticipated decision in Celestial Aviation Services Ltd v UniCredit Bank AG (London Branch) [2024] EWCA Civ 628, holding that UniCredit Bank AG was excused from making payment under various letters of credit that it had issued in connection with the supply of aircraft to Russian airlines, by virtue of the UK sanctions regime. Susannah Cogman, Rupert Lewis and Ajay Malhotra of Herbert Smith Freehills study the ruling and consider its implications.

Susannah Cogman (+44 (0)20 7466 2580, susannah.cogman@hsf.com), Rupert Lewis (+44 (0)20 7466 2517, rupert.lewis@hsf.com) and Ajah Maholtra (+44 (0)20 7466 7605, ajay.maholtra@hsf.com) are London-based partners at Herbert Smith Freehills.

The Court of Appeal has handed down its much-anticipated decision in Celestial Aviation Services Ltd v UniCredit Bank AG (London Branch) [2024] EWCA Civ 628 [1], holding that UniCredit Bank AG was excused from making payment under various letters of credit that it had issued in connection with the supply of aircraft to Russian airlines, by virtue of the UK sanctions regime. Susannah Cogman, Rupert Lewis and Ajay Malhotra of Herbert Smith Freehills study the ruling and consider its implications.