UK Rules International Bank Transfer Does Not Constitute a Valid Trust

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The Court of Appeal for England and Wales has found that a cross-border transfer of funds carried out by a clearing system or correspondent bank does not allow for an express or Quistclose trust to be created in favour of the client.

The EWCA ruled that First City Monument Bank v Zumax Nigeria set the precedent to disallow for any future payors and intended payees wanting to bring a breach of contract claim. The case overturned a High Court of Justice ruling that a breach of trust against a bank is a proprietary claim against the bank.