Lloyd's Maritime and Commercial Law Quarterly
VOID CONTRACTS, RESTITUTION AND JURISDICTION
Kleinwort Benson v. Glasgow District Council
The Court of Appeal has written another chapter in the long-running saga of Kleinwort Benson Ltd v. Glasgow District Council.1 The history of the case is relatively straightforward. In 1982 Kleinwort Benson (“Kleinwort”) entered into an interest rate swap agreement with Glasgow District Council (“Glasgow”), to which it advanced a substantial sum of money. Some time later, in Hazell v. Hammersmith & Fulham London Borough Council
2 the House of Lords declared such contracts void for lack of capacity on the part of the local authorities. Seeking reimbursement, Kleinwort pursued a restitutionary claim against Glasgow in the Commercial Court in London.
Glasgow did not want to be sued in England, principally because Scottish law may offer more favourable limitation periods. Being domiciled in Scotland, it argued that it was entitled to be sued there under the Civil Jurisdiction and Judgments Act 1982, Sched. 4,
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