The recent Commercial Court decision of Tecnimont Arabia Limited v National Westminster Bank PLC(1) considered the Court's approach to a claim for unjust enrichment against a recipient bank in an authorised push payment (APP) fraud context. In particular, the Court examined:

  • whether the enrichment can be said to be at the "expense" of the claimant;
  • what factors amount to enrichment being "unjust"; and
  • when the defence of "change of position" is available.

In relation to knowing receipt, the Court considered the question of when property is "trust property" for the purposes of the cause of action.


The claimant, Tecnimont Arabia Limited (TAL), is a company operating in Saudi Arabia and is part of a multi-national Italian corporation. On 30 October 2018, as a result of deception on the part of a fraudster, TAL instructed its bank to pay $5 million to a dollar account held at the National Westminster Bank (NatWest) in the name of a third-party, Asecna Limited (the account). The account was controlled by the fraudster, who subsequently dispersed the majority of the funds over the following two days to various accounts in different countries.

NatWest received and acted upon fraud alerts before the final payments were made out of the account. On 31 October 2018, NatWest received two automatic fraud alerts at 10:10am and 1:04pm, respectively. These alerts resulted in online banking services being suspended temporarily. However, after investigation, online banking services were resumed in both cases. By 11:56am on 1 November 2018, NatWest had become aware of the fraud, but one final payment was made out of the account on the same day at 3:44pm. NatWest's anti-money laundering (AML) fraud detection systems also triggered an alert in respect of the account on 11 November 2018.

TAL brought claims against NatWest for unjust enrichment and knowing receipt. An unjust enrichment claim requires consideration of four key questions:

  • Has the defendant benefitted or been enriched?
  • Was the unjust enrichment at the expense of the claimant?
  • Was the enrichment unjust?
  • Is there any specific defence available to the defendant?

NatWest argued that, if enrichment had occurred, it was not at TAL's expense because the payment from TAL to the account had not been direct (as it was an international payment, the money sent by TAL had passed through numerous other accounts in the course of processing the payment). The relevant transfer was an offshore transfer in US dollars from Saudi British Bank SJSC in Saudi Arabia (SABB), via Citibank in the United States as SABB's correspondent/intermediary bank, to NatWest in London, communicated using SWIFT messages.

NatWest also sought to rely on the defences of "change of position" and "ministerial receipt". TAL argued that these defences were not available to NatWest and, in particular, that the bank could not rely on the defence of change of position because it had not acted in "good faith" (Niru Battery Manufacturing Co v Milestone Trading Ltd).(2) TAL argued that this was the case:

  • by reason of the design and operation of NatWest's fraud detection systems;
  • because the second automatic fraud alert had been dealt with outside NatWest's usual processes; and
  • because NatWest had direct knowledge of the fraud when the final payment out was made.

TAL argued that any enrichment was "unjust" as it had arisen as a result of a mistake. NatWest, on the other hand, submitted that TAL ran the risk that the payment was a fraudulent payment or "shut its eyes" to that risk. The issue was essentially one of fact.


Knowing receipt
In his judgment, the judge (Bird J) stated that it was established law that, if the transferred property is not trust property, there can be no liability for knowing receipt.(3) TAL argued that the transferred funds represented trust property because the transfer itself had been procured by fraud. However, the judge did not agree, finding that:

The claimant paid away monies acting under a mistake induced by the deceit of a third party. In my judgment, the defendant is right to submit that the property was not trust property at the time it was received.

The judge also noted that NatWest had received the deposit for its customer and not for its own account and there was, therefore, no valid claim for knowing receipt (in the case of Twinsectra v Yardley,(4) Lord Millett stated that a cause of action based on knowing receipt only arises where the defendant received or applied the funds in breach of trust for their own use).

Unjust enrichment
Was the unjust enrichment at the expense of the claimant?
The judge stated that the purpose of the "at the expense of" element is to check that there has been a "transfer of value" in the sense that the defendant has received a benefit from the claimant and the claimant has suffered a loss or detriment through their provision of that benefit. The judge considered that there are at least four ways in which a claimant can satisfy the court that the defendant has been unjustly enriched at its expense (assuming there to be a transfer of value):

  • The claimant and the defendant had direct dealings.
  • The claimant and the defendant did not have direct dealings, but the substance of their dealings was such that the law would treat them as direct.
  • The claimant and the defendant dealt with each other's property.
  • The claimant could trace an interest into property provided to the claimant by a third party.

In relation to the second way (considering whether the transactions should be treated as a direct transfer), the judge found the following to be relevant:

  • The analysis must focus on the transactions and not the effect of the transaction. This reflects the need to avoid considering the "economic reality" of the transaction.
  • The substance of the transaction is key rather than its form. This reflects "transactional reality" and ensures that "apparent" features of the transaction give way to "real" features. The purpose and genuineness of each step must be considered.
  • The nature of the transactions may be important (eg, the fact that charges and land purchases are "indissolubly bound together").
  • The number of parties providing funds should be considered.

Applying the above principles, the judge refused to treat the international interbank transactions as forming a single scheme or transaction. In reaching this decision, the judge found it relevant that the transfers involved "the adjustment of balances" between two pairs of banks:

  • SABB and Citibank; and
  • Citibank and NatWest.

The interbank accounts are settled in the normal course of business by a running account and "it is usually unnecessary for either bank to transfer funds to the other".

In relation to the fourth way (considering whether TAL could trace an interest into the property), the judge applied the principle that tracing through mixed funds (including those created by international banking transfers) was impermissible at common law.(5) On this basis, any enrichment would not have been at the expense of TAL.

Was the enrichment unjust?
The judge found that a claimant may sometimes be denied relief on the basis of unjust enrichment:

  • if the claimant responded unreasonably to their doubts, and so unreasonably ran the risk of error;
  • if they had doubts, they may be denied relief on the distinct grounds that they compromised or settled with the defendant; or
  • on the basis that they are estopped from pleading their mistake.

The judge found that there was no need for any independent "assumption of risk" bar, as had been suggested by NatWest. That being the case, and after considering the facts, the judge found in favour of TAL that any enrichment was unjust on the basis that employees at TAL had been "completely taken in by the fraud" and at every stage had believed that they were acting on a true instruction.

Is there any specific defence available to the defendant (eg change of position or ministerial receipt)?
In relation to the defence of change of position, the judge held that the relevant question was whether it was "unjust" to permit NatWest to rely on the defence. Following an examination of the bank's internal systems, the judge held that nothing in the design or operation of NatWest's AML or anti-fraud systems would make it unjust to allow NatWest to rely on the change of position defence. While it could be said that an employee had been careless, or had not handled one of the automatic anti-fraud alerts in accordance with internal guidance, this was not enough to justify the conclusion that NatWest should be precluded from relying on the change of position defence and nothing in the employee's conduct raised any question of unconscionability. Finally, the judge held that, once NatWest had known of the fraud, the process of freezing the account had not been handled "efficiently". However, he stated that lack of efficiency was not a sufficient reason to preclude reliance on the defence and noted that it was important to bear in mind that the payment out of the account had essentially been an automated process (the final transfer out had not been actively authorised by NatWest, but had been "permitted" by NatWest's automated processes).

On the basis of the decisions outlined above, the judge did not consider the availability of the defence of ministerial receipt.

It is understood that TAL did not seek permission to appeal.


Recent decisions in relation to fraudulent payments have generally involved claims against the defrauded party's own bank.

However, it is perhaps not surprising that victims of fraud are increasingly looking to the fraudster's own bank for redress. This is particularly the case where the recipient bank has failed to act expeditiously once notified of the fraud or its systems and controls appear not to have met applicable standards and failed to detect the fraud.

In the majority of cases, however, there will not be a contractual or tortious relationship between the victim and the recipient bank so certain causes of action (for example, breach of the Quincecare duty) are not available. This decision demonstrates the hurdles claimants must overcome when bringing claims against recipient banks in the context of APP fraud and shows that even cases involving employees who do not adhere to internal anti-fraud guidelines, or delays in freezing accounts after a fraud has been notified, may not necessarily give rise to redress in the courts.

For further information on this topic please contact Lucy Baughan or Jonathan Cary at RPC by telephone (+44 20 3060 6000) or email ([email protected] or [email protected]). The RPC website can be accessed at


(1) [2022] EWHC 1172 (Comm).

(2) [2004] 1 All ER (Comm) 193 CA.

(3) Byers v Samba Financial Group [2021] EWHC 60 (Ch) and Armstrong DLW GmbH v Winnington Networks Ltd [2013] Ch 156.

(4) [2002] UKHL 12, paragraph 12.

(5) Bird J held that the correct approach to tracing is that set out in Agip (Africa) Limited v Jackson [1991] Ch 547.