Governing law in an unjust enrichment claim

The claimant Swiss bank was the victim of a fraud which caused it to pay money to a London bank, in favour of the defendant. It claimed for the tort of deceit and also for restitution of money paid by mistake. The issue in this case was whether the law governing the claim for restitution was Swiss or English law under the Rome II Regulation.

Teare J noted that unjust enrichment claims are dealt with under Article 10 of the Regulation. It provides that: "(1) If a non-contractual obligation arising out of unjust enrichment, including payment of amounts wrongly received, concerns a relationship existing between the parties, such as one arising out of a contract or a tort/delict, that is closely connected with that unjust enrichment, it shall be governed by the law that governs that relationship". The judge concluded that this relationship must exist before the facts which give rise to the claim and that this article is not intended to refer to the mere "relationship" of wrongdoer and victim, created by those facts. Accordingly, Article 10(1) did not apply. Instead, the position was governed by Article 10(3) which provides that: "Where the law applicable cannot be determined on the basis of paragraphs 1 .. it shall be the law of the country in which the unjust enrichment took place".

There was no dispute here that the unjust enrichment had taken place in England and so English law was the governing law for that claim.