In the modern world, banking is perhaps the strongest illustration of the importance of mutual respect for national sovereignties. If the courts of one country in which a bank operates exercise no restraint about using their sovereign powers of compulsion in relation to accounts maintained with that bank at overseas branches, chaos and conflict is likely to follow. So said Lord Hoffmann in the recent House of Lords decision in Societe Eram Shipping Company v Hong Kong and Shanghai Banking Corporation.
The decision in Eram, together with their Lordships’ judgment in Kuwait Oil Tanker Company SAK v UBS, provide concrete illustrations of this view in the context of third party debt orders.
