On 13 June, 2006, in Riyad Bank v Ahli Bank (UK), the Court of Appeal gave guidance as to the circumstances in which a duty of care will be found to exist, notwithstanding that the commercial relationship between the parties has been structured to avoid a contract between the professional and the recipient of its advice. Lawyers and commercial clients engaged in providing others with advice would do well to take note.
In 1994, Ahli United Bank, then known as the United Bank of Kuwait (UBK), established a sharia- compliant income fund whose assets were invested in operating leases of equipment largely in the US. The Saudi Arabia-based Riyad Bank was interested in developing sharia- compliant investment products such as UBK’s fund. Discussions therefore took place between Riyad Bank and UBK with a view to Riyad Bank marketing the UBK fund through its branches in Saudi Arabia.
