Gur Corporation v Trust Bank of Africa

Ltd [1987] QB 599

FACTS:
In 1983, Plaintiif Contracted With The Republic Of Ciskei That Is An Independent South
African Bantustan Homeland To Build A Hospital And Two Schools. Under The Contract With
The Plaintiff A Gurantee Of 10 Percent Of The Price Of Contract Was Required To Be Made
Available To Cover Claims By The Republic Of Ciskei For The Cost Of Reparing Defects In The
Building So The Sum Of 3 Lac Dollars Was Lodged With The Defendant Bank As A Security
For A Guarantee Given By The Bank To The Republic Of Ciskei, The Republic Of Ciskei Made
Claim On The Guarantee, But It Was Disputed Whether The Claim Had Been Made In Proper
Form Before The Guarantee Expired But Defendant Bank Refused To Return 3 Lac Dollars To
The Plaintiff Until The Question Of The Validity Of Claim Was Settled The Plaintiff Took Legal
Action Against Defendant To Seek The Return Of The Deposit, The Defendant In Turn Served
3rd Party Notice On The Republic Of Ciskei To Have Determined As Against It The Validity Of
Its Claim. The Republic Of Ciskei Counterclaimed For A Declaration That It Was Entitiled To
Deposit. Anyways The Dispute Among The Parties Was Under Consideration In The Court Of
Law How Ever Got Disturbed When Steyn J Raised The Preliminary Question Whether A
Republic Of Ciskei As An Unrecognized Foreign State Had Locus Standi To Sue Or Being
Sued In The English Court. Consequence Of The Republic Of Ciskei Lack Of Locus Standi
Would Have Been That The English Court Could Not Have Resolved The Dispute In A Way
Which Bound It.

ISSUE:
The Material Issue Before The Court Was Whether Gur Corporation Or The Department Of
Public Works Of The State Of Ciskei Were Entitled To Monies Deposited With Trust Bank
By Way Of Guarantee Under A Construction Contract Between The Department And The
Corporation.

JUDGMENT:
A Letter Was Sent To The Foreign Office Of UK In The Following Terms: "What
Recognition, If Any, Does Her Majesty's Government Accord To The 'Government Of The
Republic Of Ciskei' Or The 'Department Of Public Works, Republic Of Ciskei'?" In Reply,
The Foreign Office Certified That The UK Did Not Recognize "De Jure Or De Factor The
Republic Of Ciskei."

It Was Also Mentioned By The Foreign Office That The Attitude Of Her
Majesty's Government Is To Be Inferred From The Nature Of Its Dealings With The Regime
Concerned And In Particular Whether UK Deals With It On A Normal Government To
Government Basis," And Further Clarified That Her Majesty's Government "Does Not Have
Any Dealings With The 'Government Of The Republic Of Ciskei' Or The 'Department Of
Public Works, Republic Of Ciskei.

In Deciding The Case Republic Of Ciskei Had No Locus Standi,

Mr. Justice Steyn Referred The Decision In Carl Zeiss Was That The USSR Had Been
Expressly Recognized "As De Jure Entitled To Exercise Governing Authority.But Here Given
No Such Recognition Of South African Entitlement Over Ciskei In This Case. And Evidence
Also Showed That South Africa Did Not Claim To Be Entitled To Exercise Governing
Authority Over Ciskei. Furthermore, Such Evidence Was Admissible As It Did Not Conflict
With The Foreign Office Letters But Here No Any Concerned Pointed Was Presented Before
The Court Mr. Justice Steyn Held That The "Government Of The Republic Of Ciskei" Had
No Locus Standi-It Was Neither A Recognized Government Nor Under The Governing
Authority Of A Recognized Government.

But On Appeal By The Trust Bank And Ciskei, The Court Of Appeal Reversed
Mr. Justice Steyn And Held That The Government Of Ciskei Had Locus Standi As A
Subordinate Body Set Up By The Republic Of South Africa To Act On Its Behalf. The Court
Found The Case Indistinguishable From Carl Zeiss Stiftung V. Rayner & Keeler.

The Judgment Of Lord Justice Nourse Regards

The Foreign Office Letters As Conclusive That The Foreign Office Informed The Court That
Representations Had Been Made To The South African Government In Relation To Certain
Matters Affecting The Territory, But That These Representations Had Generally Received No
Response Are Enough To Infer That Her Majesty's Government Recognized South Africa As
De Jure Entitled To Exercise Governing Authority In The Territory. That Clears The Point Of
Foreign Office That The Attitude Of Her Majesty's Government Is To Be Inferred From The
Nature Of Its Dealings With The Regime Concerned.

May Be The Court's Action Was Not Done In Order To Deny The Locus Standi Of
Ciskei In Conformity With The United Kingdom's International Obligations, But Rather To
Avoid The Consequences Of Nonrecognition And To Facilitate The Appearance Of That Body
Before A Domestic Tribunal.