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Decoding Judgements: Navigating Equity and Trusts in Byers v Saudi National Bank

29 March 2024 | CaseSnappy Team

A bird's eye view image of Riyadh, the city in which Saudi National Bank is headquartered.


Welcome back to our blog, CaseSnappy community! We plunge further into the 'Decoding Judgements' series, this time threading our way through the intricacies of equity and trusts. Our case in focus is the recent decision of the Supreme Court Byers and others v Saudi National Bank [2023] UKSC 51. A tale of retrieved shares and trusts betrayed. Let's dissect this ruling:

Shares and Shadows: The Case Facts

Our story revolves around Mr Al-Sanea, who amassed shares in five Saudi Arabian companies, holding them on trust for Saad Investments Company Limited (SICL). However, under a shadow of breach, he transferred these shares to Samba Financial Group (Samba), inadvertently extinguishing SICL's equitable interest. Samba then became the sole proprietor of the shares, leading SICL and its liquidators to lodge a claim for knowing receipt which, having been challenged, found its way to the Supreme Court.

Extinguished Equity: The Legal Issues

The legal conundrum to unravel was whether a claim for knowing receipt could stand when a claimant's equitable interest in the property had been obliterated upon the defendant's receipt of said property. SICL clung to the idea that a knowing receipt claim was valid despite their equity in the shares being erased by Saudi Arabian law. Samba, however, held firm that the extinguishing of the equitable interest barred such a claim.

The Resolute Decision: Knowledge without Receipt

In a crucial judgement, the Supreme Court sided with Samba, affirming that a claim for knowing receipt falls flat when the claimant's equitable interest in the property has been snuffed out by the time of the defendant's receipt of it. The court established that when an equitable interest is overridden, it prohibits a claimant from bringing not just a proprietary claim, but a knowing receipt claim as well.

CaseSnappy: Making the Law Easy to Understand

The Byers v Saudi National Bank decision underscores the intricate relationship between trusts law and property law, as well as the influence of foreign law on domestic legal proceedings. In 'Decoding Judgements', our mission is to make these legal complexities understandable to all our readers.

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