The hacking of email accounts and the frequency and sophistication of intercepted and fraudulent emails has increased over recent years resulting in payments being made inadvertently to fraudulent bank accounts. V's email records showed that the emails with the invoices were apparently forwarded by V to K on the same day, however what K actually received were emails which appeared to come from V, containing payment instructions for remittance via Citibank NA's New York branch in favour of Citibank NA at its London branch with different account details purporting to identify A as the beneficiary. For another week or so, A and K exchanged several emails, either via V or directly, dealing with various matters. These emails were manipulated in a similar way to the initial invoices, and the fraud went unnoticed for some time. K had remitted funds on 5 Nov. Subsequently, on 13 Nov, K emailed A asking for an acknowledgement of receipt of the funds saying that its bank had been told by Citibank New York that the latter had had payment confirmed by the London branch.
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A sold sunflower meal to K. All notices required to be served on the parties pursuant to this contract shall be communicated rapidly in legible form… A notice to the Brokers or Agent shall be deemed a notice under this contract. After A loaded the cargo, A sent an email to the intermediary broker attaching an invoice directing payment to be made to Citibank NA, New York branch. K made payment to the fraudulent account.
A brought arbitration proceedings against K to recover the shortfall. K sought to challenge the award. An obligation to pay in cash, against the background of modern banking practice, permits any commercially recognised method of transferring funds, providing it is equivalent to cash, i.
It is commercially impossible to transfer funds to a bank without identifying the beneficiary and the designation account by branch and account name and number. This case serves as a good reminder to Members that cyber fraud, which continues to be rife, can affect them.
As such, Members may consider the following measures to minimise the risks arising from cyber fraud, including but not limited to:. Regularly check bank statements for any unusual or potentially fraudulent activity.
Verify changes in financial arrangements with organisations directly through transparent and secure communication channels. Check the veracity of an unusual request for payment of funds, by speaking in person with the original sender.
In the event payment is made to a fraudulent account, to notify the bank immediately of the suspected fraud. For cyber threats in general, this publication may be accessed here. If you need to call our offices out of hours and at weekends, click After Office hours for a up to date list of the names of the Duty Executives and their mobile phone numbers.
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Site search Search keyword s : Search. As such, Members may consider the following measures to minimise the risks arising from cyber fraud, including but not limited to: 1. Specify the account details in the contract, where possible. Ship Finder. Web design agency - Liquid Light. You are currently offline. Some pages or content may fail to load.
QCR Spring 2020: Cyber fraud and its potential implications K v A  EWHC 1118
Arbitration Act , Arbitration proceedings , Challenges to awards , Court intervention , Cybersecurity. The Court concluded that the Board may have reached a different view if K had had an opportunity to address the argument, and remitted the Award back to the Tribunal. After discovery of the fraud, a payment shortfall arose out of complications in the eventual payment of the purchase price to A. A sought to recover the shortfall in the arbitration. The case shows the importance of understanding where the risk passes under a contract for fraud or hacking of the type which can interfere with performance by the parties of their contractual obligations.
GAFTA: “Certificate final terms” – Caution with own agreements
Please contact customerservices lexology. A common question which arises in day to day commodity trading is whether a buyer can reject goods which do not meet the specifications set out in the contract. This blog discusses the factors which commonly come into play in determining that question. In determining whether a buyer can reject goods which do not meet the contract specification the starting point will always be the terms of the contract.
Gafta implements important contract amendments
In the case underlying the decision of R. Feed Factors International Ltd. In addition, the parties also agreed on their own provisions that should take precedence over the GAFTA conditions. While the goods were still being loaded, the buyer had a sample taken by his own expert and found that the goods were outside the specifications.