Undue Influence And The Unconscionable Bargain

In a rare case, Mrs Justice Rose considered in detail the relationship between bankers and commercial investors and whether certain banking transactions should be rescinded, on the basis they were procured by the exercise of undue influence or further to an unconscionable bargain.

Mrs Justice Rose's judgment in The Libyan Investment Authority v Goldman Sachs International [2016] EWHC 2530 (Ch) sets out a helpful summary of how the law in these areas operates with regards commercial investors, and highlights that the courts are reluctant to be prescriptive with regard to when it will be appropriate to hold that there has been undue influence, such that the outcome in a particular case will necessarily be heavily dependent on the facts. The starting point remains that the courts will seek to uphold freedom of contract and commercial certainty unless it is clearly demonstrated in a particular case that it would not be fair to do so.