The Global Reach of English Contractual Principles: Bolum v Petrus Private Bank

The recent judgment in Bolum Twenty-Three Limited & Claude Lussier v Petrus Private Bank Limited SLUHCM2023/0043 (Eastern Caribbean Supreme Court Saint Lucia Circuit, 31 July 2025) in the Eastern Caribbean Supreme Court demonstrates the extraordinary global reach of English contractual principles. This case confirms that the Braganza duty—a distinctly English legal innovation that imports public law concepts into private contracts—now, arguably, governs banking relationships across Commonwealth Caribbean jurisdictions and beyond.

For English lawyers, this judgment provides crucial confirmation that their expertise in English contractual principles has direct application in offshore financial centres.

For international banks, it establishes that operating offshore provides no escape from the rationality requirements that English law imposes on contractual discretions.

This article examines the English law foundations of the Braganza duty, analyses its application by the Eastern Caribbean court, and considers the implications for the global influence of English commercial law.

A. The Public Law Origins

The Braganza duty represents a unique English legal innovation: the transplantation of public law principles into private contractual relationships. The roots lie in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, the 1948 case that established how English courts review administrative decisions. Lord Greene MR held that courts could intervene where a public body's decision was so unreasonable that no reasonable authority could have reached it.

This Wednesbury standard became fundamental to English administrative law, providing a framework for controlling discretionary powers whilst respecting decision-makers' autonomy. The new thrust of English law was recognising that similar principles could apply to private contracts where one party holds discretionary power over another.

B. The Supreme Court's Innovation in Braganza

In Braganza v BP Shipping Limited [2015] UKSC 17, the UK Supreme Court made the conceptual leap from public to private law. The case involved BP's refusal to pay death benefits to an employee's widow, based on its opinion that the employee had committed suicide. Lady Hale, giving the leading judgment, established that contractual discretions are subject to implied constraints analogous to those in judicial review.

Lady Hale explained the two-limb test that has become central to English commercial law:

1. First Limb - Process Review: The decision-maker must act rationally in reaching their decision. They must take into account relevant matters and exclude irrelevant considerations. The process must be logical and evidence-based.
2. Second Limb - Outcome Review: The decision itself must not be outside the range of reasonable decisions. Even if the process is proper, a perverse outcome can still breach the duty.

This framework is distinctly English in its approach—pragmatic, focused on fairness, yet respectful of contractual freedom. As Lady Hale noted, English law will not rewrite bargains but will ensure powers are not abused (para 18).

C. The English Courts' Refinement

Since Braganza, English courts have refined the duty's application across commercial contexts. In Watson v Watchfinder.co.uk [2017] EWHC 1275 (Comm), the High Court applied Braganza to share option agreements. In UK Acorn Finance Ltd v Markel [2020] EWHC 922 (Comm), it governed insurance claim decisions. Each case demonstrates English law's systematic approach to controlling contractual power.

Importantly, English courts have maintained nuance. In Lehman Brothers International (Europe) v Exxonmobil Financial Services BV [2016] EWHC 2699 (Comm), Blair J recognised that between sophisticated commercial parties dealing at speed, extensive procedural requirements might be inappropriate. This flexibility—applying principles proportionately to context—exemplifies English law's commercial pragmatism.

A. The Factual Foundation

The Bolum case presented the Eastern Caribbean Supreme Court (Saint Lucia Circuit – Commercial Court) with a classic scenario for applying English contractual principles. The facts, as revealed in the judgment, involved complex cross-jurisdictional elements typical of modern offshore finance:

Bolum Twenty-Three Limited, a Bahamian company, held approximately US$3.1 million with Petrus Private Bank in Saint Lucia. The beneficial owner, Claude Lussier, had acquired these assets through a Declaration of Trust following the death of Roland Desrochers in April 2021 (para 17). The trust structure—using Bahamian entities with Saint Lucian offshore banking—represents typical offshore wealth management arrangements, found throughout the Commonwealth Caribbean.

In October 2021, the Bank received a letter from Canadian lawyers representing Ms Joycelyne Douville, Mr Desrochers' widow, claiming entitlement to the funds. The Bank immediately froze the account, relying on clause 21 of its General Terms and Conditions, which permitted action where it had "reason to believe" various circumstances existed (para 11).

B. The English Law Framework Applied

Justice St Rose-Albertini's judgment demonstrates meticulous application of English law principles. The court began by recognising that Saint Lucia, as a Commonwealth jurisdiction, follows English common law traditions. The judge then systematically applied the Braganza framework to the Bank's conduct.

The judgment explicitly adopted Lady Hale's two-limb test. First, examining the Bank's decision-making process: had it conducted proper investigations? Had it considered relevant factors? Second, assessing the outcome's reasonableness: was maintaining a freeze for nearly three years without investigation within the range of reasonable responses?

The court's analysis mirrors English judicial methodology—careful, precedent-based, yet adapted to local context. This represents English law at its best: providing a coherent framework that can be applied consistently across jurisdictions whilst accommodating local variations.

C. The Critical Findings

The Eastern Caribbean court's findings demonstrate sophisticated understanding of English law principles:

1. Initial Justification: Following English law's pragmatic approach, the court accepted the Bank's initial decision to freeze the account was reasonable—a provisional response to protect all parties (para 72).
2. The Temporal Dimension: The court recognised that what begins as reasonable can become unreasonable over time—a principle emerging from English cases on contractual discretion (para 73).
3. Investigation Obligations: Applying Braganza, the court found the Bank breached its duty by failing to investigate. The Bank never sought legal advice on whether Canadian estate law could override Bahamian trusts, despite this being central to Ms Douville's claim (para 31).
4. Procedural Failures: The judgment identified multiple procedural failures that would breach any English law standard: no documented review process, no escalation procedures, no requirements for the third party to substantiate claims (paras 74-77).

A. Understanding "Reason to Believe"

The Bank's clause 21 used the phrase "reason to believe"—language common in English-drafted commercial contracts. The Eastern Caribbean court's interpretation follows English law principles: having a reason requires more than receiving a letter; it requires rational assessment of that letter's contents and implications.

English law distinguishes between subjective belief and objective reasonableness. As the court found, the Bank could not simply assert it believed Ms Douville had a claim; it needed objectively reasonable grounds for that belief. The October 2021 letter, containing only general assertions without legal analysis or connection to the specific assets, did not provide such grounds for an indefinite freeze (para 43-46).

English law imposes positive obligations on discretion-holders. The Bolum judgment confirms that under English principles, a bank cannot remain wilfully blind to relevant information. The Bank possessed the Declaration of Trust clearly showing Mr Lussier's beneficial ownership, yet never adequately analysed its interaction with Ms Douville's claims (para 50).

This reflects English law's emphasis on informed decision-making. As established in Braganza and subsequent English cases, discretion must be exercised based on proper inquiry. The Eastern Caribbean court's application of this principle was textbook English law: identifying what investigations were necessary, finding they were not conducted, and concluding this breached the implied duty.

B. Proportionality and Time

English law recognises that proportionality is contextual and temporal. The Eastern Caribbean court's analysis demonstrates this sophistication. A brief freeze while investigating might be proportionate; a three-year freeze without investigation is not.

The judgment establishes what English law would recognise as a sliding scale: the longer a restriction continues, the stronger the justification required. After nearly three years, with Ms Douville having filed no legal proceedings despite repeated promises, the Bank's position had become untenable under any application of English law principles (para 75).

A. Why English Law Governs Offshore

The Bolum case exemplifies why English law dominates offshore finance. Most offshore financial centres—including the Eastern Caribbean, Cayman Islands, British Virgin Islands, and Bermuda—are current or former British territories that adopted English common law. Their courts follow English precedents particularly in contract, tort and crime, their lawyers train in English law (albeit increasingly there are more Caribbean trained Counsel whose LL.B still encompasses a heavy diet of English law), and their commercial contracts use English law concepts.

This creates remarkable legal coherence across jurisdictions. A contract drafted by English lawyers in London can be enforced using the same legal principles in Saint Lucia, as Bolum demonstrates. This predictability is invaluable for international finance, providing consistent standards across multiple jurisdictions.

B. The Commonwealth Commercial Advantage

The Bolum judgment highlights the Commonwealth's commercial law advantage. By sharing English legal principles, Commonwealth jurisdictions offer predictability for international business. Whether in London, Singapore, Hong Kong (for pre-existing contracts), or Castries, the same fundamental principles apply.

Justice St Rose-Albertini's judgment could have been written by an English Commercial Court judge—the same analytical framework, the same precedents, the same pragmatic balancing of commercial interests. This consistency reduces transaction costs and legal risk in international commerce.

C. Resistance and Adaptation

While Bolum shows English law's successful transplantation, challenges remain. Different jurisdictions may emphasise different aspects of English principles. The Eastern Caribbean court's focus on the three-year delay might reflect regional perspectives on reasonable timeframes. An English court might have reached the same conclusion but emphasised different factors.

This adaptive application strengthens rather than weakens English law's global influence. By allowing local courts to apply English principles to local contexts, the system maintains coherence while accommodating diversity and individuality (some may say a home brewed version of the common law).

A. Advising on Offshore Structures

English lawyers advising on offshore structures must understand that Braganza duties follow their clients globally. The Bolum case confirms that using offshore entities or banking provides no escape from English law's rationality requirements.

When drafting contracts for offshore use, English lawyers should:

• Assume Braganza duties will apply as in England
• Draft procedures that would satisfy an English court
• Advise clients that offshore locations offer tax and regulatory advantages, not exemption from English contractual principles
• Include specific timeframes and procedures that demonstrate rationality

B. Litigation Strategy

For English lawyers involved in offshore disputes, Bolum provides a roadmap. English cases can be cited directly in offshore courts—Justice St Rose-Albertini relied heavily on English authorities. The analytical framework is identical, making English expertise directly transferable.

Key litigation strategies emerging from Bolum:

• Focus on procedural failures using English standards
• Emphasise timing aspects—what would an English court consider a reasonable timeframe?
• Demand disclosure of decision-making processes as in English litigation (this is largely identical under most Commonwealth Caribbean Civil Procedure Rules)
• Use English precedents to establish expected standards

A. Confirming English Law's Global Status

Bolum confirms English commercial law's position as the global standard for international finance. The judgment shows that English principles can be successfully applied in different legal cultures while maintaining their essential character.

This matters for London's position as a legal centre. English law's predictable global application makes English legal expertise valuable worldwide. Clients choose English law not just for transactions involving England but for international deals requiring consistent standards.

B. The Evolution Through Global Application

Interestingly, offshore applications may influence English law's development. The Eastern Caribbean court's emphasis on reasonableness—that three years was manifestly excessive—might influence English courts considering similar issues.

This creates a virtuous circle: English principles applied globally generate precedents that enrich English law itself (for example through a Willers v Joyce direction).

The common law's genius lies in this capacity for evolution through application.

C. Competition and Convergence

While Bolum demonstrates English law's dominance, competition exists. New York law, Swiss law, and Singapore law offer alternatives for international contracts. However, Bolum shows English law's competitive advantages:

• Predictable application across multiple jurisdictions
• Sophisticated framework balancing flexibility and certainty
• Extensive precedent base providing guidance
• Cultural familiarity across Commonwealth jurisdictions

A. Technological Adaptation

As banking becomes increasingly automated, questions arise about applying English law principles to algorithmic decision-making. Can an algorithm exercise discretion rationally in the Braganza sense? How do English standards apply to artificial intelligence?

Offshore jurisdictions may be laboratories for adapting English principles to new technologies. The flexibility shown in Bolum suggests English law can evolve to meet these challenges while maintaining core principles.

B. Regulatory Harmonisation

Bolum highlights potential tensions between English contractual principles and local regulatory requirements. Banks must satisfy both Braganza duties and regulatory obligations. Future developments may see greater harmonisation, with regulators explicitly incorporating English law standards into their frameworks.

C. Codification Pressures

The uncertainty around applying English principles in different contexts may drive codification efforts. Industry bodies might develop codes of practice that demonstrate compliance with English standards while providing greater certainty.

However, codification risks losing English law's pragmatic flexibility. The challenge is maintaining principled coherence while preserving contextual adaptability.

The Bolum judgment represents more than a single case about frozen bank accounts. It confirms English commercial law's remarkable global reach and continuing evolution through international application.

The Eastern Caribbean Supreme Court's sophisticated application of Braganza principles demonstrates that English law provides a coherent framework for controlling contractual discretion across jurisdictions.

For English lawyers, this confirms their expertise has global value. 

he principles developed in the Commercial Court in London apply equally in Castries, George Town, or Road Town. This creates extraordinary opportunities for English legal services and reinforces London's position as a global legal centre.

For financial institutions, Bolum establishes that operating offshore provides no refuge from English law's rationality requirements. Banks must maintain consistent standards globally, implementing procedures that would satisfy an English court wherever they operate. The three-year freeze that triggered liability in Saint Lucia would equally have breached duties in London.

For the development of commercial law, Bolum shows how English principles evolve through global application. Each jurisdiction applying English law contributes to its development, creating a rich tapestry of precedent that enhances commercial certainty while maintaining flexibility.

The message from Bolum is clear: English contractual principles, particularly the Braganza duty requiring rational exercise of discretion, now represent global standards for commercial conduct. Whether drafted in London or litigated in the Caribbean, contracts governed by English law must meet these standards. This remarkable legal coherence across jurisdictions represents one of English law's greatest contributions to international commerce—a predictable, principled framework that protects against arbitrary power while preserving commercial freedom.

As global commerce becomes increasingly complex and interconnected, English law's principled yet pragmatic approach offers crucial stability. The Bolum case stands as testament to this enduring influence, showing that from the Thames to the Caribbean, from established principles to emerging challenges, English commercial law continues to shape how the world does business.