CAA Travel Media v The Co-Operative Bank
CAA had an agreement with Buy Sell Cyprus to advertise its properties in Cyprus on Sky Channel 679, run by CAA Travel Media Ltd. Under the agreement, Buy Sell was obliged to issue a letter of guarantee for CYP108,384, which would be paid in the case of default. Buy Sell then arranged with the Co-op to issue a letter of guarantee. Buy Sell failed to comply with the agreement, which allowed CAA Travel to exercise its right to ask for the letter of guarantee. However, the Co-Op then refused to pay the amount, alleging that Buy Sell had ordered them not to pay due to a default by CAA.
CAA took legal action, represented by Georgiades & Mylonas, and applied for a summary judgment against the director of the Co-Op. The Court considered the principle of independence of documentary credit, which is an English legal principle. The action was successful, with the Co-Op being ordered to pay. The Co-Op filed an appeal in the Supreme Court and contested that the case was not one for a summary judgment and that it has a defence in the action. Simultaneously, it filed a petition in the District Court seeking a stay of execution of the judgment pending the appeal. CAA objected and the Court decided that there were no special circumstances in the case for granting a stay of execution.
The District Court, in its decision, followed the English case of Hammond Suddard v Agrichem International Holdings Ltd  EWCA Civ 2065, para. 22 where Clarke LJ said, “Whether the court should exercise its discretion to grant a stay will depend upon all the circumstances of the case, but the essential question is whether there is a risk of injustice to one or other or both parties if it grants or refuses a stay. In particular, if a stay is refused what are the risks of the appeal being stifled? If a stay is granted and the appeal fails, what are the risks that the respondent will be unable to enforce the judgment? On the other hand, if a stay is refused and the appeal succeeds, and the judgment is enforced in the meantime, what are the risks of the appellant being able to recover any monies paid from the respondent?” Accordingly, it rejected the petition and ordered the Co-Op to pay the money regardless of the appeal. The appeal is pending in the Supreme Court and will be fixed for hearing during 2008.