The Court of Appeal has unanimously dismissed Logix Aero Ireland Limited’s appeal against Peters & Peters’ client Siam Aero Repair Company Ltd, upholding the High Court’s decision to strike out Logix’s claim arising from a sophisticated email interception fraud. 

The case concerned the sale of two aircraft engines and a loss of US$824,900 after Logix was deceived into paying the purchase price to unknown fraudsters in Vietnam who, intercepted email correspondence between the parties. Logix sought to recover that loss from Siam Aero alleging it had breached a binding confidentiality clause by unsuspectingly disclosing documents to the fraudsters.

At first instance, the High Court struck out the claim, finding that the buyer’s loss was caused by the independent actions of the fraudsters rather than any breach by Siam Aero.

The central issue on Logix’s appeal was causation, relying on London Joint Stock Bank v Macmillan to argue that the fraud did not sever liability. The question  was whether the alleged breach of confidence by Siam Aero caused Logix’s loss or whether the fraudsters interception broke the chain of causation. Logix’s argument failed. Philips LJ, Cockerill LJ and Jackson LJ dismissed the appeal in full confirming that the intervention of third‑party fraudsters broke the chain of causation and that Siam Aero owed no contractual duty to protect the counterparty from this type of fraud.

The decision provides important and reassuring clarity on causation, cyber fraud risk, and contractual liability in commercial transactions.

Sarah Gabriel and Paul Johnson of Peters & Peters instructed Lucy Colter KC of 4 New Square Chambers.

A link to the judgment can be found here.