The High Court has dismissed a claim brought by a company against a bank for knowing receipt and unjust enrichment in relation to funds received by the bank in the context of an authorised push payment fraud (APP): Tecnimont Arabia Ltd v National Westminster Bank plc [2022] EWHC 1172 (Comm).

This decision will be of interest to financial institutions faced with claims from non-customers seeking the recovery of funds mistakenly transferred, as part of a cyber-fraud, to their customers’ accounts. The decision highlights that it will be difficult for non-customers to pursue such claims against a receiving bank where: (a) the funds transferred do not constitute trust property; and (b) the bank has not been enriched at the claimant’s expense.

In the present case, the court was satisfied that the bank could not be liable for knowing receipt, because the property transferred was not trust property. Further, the bank could not be liable for unjust enrichment as the bank had not been enriched “at the claimant’s expense” according to the test laid down in Investment Trust Companies v HMRC [2017] UKSC 275.

The court underlined that if it had found the opposite, it would have in any event accepted that the defence of change of position was available to the bank. The court noted that the bank would not have discovered (or been put on notice of the risk of) any fraud being committed by the customer. It could not be said that a reasonable person would either have appreciated that the transaction was probably fraudulent or would have made enquiries or sought advice which would have revealed the probability of fraud.

We consider the decision in more detail below


The claimant company (Tecnimont) was the victim of an APP fraud. Tecnimont intended to make a payment of USD 5 million to an Italian entity in its group. Shortly thereafter, a third party fraudster gained unauthorised access to the email systems of Tecnimont’s Italian entity through a phishing email. The fraudster then sent emails which appeared to originate from the Group Finance Vice President of the Italian entity, instructing Tecnimont that the funds should be sent to a bank account over which the fraudster had control (the Receiving Account). The Receiving Account was held with the defendant bank (Bank). Tecnimont, in the belief that this was a genuine request, asked its bank to transfer the USD 5 million to the Receiving Account (the Transferred Funds).

Once the Transferred Funds were deposited into the Receiving Account, the fraudster arranged for multiple international payments out of this account over the following two days. At the point at which the fraud was discovered, a majority of the funds had dissipated.

Tecnimont accepted that it was not the Bank’s customer, and that the Bank did not owe a duty of care to it. However, Tecnimont brought a claim against the Bank for knowing receipt of property subject to a trust and unjust enrichment. Tecnimont’s case was that: (a) the Transferred Funds represented trust property in which Tecnimont had an equitable proprietary interest and which was unconscionable for the Bank to retain; and (b) the Bank had been enriched at its expense and this was unjust as it resulted from a payment made under a mistake of fact induced by the fraud of a third party.

The Bank denied the claim. The Bank’s case was that it had received Tecnimont’s funds in a ministerial capacity on behalf of its customer and changed its position by paying on those funds on its customer’s instructions. At all times, it had acted in good faith, and had no knowledge or suspicion of fraud.


The court found in favour of the Bank and dismissed the claim. The key issues which may be of broader interest to financial institutions are examined below.

Knowing receipt

The court found that the knowing receipt claim failed as the Transferred Funds did not constitute trust property.

Liability for knowing receipt

The court highlighted that the equitable principle of knowing receipt imposes a liability to account as a constructive trustee of assets received by a person in breach of trust or fiduciary duty where the recipient knows of that breach of trust or fiduciary duty, or otherwise has a state of mind that makes it unconscionable for the recipient to retain the benefit of the receipt.

The court also noted the established principle in Byers v Samba Financial Group [2021] EWHC 60 (Ch) and Armstrong DLW GmbH v Winnington Networks Ltd [2013] Ch 156 that there can be no liability for knowing receipt if the transferred property is not trust property.

The court also underlined that, as per Twinsectra v Yardley [2002] UKHL 12that a cause of action lies only where the defendant has received or applied the relevant money in breach of trust for their own use.

The present case

The court commented that Tecnimont had paid away the Transferred Funds acting under a mistake induced by the deceit of a third party. The court also agreed that the property did not constitute trust property at the time it was received. Further, the Bank received the deposit for its customer and not for its own account, so there was no valid claim.

Unjust enrichment

The court found that the unjust enrichment claim failed as the Bank had not been enriched at Tecnimont’s expense. If this was wrong, the court said that, in any event, the Bank could rely on the defence of change of position.

Test for unjust enrichment

The court emphasised that, as per Banque Financiere De La Cite v. Parc (Battersea) Ltd and Others [1998] UKHL 7, in order for a claim in unjust enrichment to be made out it was necessary to establish: (a) the defendant was enriched (i.e. has benefitted); (b) the defendant’s enrichment was at the claimant’s expense; (c) the enrichment was unjust; and (d) there was no available defence.

Whether the enrichment was “at the expense” of Tecnimont

The court found that the Bank was not enriched at Tecnimont’s expense. It followed that Tecnimont had no right to restitution of any sums.

The court noted that as per Investment Trust Companies v HMRC, that there were four ways in which a claimant could satisfy the court that the defendant had been unjustly enriched at its expense (assuming there to be a “transfer of value”): (a) the claimant and defendant had direct dealings; (b) the claimant and defendant did not have direct dealings, but the substance of their dealings was such that the law would treat them as direct; (c) the claimant and defendant dealt with each other’s property; or (d) the claimant could trace an interest into property provided to the claimant by a third party.

The court noted that, in the present case, the Transferred Funds had passed through different accounts in the international banking system in order to effect the transfer from Tecnimont’s bank, Saudi British Bank SJSC (SBB), to the Bank. Consequently, the Transferred Funds could not be considered to be a ‘direct’ transfer from SBB to the Bank. Also, the parties did not deal directly with the other’s property.

The court therefore considered whether the Transferred Funds should be seen as a single scheme or transaction on the basis that it would be unrealistic to treat them in any other way than a direct transfer. The court concluded that the Transferred Funds should not be treated as being directly transferred from Tecnimont to the Bank, because to do so would not represent the transactional reality of the Transferred Funds. To do so would fail to recognise the established manner in which international bank transfers are made, and would inappropriately extend the class of cases of international bank transfers.

Accordingly, the court said that the unjust enrichment claim must fail but that it would consider the other aspects of the claim in any event (see below).

Was the enrichment unjust?

The court found (on an obiter basis) that it was satisfied that the enrichment had been unjust.

The court said that there had been a material mistake on the part of Tecnimont. It had completely been taken in by the fraud. Tecnimont’s agents had at every stage believed that they were acting on a true instruction from the Italian entity to pay the money to a bank account at the Bank. That belief was clearly wrong. The court also stated that Tecnimont did not unreasonably run the risk that it was acting on a mistake.

Whether any defences were available to the Bank?

The court found (on an obiter basis), in the event that its conclusion on whether the Bank’s enrichment had been at the expense of Tecnimont was wrong, that the Bank in any case had a complete defence to the claim. The Bank’s conduct at no stage was such that it would be unjust to permit it to rely on the defence of change of position.

The court noted that, as per Lipkin Gorman v Karpnale [1988] UKHL 12, the established principle that a change of position defence is available to a person whose position has so changed that it would be inequitable in all the circumstances to require him to make restitution, or alternatively, to make restitution in full.

The court also commented that, as per Niru Battery Manufacturing Company & Anor v Milestone Trading Ltd & Ors [2003] EWCA Civ 1446where the recipient knows that the payer has paid the money to him as a result of a mistake of fact or indeed a mistake of law, it will in general be unconscionable or inequitable to refuse restitution to the payer.

In the present case, the court noted that: firstly, nothing in the design or operation of the Bank’s systems would make it unjust to allow the Bank to rely on the change of position defence. Secondly, the Bank would not have discovered (or been put on notice of the risk of) any fraud being committed by the customer. It could not be said that a reasonable person would either have appreciated that the transaction was probably fraudulent or would have made enquiries or sought advice which would have revealed the probability of fraud. In the court’s view, none of the Bank’s conduct had been unconscionable. Thirdly, the payment out of money from the Receiving Account was essentially an automated process. The final transfer out was not actively authorised by the Bank and was instead “permitted” by the Bank’s automated processes. In the court’s opinion, the delay in freezing the Receiving Account was not such that it would be unjust to allow the Bank to rely on the defence of change of position.

Accordingly, for all the reasons above, the court found in favour of the Bank and dismissed the claim.



Ceri Morgan
Ceri Morgan
Professional Support Consultant
+44 20 7466 2948
Nihar Lovell
Nihar Lovell
Professional Support Lawyer
+44 20 7374 2589
Ariel Wiebe
Ariel Wiebe
+44 20 7466 3844