This is an application to set aside the registration under the Reciprocal Enforcement of Commonwealth Judgments Act (Chapter 24) of a judgment of the High Court of Justice, Queen's Bench Division dated October 22, 1981 and an Order of the Court of Appeal dated May 24, 1983. The judgment creditors in this case are the Bank of India which I shall refer to as "the Bank" and the first judgment debtors are the Trans Continental Commodity Merchants Limited (hereinafter referred to as "TCCM") and the second judgment debtor is Jashbai Nagjibhai Patel (hereinafter referred to as "Patel").

The facts are briefly as follows. The Bank is an Indian bank with a branch in the city of London. It carried on the business of an international bank including the handling of documentary credits and the provision of finance for exports. It also had a foreign exchange department. TCCM was one of the Bank's customers. TCCM carried on the business of trading in edible oils and other commodities. TCCM sought banking facilities in London with the Bank and these facilities included the handling of documentary credits and all the company's foreign exchange deals. These deals took the form of forward contracts for the sale or purchase of foreign exchange, under which the amount, the currency, the rate, and the date of delivery were agreed.

When TCCM became the Bank's customer a form of guarantee of TCCM's liabilities to the Bank was entered into by Patel. The guarantee was dated March 13, 1975. Thereafter the Bank handled a number of foreign exchange transactions described aforesaid. There were about 30 of such transactions in all, some of sale, some of purchase, entered into between March 11 and July 3, 1975. Of these contracts, 18 were performed satisfactorily but the remaining 12 were not. Under these 12 contracts TCCM had agreed to sell certain amounts of dollars to the Bank at specified rates of exchange, for delivery on specified dates. On the due dates for delivery of the dollars to the Bank, TCCM failed to make such delivery. Accordingly the Bank commenced proceedings against TCCM and Patel, claiming damages from TCCM for breach of contract and claiming a total of £186,000 from Patel under his guarantee. Pleadings were exchanged. On April 10, 1981 TCCM's defence and counterclaim were struck out and judgment was entered against TCCM for damages to be assessed. In the result two matters fell to be decided by Bingham J. at the trial in the High Court of Justice, Queen's Bench Division:

(1) the assessment of damages payable by TCCM and

(2) the determination of the issue of liability between the Bank and Patel, and if Patel was held liable, the determination of the sum due from him. Since TCCM for all practical purposes was no longer in existence, the crucial question before the trial judge was the liability of Patel.

Patel contested liability on a number of grounds, only two of which are relevant for our purposes. They are:

(1) that on a true construction of the terms of the guarantee it did not apply to any liability of TCCM under foreign exchange transactions of the type in question, and

(2) that the foreign exchange transactions between the Bank and TCCM were ex facie illegal, so that no liability arose in respect of them, either of TCCM itself or of Patel, under his guarantee.

Counsel for Patel sought before the trial judge and the Court of Appeal to place a restricted meaning upon his guarantee but Bingham J. rejected his submissions and held that the guarantee had been "deliberately drawn in the widest possible language so as to cover any liability of the Company to the Bank, arising out of their mutual relations as bankers and customer, however that liability might arise and whether it arose out of what may be called a pure banking activity or not." The Court of Appeal agreed both with Bingham J.'s conclusion and with his reasoning in this connection.

As regards the submission that the foreign exchange transactions were ex faci