Validity of the Revocation of a Payment Order and Action for Unjust Enrichment of the Payee against the Ordering Party

Facts

[A.], domiciled in Nicosia (Cyprus), issued a written payment order on July 4, 1989 in favor of [W.], domiciled in Geneva, for amounts of $14,000 and CHF 30,000. Although [A.] revoked this payment order by telex on October 16, 1989, Bank X., the drawee, made the payment to [W.], the payee, on March 7, 1990 due to an error by one of its employees. Bank X. then initiated an action for unjust enrichment against [W.] to obtain reimbursement of the sums paid.

Considerations

The Federal Tribunal upheld W.'s appeal for reform and rejected Bank X.'s claim. It considered that the right of revocation of the payment order can be exercised by the ordering party even if the conditions for revocation towards the payee are not met. In this case, Bank X. had not notified its acceptance of the payment order to [W.] before paying him, so the revocation was valid.

Regarding Bank X.'s action for unjust enrichment against [W.], the Federal Tribunal ruled that, according to the principles developed in German case law, Bank X. could only act…