Midland Bank v. Laker Airways Ltd.

In August 1981, the Bank of England asked Midland Bank (Midland) (plaintiff), a British lender, to help rescue Laker Airways (Laker) (defendant), a financially struggling airline. Laker’s position deteriorated, but Midland offered Laker additional support without asking for more security. In February 1982, the United Kingdom’s Civil Aviation Authority informed Midland that Laker would need even more cash support. Midland told Laker that it could provide no more support and that Midland would appoint a receiver if Laker could not get support from another lender. Laker could not obtain funds elsewhere, and Midland appointed a receiver. Midland’s transactions with Laker took place in England. After its collapse in February 1982, Laker sued an aircraft manufacturer and several airlines, including British Airways and British Caledonian Airways (British airlines), for violations of United States antitrust law in a United States federal district court. Laker asserted that these firms had conspired to drive Laker from the market. Around the time that Laker’s suit was filed, Midland learned that Laker planned to add Midland as a defendant in the United States suit. Midland was indignant. In Midland’s dealings with Laker, Midland had no contact with any of the other firms involved, and the activities of Midland’s subsidiaries in the United States had no connection to any of the airlines. In November 1982, Midland asked an English court to enjoin Laker from suing Midland in the United States. In February 1983, an English court granted the injunction. However, in a related series of hearings and appeals, in July 1984, the United Kingdom House of Lords removed the injunction that had blocked Laker’s United States suit against the British airlines. An English court then removed the injunction protecting Midland. Midland’s appeal reached the England and Wales Court of Appeal.