Sullivan Advises Lloyds Bank on the UK’s First Digital Equivalent "Promissory Note" Purchase

London, UK – International law firm Sullivan & Worcester in London has advised Lloyds Bank on the template structure for what is described as the UK’s first digital "promissory note" purchase, structured in this specific way. It represents the first transaction to use the International Trade and Forfaiting Association’s (ITFA) Digital Negotiable Instrument initiative (DNI) issued using Enigio’s solution trace; original.

The bank has said that this landmark transaction has the potential to dramatically increase the speed of payment in trade from several days to a matter of hours. It also paves the way for a significant increase in the use of the structural equivalent digital promissory notes for a broad range of transactions. This was foreseen by the ITFA DNI initiative and those, including Sullivan, who worked on it.

The digital promissory note works within English contract law and uses the ITFA dDOC specifications, under the DNI. This first 'pilot' transaction by Lloyds Bank using this method to evidence the creation and purchase of the digital promissory note was initiated and completed within the day, on August 18, and involved the sale and purchase of land worth £48 million between several UK businesses.

Geoffrey Wynne, partner and head of the Trade & Export Finance Group at Sullivan, commented: "Sullivan is delighted to have advised Lloyds Bank on the template structure for this innovative transaction. The development of this, the first digital equivalent promissory note issued in this way, will be closely watched by the market as a whole as it has the potential to be a real game changer in terms of the speed of creation and transfer of the payment obligation that it offers.

It is a particularly welcome development as it is a work-around solution to the requirement of the Bills of Exchange Act that requires that promissory notes need to be issued and delivered in a physical form, which has been much discussed recently, accelerated by the pandemic. The growth in this area will be further increased once the UK’s Electronic Trade Documents Bill becomes law."

The Sullivan team advising Lloyds Bank was led by trade and export finance partner Geoffrey Wynne.

You can read Lloyds Bank’s press release in full here.

About Sullivan
Sullivan & Worcester (Sullivan) is a leading AmLaw 200 law firm with over 200 attorneys in Boston, London, New York, Tel Aviv and Washington, DC. Sullivan’s clients, including Fortune 500 companies and emerging businesses, rely on Sullivan’s strategic vision, comfort with complexity and intense focus on results. As a global law firm, Sullivan’s reach extends beyond the United States. Sullivan has represented clients around the world and has a deep bench for working on a variety of matters and issues affecting clients globally.

Sullivan’s London office is located at Tower 42 in the heart of the City of London. Details are as follows: 25 Old Broad Street, London EC2N 1HQ, Tel: +44 (0)20 7448 1000.

Contacts:

Geoffrey Wynne
Partner, Head of the Trade & Export Finance Group
Sullivan & Worcester UK LLP
+44 (0)20 7448 1001
gwynne@sullivanlaw.com

Will Hulbert
PR
Hulbert & Co
+44 (0)1603 431 936 | +44 (0)7774 108 699
will@hulbertandco.com