Logix Aero v Siam Aero: Court of Appeal confirms fraud breaks causation chain in email interception claims

The Court of Appeal has dismissed a claim by an Irish aviation company seeking to recover US$824,900 lost to email interception fraudsters, holding that an assumed breach of a confidentiality clause by the Thai seller could not be said to have caused the loss. The judgement in Logix Aero Ireland Limited v Siam Aero Repair Company Limited [2026] EWCA Civ 510, handed down on 29 April 2026, offers a careful analysis of causation in contract where third-party fraud intervenes between a breach and the resulting loss.

The dispute arose from the purchase of two Pratt & Whitney 127 aircraft engines. As the parties finalised the transaction by email, unknown fraudsters intercepted the correspondence and substituted their own Vietnamese bank account details for Siam Aero's Thai account in the purchase documentation. Logix paid the full balance — relying entirely on the fraudulently altered documents and without independently verifying the payment details — before the deception was discovered. The funds had by then been withdrawn.

Logix's surviving ground of claim was that Siam Aero had breached a binding confidentiality clause within an otherwise non-binding Letter of Intent, by disclosing documents and information to the fraudsters — albeit unwittingly — during the email exchange. At first instance, Mrs Justice Heather Williams accepted the breach was arguable but struck out the claim on causation, finding Logix's loss had been caused by the fraudsters, not by Siam Aero's communications.

The Court of Appeal agreed. Lord Justice Phillips, giving the leading judgement (with which Lord Justice Peter Jackson and Lady Justice Cockerill agreed), identified three distinct mechanisms by which an intervening third-party act may break the chain of causation: the breach may cease to be the "effective" or "dominant" cause of the loss; the loss may fall outside the scope of duty assumed under the contract; or the loss may be too remote under the first limb of Hadley v Baxendale.

Logix had sought to rely on London Joint Stock Bank v Macmillan and Arthur [1918] AC 777, arguing that where a defendant owes a contractual duty to prevent the very intervention that caused the loss, the chain of causation is not broken. Phillips LJ rejected that reading. Macmillan rested on a specific contractual duty owed by a bank customer to draw cheques with care to prevent forgery — forgery being the precise risk against which the duty was directed. The confidentiality clause here was concerned with protecting commercially sensitive information from competitors, not with guarding against fraud perpetrated through the manipulation of anodyne transactional documents.

Critically, the fraud preceded and itself caused Siam Aero's assumed breach: the fraudsters had already inserted themselves into the correspondence before Siam Aero sent the documents complained of. Siam Aero's communications were one of several necessary stages engineered by the fraudsters, not the operative cause of Logix's payment to the wrong account. The final act of deception — substituting the bank details and deceiving Logix into making payment — involved no participation by Siam Aero at all.

Phillips LJ noted that the case might equally have been decided on scope of duty or remoteness grounds, and added that it was far from clear Siam Aero had "disclosed" its own information within the clause's meaning at all.

The judgement underlines that satisfying the "but for" test of factual causation is insufficient where a voluntary third-party act intervenes. A breach that merely creates the opportunity for fraud, rather than causing it, will not found a damages claim — whatever the sophistication of the interception scheme.