Punjab National Bank (International) Ltd v Boris Shipping Ltd & 7 Ors (2019)
A claimant was granted permission to apply for summary judgment even though default judgment was available because the defendants could have engaged with the proceedings and a summary judgment was more readily enforceable. However, the application for summary judgment was a judicial notice and it had not been served in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial documents in Civil or Commercial Matters 1965. There were no exceptional circumstances justifying an order for alternative service.
A bank applied for permission to apply for summary judgment against the third to eighth defendants and, on being granted permission, to apply for summary judgment.
The third to eighth defendants had provided personal guarantees in respect of overdraft facilities provided by the bank to the first and second defendant companies. The facility agreements and the guarantees were governed by English law, and both provided that the guarantors would appoint a UK agent to receive service of any proceedings. In 2016, the bank demanded repayment of the outstanding balances at that time. The companies failed to pay. Letters of demand were also sent to the guarantors by post to their last known address in India; by email to their last known email address; and to the UK agent by post and email. Proceedings were issued and copies of the claim documents were sent to the agent. Judgment in default was entered against the companies. Service of the claim form was effected on the fifth to seventh guarantors pursuant to the provisions of the Hague Convention on the Service Abroad of Judicial and Extrajudicial documents in Civil or Commercial Matters 1965. India had entered an objection under art.10 which meant that documents had to be served in India via the central authority. The UK had made a declaration under art.15 which meant that a writ to be served abroad had to be served by a method prescribed by the internal law of the state in question. Service of the claim forms in relation to the third, fourth and eighth defendants was not effected in accordance with the terms of the Convention. The bank could have applied for default judgment against the guarantors but preferred to apply for summary judgment to achieve a judgment on the merits. Because of difficulties serving the claim form, the bank applied for, and was granted, an order for service of the application by alternative means under CPR r.6.15.
Service of claim forms on third, fourth and eighth defendants - Although the claim forms had not been successfully served on the third, fourth and eighth defendants, art.15 had been satisfied: the documents had been sent to the foreign process section; the required period had elapsed; and no certificate of any kind had been received despite reasonable efforts to obtain such. Therefore, the court could conclude that the claim documents had been served upon those defendants (see paras 51-55 of judgment).
Permission to apply for summary judgment - A party did not have to obtain permission under r.24.4(1) before issuing a summary judgment application; the two applications could be made in the same notice, FBN Bank (UK) Ltd v Leaf Tobacco A Michailides SA  EWHC 3017 (Comm) and European Union v Syria  EWHC 1712 (Comm) considered. Permission was granted because the third to eighth defendants had had every opportunity to engage with the proceedings; the English court had jurisdiction pursuant to the exclusive jurisdiction agreement; and a summary judgment would be more readily enforceable than a default judgment, Syrian Arab Republic applied (paras 32-33).
Service of application for summary judgment - The application notice was a judicial notice to which the Convention applied, and it had to be served in accordance with the Convention's provisions. The line of authority dealing with the interplay between orders for substituted service and the Convention was not drawn to the judge's attention on the application for service by alternative means. Had it been, he would not have made the order, which should only be granted where there were exceptional circumstances. The defendants' agreement to a method of service within the jurisdiction which had not been employed could not justify a failure to serve outside the jurisdiction in a manner not provided for by the Convention. The attempts made to bring the relevant documents to the defendants' attention were insufficient because of the method of service required by the Indian government. Whether the fifth, sixth or seventh defendants could challenge jurisdiction was irrelevant to the question of service otherwise than in accordance with the Convention. That judgment in default could be entered was immaterial, as it was not the relief sought. The defendants' willingness to discuss settlement did not excuse compliance with the procedural requirements concerning service. Although the sixth defendant had responded to service of the application, that was after the date of the order for alternative service and did not justify retrospectively making an order against all defendants. There were no exceptional circumstances such that the court should retrospectively validate that order, Societe Generale v Goldas Kuyumculuk Sanayi Ithalat Ihracat AS  EWHC 667 (Comm) applied. The order for service by alternative means was set aside, making the service effected in reliance upon it invalid. Although the sixth defendant had since responded to the document and the fifth defendant had taken part in settlement discussions, that did not amount to exceptional circumstances justifying an order for service by alternative means in the future. The bank could continue with its application for summary judgment, but it had to serve the application. It could do so in the jurisdiction in reliance upon the contractual agreement in relation to service, or outside the jurisdiction pursuant to the Convention (paras 34-39, 41-44).
Applications granted in part
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