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England and Wales High Court (Commercial Court) Decisions
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Cite as:  EWHC 19 (Comm)
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Neutral Citation Number:  EWHC 19 (Comm)
Case No: CL-2021-000397
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
THE HONOURABLE MR JUSTICE HENSHAW
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BARCLAYS BANK PLC
- and –
BAVAGUTHU RAGHURAM SHETTY
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Adrian de Froment (instructed by Simmons & Simmons LLP) for the Claimant
Kajetan Wandowicz (instructed by Farrer & Co LLP) for the Defendant
Hearing date: 17 December 2021
Draft judgment circulated: 23 December 2021
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Covid-19 Protocol: This judgment was handed down by the judge remotely by circulation to the parties’ representatives by email and release to Bailii. The date and time for hand-down is deemed to be 10 January 2022 at 10:30 am
Mr Justice Henshaw:
(1) The Parties
(3) The Guarantee
(4) The DIFC Claim
(2) Legal principles
(2) Summary judgment
(b) Public policy
(c) Natural justice
(B) FACTUAL BACKGROUND
(1) The Parties
(2) UAEEC’s foreign exchange transactions with Barclays
(3) The Guarantee
“guarantees to Barclays the punctual performance by [UAEEC] of each and every obligation and liability [UAEEC] may now or hereafter have to Barclays in whatever currency denominated (whether due, owing, deliverable, or incurred from time to time, whether present or future, actual or contingent, solely or jointly with one or more persons, several or otherwise, in connection with the Banking Facilities (“the Liabilities”).”
“Banking Facilities” were defined to mean:
“…such facilities or other accommodation as Barclays may make or continue to make available to [UAEEC], including, without limitation, any derivative, risk management or hedging products, facilities or transactions entered into or to be entered into with [UAEEC].”
“(ii) [the Guarantor] undertakes to Barclays that whenever the Customer does not pay any amount when due under or in connection with the Banking Facilities, the Guarantor shall immediately on demand pay that amount as if it was the primary obligor; and
(iii) agrees with Barclays that if any obligation guaranteed by it is, or becomes, unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify Barclays immediately on demand against any cost, loss or liability it incurs as a result of the Customer not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it in connection with the Banking Facilities on the date when it would have been due. …”
“As a further separate and independent obligation, the Guarantor will indemnify Barclays in full and on demand against all losses, costs and expenses suffered or incurred by Barclays arising from or in connection with: (a) the failure by the Customer fully and promptly to perform [UAE Exchange’s] obligations in connection with the Banking facilities, (b) the enforcement of the Customer’s obligations, (c), the failure of the Guarantor promptly to perform [his] obligations under this Guarantee, and (d) the enforcement of this Guarantee.”
“Neither the obligations of the Guarantor in this Guarantee nor the rights, powers and remedies conferred in respect of the Guarantor upon Barclays by this Guarantee or by law shall be discharged, impaired or otherwise affected by:
(ii) any of the Liabilities or any of the obligations of the Customer or any other person under any security relating to the Liabilities being or becoming illegal, invalid, unenforceable or ineffective in any respect;
(iii) any time or other indulgence being granted or agreed to be granted by Barclays to, or any composition or other arrangement made with or accepted from:
(a) The Customer in respect of the Liabilities or any of them, or
(b) any person in respect of any such other security, rights or claims in respect of any of the Liabilities;
(iv) any amendment to, or any variation, waiver or release of, any of the terms of any of the Liabilities or any other security, rights or claims, however material;
(vii) any other act, event or omission which, but for this Clause 3.2, would or might operate to discharge, impair or otherwise affect any of the obligations of the Guarantor in this Guarantee or any of the rights, powers or remedies conferred upon Barclays by this Guarantee or by law.”
“All payments to be made by the Guarantor to Barclays under this Guarantee shall be made without set-off or counterclaim and without any deduction or withholding whatsoever.”
“20.1. Subject to Clause 20.3 below, the DIFC Courts have exclusive jurisdiction to settle any dispute arising from or connected with this Guarantee (including a dispute regarding the existence, validity or termination of this Guarantee or relating to any non-contractual or other obligation arising out of or in connection with this Guarantee) or the consequences of its nullity (a “Dispute”).
20.2. Both parties irrevocably submit to the jurisdiction of the DIFC Courts and waive any objection they may have to any Dispute being heard in the DIFC Courts on the grounds that it is an inconvenient forum (forum non conveniens).”
(Clause 20.3 gave Barclays the option to sue instead in any other court with jurisdiction.)
(4) The DIFC Claim
i) a version of the Master Agreement had been forged and the signatories on behalf of UAEEC lacked the authority of UAEEC to execute the Agreement on its behalf;
ii) the FX transactions were outside the scope of the Guarantee because they did not fall within the definition of “Banking Facilities”;
iii) Barclays’ “losses” must have been the result of “a major systemic failure”, “gross incompetence” or a conscious decision by Barclays amounting to dishonest conduct. Any one or a combination of these scenarios would amount to multiple breaches of the prudential and financial regulatory regime administered by the Bank of England;
iv) by continuing to trade in the face of the losses being accumulated, there must have been a variation to or replacement of the trading relationship under the Master Agreement;
v) UAEEC was not liable to Barclays because Barclays did not terminate its commercial dealings with UAEEC promptly, when failed settlements started accumulating on 10 March 2020;
vi) Dr Shetty was entitled to notice as soon as Barclays continued trading with UAEEC after any default had occurred, because this constituted a change in the contractual arrangements between Barclays and UAEEC;
vii) Barclays’ claim was unenforceable on the grounds of illegality;
viii) the transactions subsequent to the first default were outside the terms of the Master Agreement; and
ix) the doctrine of “purview” precluded Barclays’ claim (i.e. the principle that a surety is discharged by variations of the agreement guaranteed that are outside the ‘general purview’ of the guarantee: DIFC Judgment § 156).
i) Dr Shetty’s contentions with respect to the validity of the execution of the Master Agreement had been “shown to be entirely without substance” and provided “no plausible support whatsoever for the proposition that there should be a trial of the issues in this case.” (§ 95).
ii) The contention that the FX transactions giving rise to UAEEC’s liability fell outside the terms of the guarantee was “entirely without substance” (§ 123).
iii) Neither negligence nor breach of regulatory obligation, even if established, would give rise to any defence to Barclays’ claim: citing Bingham J’s observations in Bank of India v Patel  1 Lloyds Rep 506, 515. Further, there was “no evidence whatever to support any assertion of dishonesty, fraud, impropriety, concealment or connivance in the defaults by Barclays” (§ 136).
iv) For the same reasons, it did not matter when Barclays first became aware of the defaults by UAEEC (§ 136).
v) No “reason in law or logic” had been advanced in support of the “perverse proposition” that UAEEC should not be obliged to repay Barclays for funds which it advanced on its behalf merely because Barclays could or should have refused to undertake those transactions and advance those funds in protection of its own interests. There was “absolutely no evidence” to support any “wild speculation” that Barclays had “connived with fraudsters within UAEEC in order to perpetrate a fraud on that company” (§ 138).
vi) No source of Barclays’ alleged obligation to give notice to Dr Shetty had been identified, nor any authority provided in support of the proposition. There was no provision in the Guarantee capable of supporting this proposition, nor any general principle of law to this effect (§ 140).
vii) Neither the circumstances of the case nor any of the authorities to which reference was made provided “any support whatever” for the proposition that the doctrine of illegality might provide a realistic prospect that Dr Shetty might successfully defend the claim (§ 149).
viii) The assertion that dealings between Barclays and UAEEC fell outside the terms of the Master Agreement was “without substance” and would not in any event provide Dr Shetty with any realistic prospect of successfully defending the claim (§ 154).
ix) It was “inconceivable” that the doctrine of purview could have any application to the circumstances of the case (§ 157).
(5) The Indian Orders
i) An order dated 15 July 2020 made by the District Court, D.K. Mangaluru, on the application of ICICI Bank, granting a “temporary injunction as prayed under [Interim Application] No.1”, namely “exparte ad-interim order of temporary injunction” “granted till next date” that:
“The defendant, his agents is hereby restrained from directly or indirectly alienating, selling, transferring, encumbering, mortgaging, creating charge or right of any third party or otherwise dealing with any assets and properties including shares, mutual funds, amount deposited in Bank etc., without prior written consent of the plaintiff, till next date of hearing.”
ii) An order dated 14 August 2020 made by the Commercial Court in Bengaluru, on the application of the Commercial Bank of Dubai. This also appears to have been an “exparte ad-interim order of temporary injunction” and to have restrained Dr Shetty:
“and/or anybody claiming through him from transferring, alienating or otherwise dealing with, disposing of or creating any third party interests or encumbering in any manner any property and assets not detailed in the Schedule-A,B,C or D annexed to the Plaint and including shares, bonds, mutual funds, investments, money deposited in bank account and fixed deposits.”
I have not been referred to any of the Schedules. The return date was stated to be 7 September 2020. A further order in the same case dated 24 September 2021 appears to have extended the order until the next hearing stated to be on 2 November 2021.
iii) An order dated 17 April 2021 made by the High Court of Karnataka, Bengaluru, on the application of the Bank of Baroda. This order applied to both Dr Shetty and his wife, Dr Chandrakumari Raghuram Shetty. The order provided that “There will be a temporary injunction against the defendants in terms of prayers made in I.A. Nos. I and II of Commercial Original Suit No. 1 of 2020. However, as regards the other assets (other than immoveable property described in item Nos 1 to 13 and 16 of plaint schedule) held by the first defendant, it will be always open for the first defendant to apply to the plaintiff Bank for grant of permission to transfer the same”. The prayer made in I.A. No. I related to Dr Shetty and sought to restrain him:
“his agents, or any person acting under or through him, from, in any manner whatsoever, directly or indirectly, alienating, selling, transferring, encumbering, dissipating, mortgaging, pledging, creating a lien, creating any third party rights or otherwise dealing with any of his assets or properties, movable or immovable, tangible or intangible, including without limitation, the immovable properties specified in the Schedule to the Letter of Undertaking with Negative Lien and Creation of Mortgage dated 21.04.2020 as owned by [Dr Shetty], his shares, mutual funds, monies deposited in bank accounts and fixed deposits, in the interest of justice and equity.”
(6) The present proceedings
(C) THE ADJOURNMENT APPLICATION
(1) Further background to the application
i) he is subject to freezing orders in various jurisdictions which are limited in value, such as the WFO granted by the DIFC Court up to the value of US$ 135 million, or which contain exemptions allowing sums to be spent on legal advice and/or representation;
ii) however, he understands that the Indian Orders have no such limitations or exemptions, so that they in essence paralyse him financially and prevent him spending money on lawyers;
iii) Farrer & Co represent him in other proceedings in this court, for which they are paid directly by insurers. These relate to the fraud concerning his NMC business whose holding company is now in administration in London. Dr Shetty adds that he has, in that connection, brought proceedings in New York against a former senior manager, Mr Manghat, and his associates;
iv) Farrer & Co have also kindly agreed to assist him with the adjournment application even though he cannot currently pay for their services, but he cannot expect them (or any other solicitors) to represent him without payment on a claim for US$130 million, nor would he want to: he has always paid for professional services;
v) he is “now only represented in proceedings where my lawyers are paid by insurers, or whether they agree to extend credit to me, or if they are paid by my well-wishers where such expenses are comparatively low”;
vi) his lawyers in India, MZM, “are preparing applications on my behalf to vary” the Indian Orders, “I hope and expect that these orders will be varied within about 3 or 4 months”, and “I can confirm, assuming that MZM will be content to represent and act on my behalf either on credit or some payment made by my well-wishers for the time being that I have instructed them to apply for the necessary variations so that I can at least pay for legal expenses”;
vii) although as an international businessman he is fluent in English, and would feel comfortable giving oral evidence in English, he does not have the necessary command of legal language, or knowledge of the law or procedure, to defend himself in the present proceedings; and
viii) he normally lives in the UAE, but when he attempted to return there in November 2020 he was stopped by Indian border officials.
i) Dr Shetty had had the benefit of Farrer & Co’s support in these proceedings since at least 7 September 2021, when Farrer & Co emailed Simmons & Simmons indicating that they had been consulted by Dr Shetty and were taking instructions from him;
ii) although Dr Shetty’s letter of 26 September 2021 stated that he would be acting as a litigant in person, it appears to have been prepared by or with the assistance of lawyers;
iii) De Shetty had been formally represented by Farrer & Co for the last week, since they came on the record on 10 September 2021;
iv) Dr Shetty had the benefit of legal representation throughout the DIFC Court proceedings, and the opportunity to have all his arguments and defences heard with the benefit of that legal representation;
v) two of the three Indian Orders pre-dated Barclays’ Immediate Judgment application in the DIFC, and the extensive legal representation Dr Shetty had in those proceedings, making it hard to see how Dr Shetty could have had that representation if the effect of the orders were to prevent him being represented now in the present proceedings;
vi) Dr Shetty has also been able to fund other international litigation in which he is the claimant, in particular a suit he has filed in New York against Bank of Baroda, Credit Europe Bank NV, Ernst & Young Global Limited, Ernst & Young EMEIA Limited and various others as co-conspirators in an alleged fraud alongside former executives of NMC Health, in which Dr Shetty claims around US$ 7 billon;
vii) Dr Shetty had ample opportunity to advance his alleged counterclaim in the DIFC proceedings;
viii) no explanation has been provided for why Dr Shetty waited until nine days before the present hearing to request an adjournment; and
ix) Farrer & Co’s letter of 7 December 2021 requested Barclays’ consent to the sale of Flat PH2, raising the concern that Dr Shetty’s only known English asset might be dissipated. The flat was currently subject to a worldwide freezing order by ADCB, but a decision was expected in January 2022 on Dr Shetty’s application in those proceedings to challenge the jurisdiction and unfreeze his assets. If the flat were sold then Barclays’ claim here would become meaningless.
(2) Legal principles
“20. Before I consider these points in turn, I would make some general observations on adjournments. Every tribunal or court has a discretion to grant an adjournment, and the exercise of such a discretion, going as it does to the management of a case, is one with which an appellate body is slow to interfere and can only interfere on limited grounds, as has repeatedly been recognised. But one recognised ground for interference is where the tribunal or court exercising the discretion takes into account some matter which it ought not to have taken into account … Although an adjournment is a discretionary matter, some adjournments must be granted if not to do so amounts to a denial of justice. Where the consequences of the refusal of an adjournment are severe, such as where it will lead to the dismissal of the proceedings, the tribunal or court must be particularly careful not to cause an injustice to the litigant seeking an adjournment. …
21. A litigant whose presence is needed for the fair trial of a case, but who is unable to be present through no fault of his own, will usually have to be granted an adjournment, however inconvenient it may be to the tribunal or court and to the other parties. That litigant's right to a fair trial under Article 6 of the European Convention on Human Rights demands nothing less. But the tribunal or court is entitled to be satisfied that the inability of the litigant to be present is genuine, and the onus is on the applicant for an adjournment to prove the need for such an adjournment.”
“31. …The point on which Mr Davenport lays all emphasis is the fact that proper legal representation was now within the defendant's grasp if the judge would adjourn the case. If that meant three months' delay, it was, he submits, an entirely fair price to pay for equality of arms.
32. It is this which has given us the greatest pause. In deciding whether it was a factor which made it clearly unfair to proceed with the trial, however, it is necessary to look a little further. ...
33. What confronted Eady J, however, was an assertion that money, in a large sum and from a still mysterious source, was going to be available. What was strikingly absent was so much as a letter from McGrigors or any other firm of solicitors confirming their preparedness to act and the reliability of the promised funding. It is unsurprising in these circumstances that the judge took the view that there was “no clarity” about it. It was less significant in this situation that he was also dubious about counsel's availability. If sound evidence of dependable funding had been put before him, we might very well have held that individual counsel's availability was not a sufficient reason for denying the defendant the benefit of it. But what was critical for the judge, as it has to be for us, is that even on the Monday it appeared unlikely that an adjournment would achieve anything because there was no sufficient reason to believe that the promised money would materialise.”
Terluk was, Dr Shetty says, an extreme case where there had been years of delay, to the claimant’s disadvantage, and there was no prospect of the defendant obtaining legal representation in the future, but merely a vague promise of a large sum of money appearing from a mysterious source.
“… the authorities make clear that, in reviewing the exercise of discretion, the Court of Appeal has to be satisfied that the decision to refuse the adjournment was not "unfair": for example, see Terluk v Berezovsky  EWCA Civ 1345 (per Sedley LJ at paras 18-20), quoted below, particularly in circumstances where his right to a fair trial under Article 6 ECHR is at stake”
and the passages from Teinaz §§ 21 and 22 quoted above. On the facts, the court concluded:
“44. In my judgment, therefore, this was one of the rare circumstances, as considered by Peter Gibson LJ in Teinaz, where an adjournment had to be granted, because not to do so amounted to a denial of justice. The consequences of the refusal of an adjournment in this case, apparently based on the judge's personal assessment of a litigant in person's health, notwithstanding the appellant's general practitioner's view that he was suffering from depression, were particularly severe. The appellant's defence was struck out and he was deprived of an opportunity to give live evidence, to cross-examine any of the respondents' witnesses or to call evidence on his own behalf. The respondents' evidence was adduced without any challenge since the two witnesses called did nothing more than state that their witness statements were true. Moreover, the appellant faced a claim for what, so far as he was concerned, was a substantial sum in damages and resultant legal costs.
45. I have no doubt that, on a proper evaluation of the relevant considerations, the appellant's Article 6 rights and the irreversible prejudice occasioned to him as a result of the refusal of an adjournment, clearly outweighed the costs and unavoidable inconvenience to the respondents that would have been occasioned by a short adjournment.”
“30. … the guiding principle in an application to adjourn of this type is whether if the trial goes ahead it will be fair in all the circumstances; that the assessment of what is fair is a fact-sensitive one, and not one to be judged by the mechanistic application of any particular checklist; that although the inability of a party himself to attend trial through illness will almost always be a highly material consideration, it is artificial to seek to draw a sharp distinction between that case and the unavailability of a witness; and that the significance to be attached to the inability of an important witness to attend through illness will vary from case to case, but that it will usually be material, and may be decisive. And if the refusal of an adjournment would make the resulting trial unfair, an adjournment should ordinarily be granted, regardless of inconvenience to the other party or other court users, unless this were outweighed by injustice to the other party that could not be compensated for.”
and (by reference to the appellant’s submissions):
“49. Mr Scorey's propositions were as follows:
(1) Whether as a matter of the common law's insistence on a fair trial, or the requirements of Article 6 , or the application of the overriding objective, the test is the same, namely whether a refusal of an adjournment will lead to an unfair trial.
I agree. This is a consistent thread from the early cases … which refer to a miscarriage of justice or an injustice, through Teinaz ("a denial of justice") to the more recent cases, which repeatedly identify the question as one of fairness: see in particular Terluk at  and Solanki at .
(3) When considering whether a particular outcome is fair, it should not be assumed that only one outcome is fair.
This is established by the authorities: Terluk at , Dhillon [Dhillon v Asiedu  EWCA Civ 1020] at [33(b)]. But equally in some circumstances there is really only one answer: see Teinaz at  ("some adjournments must be granted").
(4) Fairness involves fairness to both parties. But inconvenience to the other party (or other court users) is not a relevant countervailing factor and is usually not a reason to refuse an adjournment.
This is again established by the authorities. As to fairness involving fairness to both parties, see Dhillon at [33(a)], Solanki at . As to the requirements of a fair trial taking precedence over inconvenience to the other party or other court users, see Teinaz at . But Mr Scorey acknowledged, as can be seen from the earliest cases, that uncompensatable injustice to the other party may be a ground for refusing an adjournment.”
“whether Mrs. Airey’s appearance before the High Court without the assistance of a lawyer would be effective, in the sense of whether she would be able to present her case properly and satisfactorily” (§ 24)
On the facts, the court concluded that the answer was no:
“It seems certain to the Court that the applicant would be at a disadvantage if her husband were represented by a lawyer and she were not. Quite apart from this eventuality, it is not realistic, in the Court's opinion, to suppose that, in litigation of this nature, the applicant could effectively conduct her own case, despite the assistance which, as was stressed by the Government, the judge affords to parties acting in person.
In Ireland, a decree of judicial separation is not obtainable in a District Court, where the procedure is relatively simple, but only in the High Court. A specialist in Irish family law, Mr. Alan J. Shatter, regards the High Court as the least accessible court not only because 'fees payable for representation before it are very high' but also by reason of the fact that 'the procedure for instituting proceedings … is complex particularly in the case of those proceedings which must be commenced by a petition', such as those for separation.
Furthermore, litigation of this kind, in addition to involving complicated points of law, necessitates proof of adultery, unnatural practices or, as in the present case, cruelty; to establish the facts, expert evidence may have to be tendered and witnesses may have to be found, called and examined. What is more, marital disputes often entail an emotional involvement that is scarcely compatible with the degree of objectivity required by advocacy in court.
For these reasons, the Court considers it most improbable that a person in Mrs. Airey's position … can effectively present his or her own case. This view is corroborated by the Government's replies to the questions put by the Court, replies which reveal that in each of the 255 judicial separation proceedings initiated in Ireland in the period from January 1972 to December 1978, without exception, the petitioner was represented by a lawyer ….
The Court concludes from the foregoing that the possibility to appear in person before the High Court does not provide the applicant with an effective right of access and, hence, that it also does not constitute a domestic remedy whose use is demanded by Article 26 ...” (§ 24, footnotes omitted)
“64. As for the complexity of the proceedings, the Court recalls its finding in the McVicar judgment that the English law of defamation and rules of civil procedure applicable in that case were not sufficiently complex as to necessitate the grant of legal aid. The proceedings defended by Mr McVicar required him to prove the truth of a single, principal allegation, on the basis of witness and expert evidence, some of which was excluded as a result of his failure to comply with the rules of court. He had also to scrutinise evidence submitted on behalf of the plaintiff and to cross-examine the plaintiff's witnesses and experts, in the course of a trial which lasted just over two weeks.
65. The proceedings defended by the present applicants were of a quite different scale. The trial at first instance lasted 313 court days, preceded by 28 interlocutory applications. The appeal hearing lasted 23 days. The factual case which the *429 applicants had to prove was highly complex, involving 40,000 pages of documentary evidence and 130 oral witnesses, including a number of experts dealing with a range of scientific questions, such as nutrition, diet, degenerative disease and food safety. Certain of the issues were held by the domestic courts to be too complicated for a jury properly to understand and assess. The detailed nature and complexity of the factual issues are further illustrated by the length of the judgments of the trial court and the Court of Appeal, which ran in total to over 1,100 pages.
66. Nor was the case straightforward legally. Extensive legal and procedural issues had to be resolved before the trial judge was in a position to decide the main issue, including the meanings to be attributed to the words of the leaflet, the question whether the applicants were responsible for its publication, the distinction between fact and comment, the admissibility of evidence and the amendment of the Statement of Claim. Overall, some 100 days were devoted to legal argument, resulting in 38 separate written judgments.
67. Against this background, the Court must assess the extent to which the applicants were able to bring an effective defence despite the absence of legal aid. In the above-mentioned McVicar case, it placed weight on the facts that Mr McVicar was a well-educated and experienced journalist, and that he was represented during the pre-trial and appeal stages by a solicitor specialising in defamation law, from whom he could have sought advice on any aspects of the law or procedure of which he was unsure.” (§§ 64-67, footnotes omitted)
“7. The applicable principles on an adjournment application can be traced back to the overriding objective in CPR 1.1 ; the notes in the White Book at paragraph 3.1.3; and the decision of the Court of Appeal in Boyd and Hutchinson (a firm) v Foenander  EWCA Civ 1516 In particular, the court must endeavour to ensure that:
(a) the parties are on an equal footing;
(b) the case is dealt with proportionately, expeditiously and fairly;
(c) a proportionate and appropriate share of the court's resources is allocated to the case, taking into account the need to allot resources to other cases.
8. In paragraph 9 of the judgment in Fitzroy Robinson v Mentmore Towers No 2  EWHC 3070 TCC , I identified a number of particular matters which may be relevant to a contested application for an adjournment, although at least some of these are specifically referable to applications made at the eleventh hour. They were:
“(a) The parties' conduct and the reason for the delays;
(b) The extent to which the consequences of the delays can be overcome before the trial;
(c) The extent to which a fair trial may have been jeopardised by the delays;
(d) Specific matters affecting the trial, such as illness of a critical witness and the like;
(e) The consequences of an adjournment for the claimant, the defendant, and the court”
9. In essence, on an application of this sort, the court is faced with a balancing exercise between, on the one hand, the obvious desirability of retaining a fixed trial date (which promotes certainty) and avoiding any adjournment (which can only add to the costs of the proceedings) and, on the other, the risk of irredeemable prejudice to one party if the case goes ahead in circumstances where that party has not had proper or reasonable time to prepare its case.”
Coulson J concluded that the case could be properly and fairly prepared in the 4½ months remaining before the (unadjourned) trial date, and refused an adjournment.
(D) SUMMARY JUDGMENT: PRINCIPLES
(1) Enforcement of DIFC judgments
“33. There is no treaty dealing with the recognition and enforcement of judgments between the United Kingdom and United Arab Emirates (“UAE”). As such, judgments of the DIFC courts can be enforced only at common law.
34. At common law, where a foreign court of competent jurisdiction determines that a certain sum is due from one person to another, a legal obligation arises on the debtor to pay that sum, which can be enforced in the courts of England & Wales. The relevant common law principles are summarised in Dicey, Morris & Collins on the Conflict of Laws (15th ed) (“Dicey”) § 14R-020 (Rule 24) and in the Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen’s Bench Division, England and Wales issued in January 2013 (“the Memorandum”).
35. The Memorandum includes a helpful summary of the requirements for common law enforcement of foreign judgments:
“10. In order to be sued upon in the Commercial Court, a judgment of the DIFC Courts must be final and conclusive. It may be final and conclusive even though it is subject to an appeal.
11. The Commercial Court will not enforce certain types of DIFC Court judgments, for example judgments ordering the payment of taxes, fines or penalties.
12. The DIFC Courts must have had jurisdiction, according to the English rules of the conflict of laws, to determine the subject matter of the dispute. The Commercial Court will generally consider the DIFC Courts to have had the required jurisdiction only where the person against whom the judgment was given:
a. was, at the time the proceedings were commenced, present in the jurisdiction; or
b. was the claimant, or counterclaimant, in the proceedings; or
c. submitted to the jurisdiction of the DIFC Courts; or
d. agreed, before commencement, in respect of the subject matter of the proceedings, to submit to the jurisdiction of the DIFC Courts.
13. Where the above requirements are established to the satisfaction of the Commercial Court, a DIFC Court judgment may be challenged in the Commercial Court only on limited grounds. Those grounds include (but are not limited to):
a. where the judgment was obtained by fraud;
b. where the judgment is contrary to English public policy; and
c. where the proceedings were conducted in a manner which the Commercial Court regards as contrary to the principles of natural justice.
14. The Commercial Court will not re-examine the merits of a DIFC Court judgment. The judgment may not be challenged on the grounds that it contains an error of fact or law. A DIFC Court judgment will be enforced on the basis that the defendant has a legal obligation, recognised by the English court, to satisfy a judgment of the DIFC Courts.
26. In most cases, a party will be entitled to apply to obtain summary judgment without trial under Part 24 of the Civil Procedure Rules 1998 (as amended), unless the debtor can satisfy the Court that it has a real prospect of establishing at trial one of the grounds set out in paragraph 13 above. Applications for summary judgment are dealt with swiftly, without the need for oral evidence.”
36. Following Miliangos v George Frank (Textiles) Ltd  A.C. 443, a claim for enforcement of a foreign judgment may be made for the amount of the judgment in the currency in which it was rendered: Dicey § 14-029.”
(2) Summary judgment
“The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if -
(a) it considers that -
(i) that claimant has no real prospect of succeeding on the claim or issue; or
(ii) that defendant has no real prospect of successfully defending the claim or issue; and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial.”
i) the court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman  1 All ER 91;
ii) a "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel  EWCA Civ 472 § 8;
iii) in reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman;
iv) this does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel § 10;
v) however, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)  EWCA Civ 550;
vi) although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd  FSR 3;
vii) on the other hand, it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd  EWCA Civ 725; and
viii) a judge in appropriate cases should make use of the powers contained in Part 24. In doing so he or she gives effect to the overriding objective as contained in Part 1. It saves expense; it achieves expedition; it avoids the court's resources being used up on cases where this serves no purpose; and it is in the interests of justice. If the claimant has a case which is bound to fail, then it is in the claimant's interest to know as soon as possible that that is the position: Swain v Hillman  1 All ER 91 § 94.
(E) SUMMARY JUDGMENT: APPLICATION
i) Does Dr Shetty have a real prospect (in the sense outlined above) of successfully arguing that:
a) the DIFC Judgment is not final and conclusive;
b) the DIFC Judgment is not for a definite sum of money (other than a sum payable in respect of taxes or other charges of a like nature);
c) the DIFC Court was not a court of competent jurisdiction; or
d) the DIFC Judgment is impeachable on the basis that it is –
i) obtained by fraud,
ii) contrary to public policy, or
iii) contrary to the principles of natural justice?
ii) If not, is there any other compelling reason for a trial?
(1) Final and conclusive
(2) Definite sum of money
(3) Court of competent jurisdiction
"This case rests on the simple and universally admitted principle that a litigant who has voluntarily submitted himself to the jurisdiction of a court by appearing before it cannot afterwards dispute its jurisdiction. Where such a litigant, though a defendant rather than a claimant, appears and pleads to the merits without contesting the jurisdiction there is clearly a voluntary submission. The same is the case where he does indeed contest the jurisdiction but nevertheless proceeds further to plead to the merits, or agrees to a consent order dismissing the claims and crossclaims, or where he fails to appear in proceedings at first instance but appeals on the merits." (§ 14-069)
i) the parties to the Guarantee agreed to submit to the jurisdiction of the DIFC Court: see § 15 above; and
ii) Dr Shetty submitted to the jurisdiction of the DIFC Court by participating in the proceedings before it, including by defending on the merits Barclays’ application for Immediate Judgment.
i) there is a general principle that a decision by a foreign court that a judgment from the courts of that country was not obtained by fraud can create an estoppel in English proceedings to enforce that judgment: Owens Bank Ltd v Bracco  2 A.C. 443 (Court of Appeal) per Parker LJ at pp 470 and 472, commenting upon House of Spring Gardens Ltd v Waite  1 Q.B. 241; and
ii) it may also be an abuse of process of the English court to raise for a second time an argument which was raised and disposed of in the foreign court: House of Spring Gardens Ltd v Waite  1 Q.B. 241 per Stuart-Smith LJ at pp 254-255. In Owens Bank Ltd v Etoile Commerciale SA  1 WLR 44 a French court gave judgment in favour of Etoile on a bank guarantee, rejecting the bank’s allegation of fraud and forgery on the part of the plaintiff. A claim brought by the bank in St Vincent against Etoile for damages for fraud was struck out by the court. In subsequent proceedings in St. Vincent to enforce the French judgment, the Privy Council struck out, as an abuse of process, the bank’s attempt to plead fraud as a defence.
(b) Public policy
i) where a judgment is inconsistent with a previous decision of a competent English court in proceedings between the same parties or their privies, res judicata being capable of expression as a rule of public policy (Dicey § 14-156 citing Vervaeke v Smith  1 A.C. 145, 160G);
ii) where a judgment has been obtained in disobedience of an injunction not to proceed with the action in a foreign court, in circumstances of evidently discreditable behaviour on the part of the court concerned (Dicey § 14-156 citing AK Investment CJSC v Kyrgyz Mobil Tel Ltd  UKPC 7);
iii) where enforcement of a foreign judgment would be contrary to the European Convention on Human Rights (that being the effect of the Human Rights Act 1998). There is arguable authority in support of the proposition that where a foreign court (such as the DIFC Court) is not a party to the Convention, such shortcomings must be “flagrant” (Government of USA v Montgomery (No.2)  UKHL 37, discussed at Dicey § 14-160); and
iv) (possibly) where the foreign judgment is exemplary or punitive or for manifestly excessive damages (Dicey § 14-157).
(c) Natural justice
“In a celebrated passage in his judgment in Pemberton v Hughes (a case on the recognition of a foreign divorce decree), Lord Lindley observed: “If a judgment is pronounced by a foreign court over persons within its jurisdiction and in a matter with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice.” This passage refers to irregularity in the proceedings, for it is clear that a foreign judgment, which is manifestly wrong on the merits or has misapplied English law or foreign law, is not impeachable on that ground. Nor is it impeachable because the court admitted evidence which is inadmissible in England or did not admit evidence which is admissible in England or otherwise followed a practice different from English law. In Jacobson v Frachon Atkin L.J., after referring to the use of the expression “principles of natural justice,” said: “Those principles seem to me to involve this, first of all that the court being a court of competent jurisdiction, has given notice to the litigant that they are about to proceed to determine the rights between him and the other litigant; the other is that having given him that notice, it does afford him an opportunity of substantially presenting his case before the court.”
Adams v Cape Industries Plc appears to have been the first English case in which the defence of breach of natural justice was established in relation to a judgment in personam. The Court of Appeal held that the defence of breach of natural justice was not limited to the requirements of due notice of the hearing to a litigant and opportunity to put a case to the foreign court. It confirmed that the basic question was that stated in Pemberton v Hughes, namely whether there was a procedural defect which constituted a breach of the English court’s view of substantial justice, which would depend on the nature of the proceedings under consideration. The principle was applied in Masters v Leaver, where the Court of Appeal considered that a substantial failure to follow its own procedure for an assessment of damages meant that proceedings before a Texas court had led to a judgment in denial of substantial justice.
A mere procedural irregularity would not offend English concepts of substantial justice. In Adams v Cape Industries Plc the foreign judgment was for damages in default of appearance, and notice was given to the defendants of the application for a default judgment on an unliquidated claim. Under United States law (as under English law) the assessment of damages is effected (even in cases of default) by the court, but the United States judge did not hold any form of hearing, and the judgment was not based on an objective assessment by the judge of the evidence. The Court of Appeal did not decide that a lack of judicial assessment of damages is per se a breach of natural justice; but it is a breach where the foreign legal system contains provision for judicial assessment and the judgment debtor therefore has a reasonable expectation that there will be a judicial assessment.” (§§ 14-163 to 165, footnotes omitted)
(F) ANY OTHER COMPELLING REASON FOR A TRIAL
i) since the Guarantee is governed by English law, it is unclear why any such counterclaim could not have been pursued before the DIFC Court, rendering it an abuse of process to seek to litigate it now in response to an application for enforcement of the DIFC Judgment;
ii) deploying any such counterclaim by way of set-off would arguably be inconsistent with clause 6 of the Guarantee, which provides that
“All payments to be made by the Guarantor to Barclays under this Guarantee shall be made without set-off or counterclaim and without any deduction or withholding whatsoever. If the Guarantor is obliged by law to make any deduction or withholding from any such payment, the amount due from the Guarantor in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, Barclays receives a net amount equal to the amount Barclays would have received had no such deduction or withholding been required to be made.”
Counsel for Dr Shetty submitted that this provision would no longer be relevant, Barclays’ claim under the Guarantee having now merged in the DIFC Judgment. Even if that be the case, though, the presence of clause 6 in the Guarantee would in my view provide good reason to conclude that (in the context of a claim for equitable set-off) it would not be inequitable for Barclays to seek to enforce its judgment in full leaving Dr Shetty to pursue any counterclaim by separate action; and
iii) the point is any event hypothetical, since no such arguable specific breach that could found a damages claim has been identified: notwithstanding the fact that Dr Shetty has evidently received at least a degree of professional assistance not only in the DIFC proceedings themselves, but also in the formulation of his letter of 26 September 2021 (which in addition to the Principles did make reference to one specific FCA rule, namely BIPRU 14.3.3, albeit one for which any right to damages has been excluded), and to a degree subsequently. If Dr Shetty were later to ascertain that he might have a claim against Barclays whose pursuit would not amount to an abuse of process, then he may remain entitled to pursue it. The mere speculative possibility that such a claim might exist does not provide a reason, let alone a compelling reason, for this case to proceed to trial.