Amns Middle East Fze v Liqs Pte Ltd

Hearing dates: 12–13 November 2024

Approved Judgment

This judgment was handed down remotely at 10.30am on [date] by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Sean O'Sullivan KC (sitting as a Deputy High Court Judge):

This is a strange case in a number of respects. It concerns a claim by AMNS Middle East FZE (“C”) for repayment of US$52,803,513.90, on grounds of unjust enrichment. C contends that (a) it paid this money to or for the benefit of LIQS Pte Ltd. (“D”) in anticipation of and/or pursuant to a “Contract for Purchase of Steel Products”, which envisaged steel or services being provided to C by D, but (b) it never actually received any steel or services.

The background to these payments is controversial and, even on C's own case, somewhat shadowy and mysterious. A puzzling transaction is rendered opaque by the fact that C itself has only limited information about what happened back in 2014–2016, having been subject to a corporate restructuring since those events. The mysteries have deepened further as a result of D's decision to stop participating in the current proceedings.

I will deal first with D's non-attendance at the trial and the procedural consequences of that non-attendance, before turning to the substantive issues.

Non attendance

Chronology

The claim was commenced in March 2021.

D was initially represented by leading counsel and Clyde & Co, and participated fully in the proceedings until August 2024, filing a Defence and Counterclaim settled by specialist leading counsel (and indeed an Amended Defence and Counterclaim) and 4 witness statements.

I understand that the trial was fixed for the availability of D's Counsel in the usual way. D's PMIS (filed on 30 July 2024 and revised on 6 August 2024) indicated that D would be ready for the trial in November 2024, with Clyde & Co acting as D's solicitors.

However, on 12 August 2024, C was served with an order of Mrs Justice Dias, permitting Clyde & Co to cease acting as D's solicitors, and providing an alternative email address for serving D.

On 4 October 2024, on the date of the PTR, a Mr Howard (said to be “ Legal Counsel For and on behalf of [D]”) wrote to the Court, stating: “ [D] will take no further part in these proceedings and nor will they be represented in the High Court trial currently due to commence on 12 November 2024 or at the hearing on 4 October 2024”.

At the PTR, because of uncertainty as to Mr Howard's authority to communicate on behalf of D, I ordered that D should provide a letter signed by Mr Sanjeev Gupta, confirming its position. That was on the basis that Mr Gupta was known to be a director, and the principal, of D.

On 9 October 2024, Mr Howard sent C's solicitors a letter from Mr Gupta, stating that “ [D] will no longer be able to take part in nor will it be represented at the above captioned proceedings (the Proceedings), as it cannot afford continued appropriate legal representation”. It might be noted that the letter added that D “ is able and more than willing to put forward its witnesses to be cross examined by [C]”.

I made some further orders at a hearing on 23 October 2024 which was not attended by D. These included orders for disclosure, in particular requiring D to search for and disclose “ ledgers, management accounts, annual financial statements and audit reports… prepared between 2014 and 2019 (inclusive)”, “ Any other documents which refer to (i) the Balance Confirmation provided to the Claimant by the Defendant on 25 April 2017; or (ii) the sum referred to in the Balance Confirmation provided to the Claimant by the Defendant on 25 April 2017” and “ copies of its annual financial statements and audit reports that were prepared or reviewed by the Defendant's accountants or auditors between 2014 and 2019”.

To assist D's understanding of the potential consequences of ignoring those orders, I made express reference to the possibility that, if disclosure was not given as ordered, the Court might draw inferences: “ For the avoidance of doubt and without prejudice to the Court's general powers of case management, if the Court finds that the Defendant has not complied, without satisfactory explanation, with any part of paragraphs 5 to 9 of this order, the Court may draw such inferences as it considers to be appropriate, which may include inferences against the Defendant's case”.

There has not been any response at all from D to that order for disclosure.

I made an order for payment of the costs of the application for disclosure, which I summarily assessed in the sum of £12,000. These costs have not been paid.

In the light of the comments which had been made about the cross-examination of witnesses, I included a recital to the Order as follows: “ AND UPON the Court indicating that a witness, in respect of whom a witness statement has been filed and served, will only be permitted to give oral evidence at the trial where that witness has been called by a party who attends the trial through an appropriate representative in accordance with the Civil Procedure Rules”.

Nothing further has been heard from D following on from that hearing on 23 October 2024. I was shown the covering messages by which the bundles and C's skeleton for this trial were sent to D at the email address provided by Clyde & Co. All of those communications have simply been ignored by D.

I am in no doubt that D was fully aware of the trial date and made a deliberate decision not to attend or be represented. Indeed, Mr Gupta, for D, made clear that that was what D had decided in his letter of 9 October 2024. It was said that the decision was made for financial reasons, but that assertion is not explained. If it matters, I do not accept, in the absence of any evidence, that D is unable to attend for financial reasons. Until August 2024, D was able to pay a top international law firm and leading counsel to act for it. I would need a proper explanation as to what has changed to mean that it cannot now afford to be represented at Court in any form.

Proceeding in the absence of D

CPR 39.3(1) provides:

(1) The court may proceed with a trial in the absence of a party but –

(a) if no party attends the trial, it may strike out the whole of the proceedings;

(b) if the claimant does not attend, it may strike out his claim and any defence to counterclaim; and

(c) if a defendant does not attend, it may strike out his defence or counterclaim (or both).

It is clear that I have a discretion to proceed with the trial in the absence of D. In “ Williams v Hinton [2012] C.P Rep 3 (2011)”, Gross LJ emphasised (at [40]) the competing policy considerations: “ It is of course of the first importance that a party is afforded a fair opportunity to present its case to the judge. It is also, however, of great importance that judges, as a matter of case management, act robustly to bring cases to a conclusion…”.

The key to Gross LJ's conclusion that the trial judge in that case had been entitled to proceed in the absence of the appellants was that it was clear that they knew the trial had been listed and was going ahead. Hence (at [42]):

“Pulling the threads together, on the facts of the case, the Judge was entitled to conclude that the Appellants were aware of the hearing on the 29th June and had chosen, without any or proper explanation, not to attend. In such circumstances, I find it impossible to say that the course taken by the Judge was not properly open to him; neither the requirements of natural justice at common law nor Art. 6.1, ECHR, precluded him from doing so. Were it otherwise, a recalcitrant litigant could stymie proceedings”.

I do not consider the present to amount to a borderline case. As I have said, I am in no doubt that D was fully aware of the trial date and made a deliberate decision not to attend or be represented. D has not made any request for an adjournment. On the contrary, I understand D to have accepted that the trial would go ahead in its absence; hence its comments about its witnesses. I would hope that any misunderstanding on D's part about what would happen in relation to its witnesses was corrected by my Order at the hearing 23 October 2024. But the bottom line is that D was not offering any alternative to the trial taking place in its absence. There was no suggestion that D might attend if given different notice, or more time. In such circumstances, it is obvious that the Court is very likely to exercise its discretion to proceed under CPR 39.3. I made clear at the outset of the trial that I was doing so.

Application to strike out

CPR 39.3(1) also makes clear that I can, purely on the basis of non-attendance, strike out the defence or counterclaim. The rule does not make clear what the effect of doing so would be.

C applied for an order striking out the Amended Defence and Counterclaim, arguing that the effect of doing so would be that judgment could be entered in default of a defence and there would be no need for a trial. It is far from clear to me that that is what CPR 39.3(1) envisages.

The current version of the White Book states (at paragraph 39.3.5) as follows: “ The Practice Direction, para.2.2 (see para.39APD.1) envisages that even though a defence may be struck out, the claimant will still have to prove their claim, although this will...