Cargill International Trading Pte v Uttam Galva Steels Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bryan |
| Judgment Date | 28 February 2019 |
| Neutral Citation | [2019] EWHC 476 (Comm) |
| Docket Number | Case No: CL-2017-000499 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 28 February 2019 |
[2019] EWHC 476 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice
Rolls Building
Fetter Lane
London, EC4A 1NL
THE HONOURABLE Mr Justice Bryan
Case No: CL-2017-000499
Jackie McArthur (instructed by Freshfields Bruckhaus Deringer) for the Claimant
Karishma Vora (instructed by Marsans) for the Defendant
APPROVED JUDGMENT
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Hearing Date: 28 February 2019
THE HON Mr Justice Bryan
Introduction
An application is made by the Claimant Cargill today for summary judgment on its claim for default compensation under clause 8.12 of two Advance Payment and Steel Supply Agreements (“APSA I and II/the Agreements”) between Cargill and the Defendant Uttam, alternatively for pre-judgment interest at rates which are proposed and post-judgment interest at rates which are proposed.
In this regard Cargill's application for summary judgment against Uttam was successful before Teare J in an amount of US61,800,000 which represented a sum advanced by Cargill but not repaid and found to be due to Cargill in the circumstances and for the reasons set out in Mr Teare J's judgment dated 9 November 2018, as reported at 2018 [EWHC] 2977 (Comm) (the “November Judgment”).
At the handing-down hearing on 9 November 2018 the parties representatives were to address the issues of pre-judgment and post-judgment interest. At that hearing it became apparent that Uttam intended to raise issues that could not be dealt with in the time available and orders were made for a full day hearing on 28 February 2019, i.e. today.
In summary, Cargill submits that it is entitled under Clause 8.12 of the APSA Agreements to “default compensation” at a rate of 1 month LIBOR plus 12 %, which is the rate contractually agreed between the parties and which applies both pre-judgment and post-judgment.
In the alternative, Cargill seeks (a) pre-judgment interest at a rate proposed by it and (b) post-judgment interest at a rate proposed by it (the judgment being in US Dollars).
Uttam does not dispute that the Agreements make provision for Default Compensation as claimed in Clause 8.12. However it raises three points by way of alleged defence:
(1) It alleges that Clause 8.12 is unenforceable because it is a penalty.
(2) It alleges that Clause 8.12 is illegal at the place of performance as it is said not to be in compliance with the Reserve Bank of India (“RBI”')'s regulations and so invalid under Indian law, which it says is applicable pursuant to the principle in Ralli Bros v Compania Naviera Sota y Aznar [1920] 2 KB 287.
(3) It alleges that Clause 8.12 is an onerous term of the contract of which Uttam had insufficient notice, as a result of which Clause 8.12 was not validly incorporated into the APSA Agreements.
I should add that none of these alleged defences were pleaded in Uttam's Defence dated 5 June 2018, itself supported by a Statement of Truth, but they have subsequently been foreshadowed at and/or after the time of the November Judgment, culminating in a very late application to amend the Defence on 22 February 2019.
Cargill submits that Uttam's arguments have no realistic prospect of succeeding at trial and that there is no other compelling reason why the issue should be disposed of at trial, especially in circumstances where the main claim has already been decided in Cargill's favour.
At the hand down hearing Teare J directed that Uttam serve its skeleton argument for the present hearing first, no doubt because it was considered sensible that Uttam articulated the defences on which it wished to rely so that Cargill could respond to them as it saw fit; not least in circumstances where its Defence did not, at that time, set out the points that it had foreshadowed it would raise in opposition to the claim for Default Compensation. It was also envisaged that there should be witness statements addressing the issues arising. Accordingly, on 7 January 2019 a second witness statement of Garsharan Singh Sawhney, (“Sawhney 2”) were served on behalf of Uttam, followed on 28 January 2019 by a fifth witness statement of Thomas William Snelling (“Snelling 5”) on behalf of Cargill. Uttam then served its skeleton argument on 5 February 2019 which raised the alleged defences I have identified.
Cargill then served its skeleton argument on 15 February 2019 addressing such matters and pursuing the claim for summary judgment. However on 22 February 2019, so very shortly before this hearing, Uttam filed and served an application requesting permission for reply evidence to be admitted in the form of a third witness of Mr Sawhney of that date (“Sawhney 3”) and for permission to amend the Defence, first at paragraph 14 to state, in headline terms, the three alleged defences I have referred, but also at paragraphs 31 to 34 to plead at some length, and in some detail, why it says that the Default Compensation Rate Clause is unenforceable. Whilst Cargill does not object to Uttam putting in further evidence, it does object to the amendments to the Defence.
Uttam's defence can only be amended with either Cargill's consent or the permission of the court (see CPR17.1(2)). Cargill has not given its consent to Uttam's proposed amendments and opposes the grant of permission on the basis, it says, that to allow substantial amendments at this unduly late stage would cause Cargill undue prejudice. It is said that to allow the amendments would also be contrary to the overriding objective in that they would put the parties on an unequal footing with respect to be ability to respond to the other side's case (see CPR1.1(2)(a)) and they will increase Cargill's expenses of the hearing (see CPR1.1(2)(b)), which it is said is especially serious in light of the fact that Uttam remains in breach of the court's Order that Uttam pay the judgment sum awarded on 9 November 2018, and no payment has yet been made either in respect of that judgment sum or in respect of costs.
Amendment — Applicable principles .
CPR17.1(2) provides:
“If his Statement of Case has been served a party may amend it only –
(a) with the written consent of all the other parties; or
(b) with the permission of the court.”
The circumstances in which amendments may be put forward are infinitely variable and each contested application for permission to amend will require an exercise of the court's discretion which takes into account the particulars facts of the case at hand. In relation to the principles to be applied by the court when exercising its discretion in relation to amendments, Uttam refer to me the case of Daniel Alfredo Vilca v Xstrata Limited [2017] EWHC 2096 at [27] to [29] and [46] to [48].
For its part, Cargill refer me to what was said by the Court of Appeal in Swain Mason v Mills and Reeves LLP [2011] 1 WLR 2735 where Lloyd LJ at [69] to [70] quoted from a previous Court of Appeal decision in Worldwide Corporation Limited v GPT Limited [1998] CA Transcript No. 1835, noting that the other party would be “mucked around” by a late application to amend the pleading which was especially egregious: “[w]here a party has had many months to consider how he wants to put his case and where it is not by virtue of some new factor appearing from some disclosure only recently made”, stating:
“We accept that at the end of the day a balance has to be struck. The court is concerned with doing justice but justice to all litigants and thus where a last minute amendment is sought with the consequences indicated, the onus will be a heavy one on the amended party to show the strength of the new case and why justice both to him, his opponent and other litigants requires him to be able to pursue it.”
Uttam rightly accept that permission should only be given for an amendment, whatever its timing, if there is a real prospect of success, the same test as on summary judgment (see the Supreme Court Practice at [17.3.6]).
In the present case, there was a real danger that the hearing of full argument upon, and the determination of, the application to amend would have occupied a substantial part of the time available today which was fixed to hear and determine the summary judgment application and which would therefore in of itself necessitate a re-fixed summary judgment hearing, something that both Cargill and Uttam wished to avoid.
In such circumstances I considered that the best use of the available time was to hear the application for summary judgment, including arguments advanced by Uttam and on which it sought permission to amend, without ruling on the amended application on the basis that if this was an appropriate case for summary judgment then it would not be an appropriate case to allow the amendments, whereas if it was not an appropriate case for summary judgment then the objections to the amendments would in whole or part be likely to fall away given that the matters arising would then have been dealt with at trial.
This approach carried the risk that Cargill might find itself in a situation whereby it was unable to obtain summary judgment but might have been able to do so had there been an adjournment and time for it to put in further evidence and develop its submissions further. However, Cargill made clear to me orally at the start of the hearing that it did not wish an adjournment and it was content for me to proceed in the manner I have identified. Accordingly I considered that the only course that would ensure that today's summary judgment hearing was effective was if I heard argument on all...
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