Punjab National Bank (International) Ltd v Ravi Srinivasan
| Jurisdiction | England & Wales |
| Judge | Chief Master Marsh |
| Judgment Date | 24 January 2019 |
| Neutral Citation | [2019] EWHC 89 (Ch) |
| Docket Number | Case No: HC-2017-001895 |
| Court | Chancery Division |
| Date | 24 January 2019 |
[2019] EWHC 89 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building, Fetter Lane,
London EC4A 1NL
Chief Master Marsh
Case No: HC-2017-001895
Jacqueline A. Perry QC and Lee Schama (instructed by Cubism Law) for the Claimant
Nicholas Vineall QC and Brian Dye (instructed by Zaiwalla & Co) for the 1 st, 2 nd and 4 th to 9 th Defendants
Karishma Vora (instructed by Marsans Solicitors and Advocates) for the 3 rd Defendant
Hearing dates: 4, 5 and 25 October 2018
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.
The claimant is a bank based in London. The claim concerns loans made by the claimant between 29 March 2011 and 1 December 2014 totalling $45 million for oil re-refining and wind energy generating projects in the USA. There were eight loans which fall into three broad categories:
(1) SEPL Loans
Southeastern Petroleum LLC (“SEPL”) is based in South Carolina, USA. There were three loans to SEPL: $17 million was lent on 29 March 2011, $1.5 million on 14 October 2011 and $1.5 million on 25 June 2012. SEPL is not a party to this claim. The loan for $17 million was a syndicated loan advanced by Bank of Baroda which is described in the loan documentation as the Security Trustee.
(2) Pesco Loans
Pesco Beam Environmental Solutions Inc (“Pesco USA”) is based in Virginia, USA. There were two loans to Pesco USA: $10 million was lent on 2 April 2012 and $2 million on 1 December 2014. Pesco USA is the 5 th defendant.
Trishe Loans
(3) Trishe Wind Energy Inc (“Trishe Wind”) is based in Delaware, USA. There were two loans to Trishe Wind: $6 million was lent on 29 June 2012 and $4 million on 13 February 2013. Trishe Wind is in liquidation and is not a party to this claim.
Trishe Resources Inc (“Trishe Resources”) is also based in Delaware, USA. There was one loan to Trishe Resources for $3 million on 21 July 2014. Trishe Resources is the 2 nd defendant. Trishe Resources is said by the claimant to have adopted the liabilities of Trishe Wind although the basis for this assertion is not clear.
The loans are subject to various guarantees and alleged guarantees given by Pesco USA, Pesco Beam Environmental Solutions Pvt Limited (“Pesco India) (the 6 th defendant) and the 3 rd, 4 th, 7 th, 8 th and 9 th defendants. The guarantees are said to have been provided both in guarantee documents and documents described as letters of comfort. The 1 st defendant is not sued as a borrower or a guarantor. He has been joined as a party on the basis that he was according to the claimant “a shadow controlling figure” behind the overall borrowing and liable in deceit for fraudulent misrepresentations that are alleged to have been made to the claimant.
I append as annex 1 to this judgment a helpful spreadsheet provided by Mr Vineall QC and his junior Mr Dye which sets out a summary of the loans and which parties are said by the claimant to be liable as a guarantor. The picture is a complex one.
The spreadsheet also sets out the domicile of each of the borrowers and the defendants. All the individual defendants are domiciled in and resident in India with the exception of the 8 th defendant who is resident in and domiciled in the USA.
The relationship between the borrowers, the guarantors (I use this term to include those who accept they are guarantors and those who are alleged to be guarantors), the first defendant and other associated persons (corporate and real) is not easy to summarise. For the purposes of the hearing, Mr Vineall and his junior also provided a helpful diagrammatic summary of the principal parties showing how the individuals relate to each other and relate to the corporate entities. I append the summary as annex 2.
The claimant has issued proceedings in two other jurisdictions:
(1) A claim was issued on 22 March 2017 in South Carolina against the 4 th to 9 th defendants (“the US Claim”) three months before this claim was issued on 29 June 2017. In the US Claim Bank of Baroda and Punjab Bank (International) Limited are joint claimants.
(2) A claim was issued on 28 November 2017 in the Debt Recovery Tribunal in Chennai against the 2 nd, 3 rd and 4 th defendants (“the Chennai Claim”) in relation to the Trishe loans. The Chennai Claim was commenced 5 months after this claim was issued but before the claim form was amended on 15 January 2018 to join the first defendant and to re-state the claim.
In annex 2 the persons and entities who have been sued in South Carolina are identified by the use of italics; underlining marks those who have been sued in Chennai.
It is common ground that none of the defendants have any connection with England. However, the contracts were executed in England and the loans were negotiated here. The loan accounts are all held and operated in London. The claimant relies on these facts and the willingness of the borrowers and their directors to travel to London for the purposes of arranging the loans as part of its case on forum conveniens.
The Claim in outline
In its original form, when it was issued on 29 June 2017, eight defendants were joined as parties. When the claim form was amended on 15 January 2018, and Mr Ravi Srinivasan was joined as 1 st defendant, the existing defendants were re-ordered such that, for example, Trishe Resources which was the 8 th defendant became the 2 nd defendant, Mr Shankar Anantharaman (“Mr Shankar”) who was the first defendant became the 7 th defendant, and so on. The reasons that lie behind this reshuffling of the existing parties are obscure. It was certainly very unhelpful with regard to the future conduct of the claim.
The endorsement on the claim form issued in June 2017 provided the following brief details of the claim:
“Fraudulent misrepresentation by the defendants in respect of a numerous loans, further and/or alternatively, against the guarantors of the loans for enforcement of several guarantees and loan agreements. [sic] The claim is also brought for breach of contract.”
The amended claim form sealed on 15 January 2018, in addition to joining Mr Srinivasan as the first defendant, re-stated the brief details of claim as follows:
“Between 2011 and 2014 the claimant made a series of loans for the purpose of financing to projects. The said loans were drawn down in their entirety, and have now fallen due and are owing. The principals alone total US $ 36 million. [sic]
Each of the defendants named was one or more of (i) a borrower, (ii) owner of a borrower, (iii) controlling mind of a borrower and/or their owner, (iv) guarantor and/or provider of an indemnity, (v) controlling mind of a guarantor and/or provider of an indemnity, (vi) maker and/or procurer of a false and/or fraudulent misrepresentation that induced one or more of the said loans and/or (vii) constructive trustee of, unjustly enriched by and/or knowing receiver of the money lent under one or more of the said loans.
The claimant accordingly brings causes of action against each and all of them in, inter-alia, (i) breach of contract, (ii) misrepresentation, and (iii) deceit.”
It will be necessary to set out the chronology of the claim in some detail. At this stage it suffices to record that there are two orders that are relevant both made without notice to the defendants:
(1) An order dated 13 September 2017 made by me under which the claimant was given permission to serve the claim form and the particulars of claim out of the jurisdiction and permission to serve the claim form by email.
(2) An order dated 9 th February 2018 made by Deputy Master Bartlett giving permission to serve the claim form and the particulars of claim on the newly joined first defendant (Mr Srinivasan) out of the jurisdiction by email. In addition, the order extended time for service of the claim form and particulars of claim until 12 February 2018. Both the claim form and the particulars of claim were amended between the dates of these two orders although the fact of amendment is not mentioned in the Deputy Master's order.
Both orders provided that the claim form and particulars of claim were to be deemed served on the second business day after the sending of the email pursuant to CPR rule 6.14 and 7.5 (1).
The Applications
There are two applications both dated 25 April 2018 seeking substantially similar relief. The defendants say that the orders dated 13 September 2017 and 9 February 2018 should be set aside both as to the grant of permission to serve out of jurisdiction and service by alternative means by email. In addition, the parties apply to set aside the order extending the validity of the writ pursuant to the order of Deputy Master Bartlett. If the defendants are successful on their applications, the claimant will be unable to pursue this claim against them.
The 1 st and 2 nd and 4 th to 9 th defendants are represented by Zaiwalla & Co (“the Zaiwalla defendants”). Their application is principally based on the following contentions:
Ground 1: The claimant has not made out an arguable case in deceit against the defendants.
Ground 2: The claimant is not able to show that England is the most appropriate forum.
Ground 3: If Grounds 1 and 2 are assumed in favour of the claimant, the orders giving permission to serve out of the jurisdiction should be set aside for material non-disclosure, namely the failure to inform the court of the US Claim at...
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