Punjab National Bank (International) Ltd v Vishal Cruises (Private) Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Cockerill |
| Judgment Date | 23 June 2020 |
| Neutral Citation | [2020] EWHC 1962 (Comm) |
| Date | 23 June 2020 |
| Docket Number | Nos. CL-2017-000569 & CL-2017-000595 |
| Court | Queen's Bench Division (Commercial Court) |
[2020] EWHC 1962 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURT OF ENGLAND & WALES
COMMERCIAL COURT (QBD)
Rolls Building
Fetter Lane
London, EC4A 1NL
Mrs Justice Cockerill
Nos. CL-2017-000569 & CL-2017-000595
Mr T. De Vecchi (instructed by TLT LLP) appeared on behalf of the Claimant.
Ms K. Vora (instructed by CMS Cameron McKenna Nabarro Olswang LLP) appeared on behalf of the Second and Third Defendants in CL-2017-000569 and the Second Defendant in CL-2017-000595.
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Introduction and Summary
The Claimant (“the Bank”) is a bank incorporated in England and Wales. In 2012 and 2013 it lent money (to the First Defendant in the Vishal Claim (“Vishal”) and to the First Defendant in the Passat Claim (“Passat”)) in relation to the purchase and charter of a single vessel – the MV Delphin. Vishal was the purchaser of the vessel, and Passat was intended to be the charterer of the vessel from Vishal. Much of that lending remains unpaid and these actions are the result.
I have heard over the last two days applications made by the Second and Third Defendants in CL-2017-000569 (“the Vishal Claim”) and the Second Defendant in CL-2017-000595 (“the Passat Claim”, together with the Vishal Claim, “the Claims”) (together, “the Applicants”) (respectively) to set aside various orders of the Court concerning service out of the jurisdiction and/or challenge the jurisdiction of this Court and (in the Vishal Claim) seek an anti-suit injunction (together, “the Applications”).
However, it is not these Defendants who are the active Defendants in these applications — or indeed in the actions generally;
i. On 12 October 2018, at a (defended) hearing before Mr Justice Butcher, the Bank obtained summary judgment against Vishal in the Vishal Claim. Judgment was entered in favour of the Bank in the sum of €16,368,919.33. So far, Vishal has failed to satisfy that judgment.
ii. Passat has not responded to the Bank's demands for repayment. On 16 November 2014, an insolvency administrator was appointed over Passat's assets by the District Court of Hamburg, Germany. Passat has not been served.
The claims are now actively pursued against the Applicants and are claims under a number of guarantees entered into by the Applicants in support of lending by the Bank under English law governed facilities. The Applicants do not dispute executing the relevant guarantees.
The Second Defendant in both Claims is a man named Pradeep Agrawal (“Mr Agrawal”), who is a businessman domiciled in India. He provided guarantees in relation to the lending extended by the Bank to both Vishal and Passat.
The Third Defendant in the Vishal Claim is Superior Industries Limited (“SIL”), which is a private company incorporated under the laws of India, and is associated with Mr Agrawal. It provided a guarantee in relation to the lending extended by the Bank to Vishal.
The Third Defendant in the Passat Claim is Yogesh Gupta (“Mr Gupta”), an individual resident in India, who also provided a guarantee in relation to the lending extended to Passat. He was served on 5 January 2018, and has not challenged jurisdiction or filed any defence.
The Fourth Defendant in the Passat Claim is Vishal, who provided a corporate guarantee in relation to the lending extended to Passat. Vishal was served on 16 November 2017, and has not challenged jurisdiction or filed any defence.
The applications pursued are fully summarised (and only properly comprehensible) at the end of the full factual background section of this judgment. In essence however, they comprise:
i. Applications to set aside the orders for service out on the basis of failure to give full and frank disclosure, in particular in relation to the existence of proceedings elsewhere;
ii. Applications to set aside the orders for service out on the basis that there was no jurisdiction to make them;
iii. Applications to set aside the orders for alternative service on the merits and on the basis of failure to make full and frank disclosure as to the relevant legal test.
The Claimant contends that each of these applications is misconceived; alternatively that if there was any failure to make full and frank disclosure, the correct course on the facts of this case is not to set aside the orders.
Factual Background
Between 2012 and 2013, the Bank provided the First Defendant in the Vishal Claim (“Vishal”) (who is also the Fourth Defendant in the Passat Claim) with two facilities, the first for €10,000,000 and the second for €2,000,000 (“the First Vishal Facility” and “the Second Vishal Facility” respectively and, together, “the Vishal Facilities”). The Vishal Claim relates to sums outstanding under both Vishal Facilities.
The First Vishal Facility is expressly governed by English law and gives the English courts jurisdiction to settle any dispute arising out of or in connection with its subject matter.
The Second Vishal Facility is expressly governed by English law and gives the English courts jurisdiction (albeit non-exclusive) to settle any dispute arising out of or in connection with its subject matter.
In the circumstances, the Applicants (unsurprisingly) do not dispute that the Bank was entitled to serve the Vishal Claim on Vishal in Mauritius without the Court's permission.
In 2014, the Bank provided the First Defendant in the Passat Claim (“Passat”) with an overdraft facility of up to €2,500,000 (“the Passat Facility”). The Passat Claim relates to sums outstanding under the Passat Facility.
The Passat Facility is expressly governed by English law and gives the courts of England exclusive jurisdiction to settle any dispute arising out of or in connection with its subject matter. Therefore, as with Vishal, there was no need for the Bank to obtain the Court's permission to serve Passat in Germany. Passat has not been served.
Vishal's obligations to the Bank were supported by guarantees and/or indemnities provided by Mr Agrawal and SIL. These underlie the Vishal Claim.
Passat's obligations to the Bank were supported by guarantees and/or indemnities provided by Mr Agrawal, Mr Gupta and Vishal (“the Passat Guarantees”). These underlie the Passat Claim.
The Vishal Guarantees
In the Vishal Claim, the Bank relies on the following guarantees and/or indemnities (the terms of which are paraphrased):
i. In connection with the First Vishal Facility:
a) An agreement dated 4 May 2012 according to which Mr Agrawal agreed to guarantee and/or indemnify all of Vishal's liabilities to the Bank as a primary debtor up to a maximum of €10,000,000 (“the First Agrawal Guarantee”). Clause 18 (b) of that agreement states: “ The Guarantor irrevocably submits to the non-exclusive jurisdiction of the High Court of Justice in England but this Guarantee may be enforced in any court of competent jurisdiction.”
b) An agreement dated 4 May 2012 according to which SIL agreed to provide a guarantee and/or indemnity to the Bank in materially identical terms to the First Agrawal Guarantee (“the First SIL Guarantee”). Clause 19 (of that agreement states: “ The Guarantor irrevocably submits to the non-exclusive jurisdiction of the High Court of Justice in England but this Guarantee may be enforced in any court of competent jurisdiction.”
c) The Applicants (rightly) accept that the Bank was entitled to serve its claims under the First Vishal Guarantees in India, although the point is made that service must still be validly effected. In terms of value, the claims under the First Vishal Guarantees amount to more than 80% of the total sum claimed by the Bank in the Vishal Claim.
ii. In connection with the second Vishal Facility:
a) An agreement dated 28 January 2013 according to which Mr Agrawal agreed to provide a guarantee in respect of Vishal's liabilities under the Second Facility as well as any further losses and damages (“the Second Agrawal Guarantee”).
b) An agreement dated 28 January 2013 according to which SIL agreed to provide a guarantee to the Bank in materially identical terms to the Second Agrawal Guarantee (“the Second SIL Guarantee”).
c) The Second Agrawal Guarantee in Vishal and Second SIL Guarantee do not have express governing law or jurisdiction clauses. Both guarantees however refer to provisions of the [Indian] Contract Act, 1872. For example, clause 4 “ ….The Guarantor(s) agree(s)…they are debtors jointly…and accordingly he/she/they shall not as such be entitled to claim the benefit of legal consequences of any variation in terms of the contract and to any of the rights conferred on a Guarantor by Sections 133,134,135,139 and 141 of the Indian...
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