Ripple Markets Apac Pte. Ltd v P Dot Money Ltd (formerly k.a. Taasai FS Ltd)
| Jurisdiction | England & Wales |
| Judge | Christopher Hancock |
| Judgment Date | 30 January 2024 |
| Neutral Citation | [2024] EWHC 156 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2023-000411 |
[2024] EWHC 156 (Comm)
Christopher Hancock KC
Case No: CL-2023-000411
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Nehali Shah (instructed by Paul Hastings (Europe) LLP) for the Claimant
Nik Yeo (instructed by Russell-Cooke LLP) for the Defendants
Hearing dates: 8 December 2023
Judgment Approved by the court for handing down (subject to editorial corrections)
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 12:00 on Tuesday 30 th January 2024
Introduction and background.
This hearing was listed to deal with the Defendants' application for a stay of execution (the Stay Application) of default judgments dated 14 August 2023 (the Default Judgments), pending the determination of the Defendants' application dated 20 October 2023 to set aside the Default Judgments (the Set Aside Application). That latter application has been listed for 13 March 2024, a date fixed for the convenience of the Court and the Claimant's counsel. I refer herein to the Claimant as C and the Defendants as Taasai (or D1) and D2 respectively.
C's claim in these proceedings was for US$12,780,530.35 plus fees and interest due pursuant to an agreement between it and Taasai entitled “Master XRP Commitment to Sell Agreement” with an effective date of 15 August 2022 (the CTSA). Under the CTSA, C made available for purchase by Taasai the digital asset XRP for the sole purpose of completing a payment transaction over C's hosted service called “On-Demand Liquidity”. C claims that Taasai took the XRP made available to it under the contract, but failed to pay the sums due pursuant to invoices dated 13, 20 and 27 March 2023 (the Unpaid Invoices).
Payment was chased for the Unpaid Invoices, including in emails dated 16, 22 and 29 March 2023. Although Taasai made partial payment of the amount owing under the first invoice, it has failed to pay the balance of that invoice or the other invoices (although Taasai continues to make weekly payments of approximately $50,000).
C commenced proceedings on 24 July 2023. It is accepted that the pre-action protocol was not complied with, but C contended that there could be no doubt but that Taasai knew that proceedings were in the offing against it since they were sent several emails before issuance threatening such. I accept that this was the case.
The proceedings were sent the following day by way of service to the Defendants at the registered addresses listed for them at Companies House as at 24 July 2023. There is no dispute but that this constituted valid service, pursuant to s.87(2) and s.1140(5) of the Companies Act 2006, the deemed date of service being 27 July 2023.
The 14-day period required for filing an acknowledgment of service, defence or admission elapsed on 11 August 2023, and accordingly C filed a request for judgment on 14 August 2023. Given the absence of any acknowledgment of service or Defence from the Defendants, C obtained the Default Judgments on 14 August 2023.
C discovered the original default judgments when checking the CE File on 30 August 2023, but upon checking them discovered clerical errors. The change in the Defendants' registered addresses on 25 July 2023 (which I refer to below) (after the Claim Form and Points of Claim were filed) had also by then come to its attention.
Accordingly, on 2 September 2023, Paul Hastings (Europe) LLP, for C, sent a letter to the Court requesting the correction of the clerical errors in the original default judgments pursuant to CPR 40.12 (the slip rule) and updating the Defendants' addresses to the new address (4638 Spaces, Hanover Avenue, Feltham, TW13 4JP). C located the corrected Default Judgments on 20 September 2023 on CE File.
In the meantime, on 18 September 2023 (following a previous email on 9 August 2023), Ms Walsh emailed C asking for a summary of payments by Taasai and a current statement of the outstanding balance. On 3 October 2023, following that email from Ms Rachael Walsh (who had been introduced to Ripple by Taasai as Taasai's in-house counsel), Mr Raeburn of Paul Hastings sent Ms Walsh a copy of a letter of the same date serving the Default Judgments on the Defendants at the new address, specifying the amounts still owed, and recording the payments made by Taasai to C. The same documents were also sent on the same date to the two Defendants at their new address.
However, as I have noted above, the Defendants had changed their registered business addresses on 25 July 2023. The Default Judgments were sent to the Defendants at the new address (and by email) on 3 October 2023, as I have also noted. The Defendants say they did not know about the proceedings until this time.
Following service of the Default Judgments, on 6 October 2023, Russell-Cooke LLP sent a letter to Paul Hastings stating that they had been instructed by the Defendants who “ intend to robustly defend the Proceedings”, and alleging that the Defendants only became aware of them on 3 October 2023. Russell-Cooke stated that the Defendants intended to apply to set aside the Default Judgments and sought C's confirmation that they would not pursue an enforcement application until after the prospective set aside application had been determined.
The Defendants then, on 11 October 2023, made the Stay Application, followed by the Set Aside Application on 20 October 2023.
Further correspondence followed in which, in particular:
(1) C asked the Defendants various questions as to the reasons for the change of registered address noted above, and as to a change of name on the part of Taasai, requests which were made in Paul Hastings' letters dated 9, 18, 25 and 26 October and 2 November 2023. The Defendants stated that the change of name was due to a branding decision, which had been made months before; and that the change of registered address was due to disputes with the landlord.
(2) C offered not to take steps to enforce the Default Judgments if the Defendants agreed not to seek to set them aside and to have a meeting (including in Paul Hastings' 9 October letter). That offer was not accepted and there was in the event no such meeting.
(3) Paul Hastings stated in a letter dated 25 October 2023 to Russell-Cooke that C would agree to a stay if the Defendants paid 50% of the judgment sum into Court, which the Defendants have not agreed to do.
As noted above, the Stay Application was made on 11 October 2023, and the Set Aside Application on 20 October 2023. C's evidence in response to the Set Aside Application is due to be filed on 2 February 2024 and the Set Aside Application has been listed to be heard on 13 March 2024. In that application, the following bases are put forward:
(1) Taasai's case is that the ODL Facility provides a revolving working capital facility to Taasai, in a sum of US$10m, revolving every 7 days. More particularly, it was submitted that prior to the contractual relationship between the parties, C offered the ODL Facility to Taasai to “[i] mprove your working capital position and invest in growing your business”.
(2) It was submitted that in an email on 11 April 2023, a number of months after the ODL Facility started operating, C acknowledged that the ODL Facility “ has … been sold … as a working capital solution (revolving 7–8 days credit line)”. It was submitted that in that same email, C acknowledged the practical consequences of this: “ Fall out over the last couple of weeks has identified that if we [C] pause ODL, customers like Tier Money [Taasai], do not have the cash to pay us back as per the payment terms [ie the terms of the individual invoices issues under the agreement] because it is being used [and has been “ sold”, as previously acknowledged] as a working capital solution”
(3) It was submitted that 11 April 2023 email made clear that the ODL Facility had also been sold to, and used by, other customers of C as a revolving working capital facility, just as Taasai had always understood the ODL Facility was to function. It was submitted that hile any drawdown had to be repaid at the end of 7 days, a further drawdown was to be available to repay that, to the extent that cash from other sources within the business were not available. As such, it is Taasai's case that C could not simply “turn off the taps” and sue for the three invoices on the basis that they were due on 13, 20 and 27 March 2023, respectively. That would effectively make the revolving working capital facility repayable immediately at will. Taasai's case is that, since the ODL Facility was intended to be a revolving facility used for working capital, it cannot have been intended to be repayable on such cliff-edge terms, and their case is that the 11 April 2023 email from C acknowledges this. This therefore gives rise to an implied term, or a claim for rectification of the underlying written agreement, to the effect that C could not simply decide to cease providing drawdowns under the ODL Facility as it did in March 2023. If so, then Taasai has a counterclaim against C for C failing to make further funds available under the ODL Facility to enable payment of the three invoices in question. Alternatively, an estoppel by convention arises to the same effect as that implied term.
(4) The issue for the Set Aside/SO Application will not be whether Taasai owes C anything at all, or will owe C anything in the future. That is because the Default Judgments were simply based on the allegations in the Particulars of Claim that three particular...
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