Yieldpoint Stable Value Fund, LP v Kimura Commodity Trade Finance Fund Ltd
| Jurisdiction | England & Wales |
| Judge | Stephen Houseman |
| Judgment Date | 20 June 2023 |
| Neutral Citation | [2023] EWHC 1512 (Comm) |
| Docket Number | Case No: CL-2022-000391 |
| Court | King's Bench Division (Commercial Court) |
[2023] EWHC 1512 (Comm)
Stephen Houseman KC
SITTING AS A JUDGE OF THE HIGH COURT
Case No: CL-2022-000391
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
SHORTER TRIALS SCHEME
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Fionn Pilbrow KC (instructed by Katten Muchin Rosenman UK LLP) for the Claimant
Nathan Searle & George Harnett of Hogan Lovells International LLP for the Defendant
Hearing date: 20 June 2023
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Stephen Houseman KC SITTING AS A JUDGE OF THE HIGH COURT
This judgment was handed down remotely at 1400 on 20 June 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Stephen Houseman KC:
This judgment deals with an issue which arose at the consequentials hearing in this action earlier today. It concerns an offer made by the Claimant (Yieldpoint) on 9 January 2023 pursuant to CPR Part 36 (“Part 36 Offer”).
The issue is whether the Part 36 Offer was a “ genuine attempt to settle the proceedings” against the Defendant (Kimura) within the meaning of CPR 36.17(5)(e). If not, this in turn may render it “ unjust” to award a successful claimant such as Yieldpoint any of the post-judgment enhancements set out in CPR 36.17(4)(a)-(d).
The consequentials hearing was listed pursuant to an Order made on 24 May 2023 following handing down of my Approved Judgment [2023] EWHC 1212 (Comm) two days earlier (“Trial Judgment”). The Trial Judgment dealt with all issues for final determination at a one day trial the previous week. Yieldpoint succeeded in its claim for repayment of US$5 million plus interest accrued as from 31 March 2022. Definitions are adopted from the Trial Judgment for convenience.
My post-judgment order made provision for the listing of this consequentials hearing with a 90 minute estimate to deal with issues of costs and interest so far as not agreed (which very little has been) in the meantime. It also extended time for Kimura to file an Appellant's Notice following my determination, contained in Form N460 sent on 26 May, refusing permission to appeal. No further directions were needed. PD57AB contains a default regime for detailed statements of costs to be filed by both parties following trial under the Shorter Trials Scheme.
Yieldpoint invoked the Part 36 Offer and served its statement of costs on Thursday 8 June. Further details as to work done and time spent on documents was provided on 14 June and additional post-trial costs were submitted the following day. Yieldpoint's trial costs totalled US$448,183 with a further US$72,065 now claimed in the post-trial phase.
Kimura's solicitors responded by letter on Friday 16 June. Amongst other things, and despite the fact that Yieldpoint had obtained a monetary judgment more favourable than the terms of the Part 36 Offer, they objected to the applicability of CPR 36.17(4) (a)-(d) in favour of Yieldpoint. Kimura contended that such enhancements would be “ unjust” in the present case, including because the Part 36 Offer was not a genuine attempt to settle the dispute.
Yieldpoint served witness evidence at 1501 yesterday, Mr Pilbrow KC having trailed it in his skeleton argument lodged at noon. This 29-paragraph witness statement was served without permission. Kimura objected to it by email. I ruled separately before the hearing this morning that it was inadmissible given the absence of permission and the late stage of its service. I concluded that I was unlikely to be assisted by witness evidence in a consequentials hearing conducted under PD57AB or when determining the specific dispute between the parties by reference to CPR 36.17(5).
I dealt with all issues arising at the consequentials hearing. I indicated, in light of citation of authority on the point, that I would produce a short judgment dealing with the status of the Part 36 Offer.
Turning then to the Part 36 Offer:
(i) Yieldpoint sought the sum of US$4,950,000 (defined as the “ Settlement Sum”) inclusive of interest. This represented 99% of the principal claim.
(ii) When accrued interest — calculated at the expiry of the 21 day acceptance period (30 January 2023) — is factored in, this proportion drops a few percentage points. Quite how far it drops depends on whether (and, if so, how) interest at the contractual rate in clause 11.5 of the MPA should be compounded. That was one of the disputed matters resolved — in favour of Kimura, as it happens — at the consequentials hearing. On this basis, the Part 36 Offer represented about 96% of the claim value as at 30 January 2023.
(iii) The Part 36 Offer stated as follows in the second paragraph:
“ Our client is confident that it has a strong case against your client, and is entitled to substantial damages, as set out in the Particulars of Claim.”
(iv) The fourth and final bullet point under the heading “ Terms of the Offer” stated:
“ The Settlement Sum is inclusive of interest”.
(v) No indication was given as to the amount of accrued interest at such date or the daily rate of accruing interest or whether/how interest was claimed to be compounded pursuant to clause 11.5 of the MPA.
The stated rationale for the Part 36 Offer was not entirely straightforward, in my judgment. The pleaded claim was for repayment of US$5m said to have become unconditionally due upon the Maturity Date, i.e. a debt claim. Damages were sought as an alternative in the usual way. However, the claim was ‘all or nothing’ as made clear in the Trial Judgment and discussed with counsel at trial: see transcript p.84 (lines 9–20); p.86 (lines 6–11). Yieldpoint's written opening submissions for trial acknowledged that the Court had to choose between two opposing positions. No issues of causation or quantum arose. No alternative claim was advanced for an amount below US$5m plus interest. Yieldpoint's approach was described as ‘US$5m or bust’.
The terms of the Part 36 Offer (“ entitled to substantial damages”) therefore give me some cause for concern: CPR 36.17(5)(a). It might also be said that Yieldpoint failed to provide sufficient information as to calculation of accrued interest at the relevant date: CPR 36.17(5)(c).
The real concern for me, however, is whether the Part 36 Offer was a genuine attempt to settle the claim given the starkly binary nature of this dispute and its far from obvious substantive prognosis in January 2023 or indeed at trial itself.
I am satisfied that the Part 36 Offer was not a genuine attempt to settle the proceedings when analysed in its proper context. On this basis, and in all the circumstances including those outlined in paragraphs 10–11 above and the fact that I summarily assessed Yieldpoint's trial costs at a figure representing 70% of the total claimed, I conclude that it would be “ unjust” to grant Yieldpoint any of the enhancements in CPR 36.17(4)(a)-(d).
CPR 36.17(5)(e) itself was inserted by rule amendment taking effect in April 2015, as explained in White Book 2023 at 36.17.6. This provision is not confined to so-called ‘100% offers’ made by claimants seeking to avail themselves of CPR 36.17(4) when they obtain a monetary judgment “ at least as advantageous” as their...
To continue reading
Request your trial
-
ABFA Commodities Trading Ltd (formerly VTB Commodities Trading DAC) (previously, VTB Capital Trading Ltd) v Petraco Oil Company SA
...attempt to settle. 21 Reflecting that discussion, in Yieldpoint Stable Value Fund LP v Kimura Commodity Trade Finance Fund Ltd [2023] EWHC 1512 (Comm), Mr Stephen Houseman KC considered a Part 36 offer to accept $4.95m inclusive of interest (96% of the claim) and held that this was not a g......
-
Mr Robert Colicci v Ms Nora Mikhailovna Grinberg as executrix of the estate of Ernesto Colicci deceased
...(argues Ms Welsh) because of the very high value of the claim. Yieldpoint Stable Value Fund v Kimura Commodity Trade Finance Fund [2023] EWHC 1512 (Comm), where the claimant had offered to settle for a “meaningless” discount of 1 per cent (see [24–25] — the offer also involved foregoing a ......
-
Part 36 Offers ' Tactical Weaponry Or Tool For Settlement?
...attempt to settle the proceedings. The recent case of Yieldpoint Stable Value Fund, LP v Kimura Commodity Trade Finance Fund Ltd[2023] EWHC 1512 (Comm), has put these considerations in the The Claimant sought payment of a debt in the sum of $5,000,000 plus interest. The Claimant made a Part......