Montenegrobanka AD Podgorica v Bishopscourt (BB&Co) Limited (in liquidation)

On a summary judgment application involving foreign law, a claimant may plead and verify its case on the basis that the foreign law has the same effect as English law. If the defendant contends that foreign law produces a different result, the defendant must provide supporting evidence. The court may assess the quality and logic of that evidence and need not accept an expert opinion merely because the expert is qualified.

Where an indemnity between banks uses plain English banking language, a bare assertion that the words have a different meaning under foreign law may be insufficient to establish a real prospect of defending the claim. A proposed trial to investigate possible fraud is not ordinarily a compelling reason for refusing summary judgment.

The claimant sought to enforce an indemnity arising from a guarantee issued in connection with an oil spill and a judgment obtained in Yugoslavia. The High Court, Queen’s Bench Division, Commercial Court, granted summary judgment against the defendant on 8 August 2002.

The defendant argued that, under Yugoslav law, the underlying judgment was not final and that the claimant’s certification under the indemnity was therefore invalid. It also argued that the circumstances surrounding service, the judgment and payment gave a compelling reason for a trial. The Court of Appeal considered whether those arguments disclosed a real prospect of a successful defence or another compelling reason to proceed to trial.

1. Permission to appeal refused. The court upheld the judge’s conclusion that the defendant had not shown a real prospect of successfully defending the claim and had not demonstrated any compelling reason for a trial.
2. Although Yugoslav law was accepted for the purposes of the application as the proper law of the indemnity, the claimant was not required to establish affirmatively that Yugoslav law produced the same result as English law. It was entitled to plead and verify its case on that basis. The burden lay on the defendant, asserting a different result under foreign law, to adduce evidence supporting that contention.
3. The judge was entitled to test the defendant’s expert evidence rather than accept it merely on the expert’s say-so. The opinion principally addressed whether the Yugoslav judgment was final, but its conclusion that the certification was invalid did not follow logically from that premise. The evidence did not explain how the English words used in the banking documents should be construed under Yugoslav law.
4. The context was material. The documents were between bankers, included an English bank, used English words and contained a certification requirement and an undertaking to reimburse without contestation. It would require powerful evidence to show that those words had a different effect in Yugoslavia from their natural effect in England or elsewhere.
5. The surrounding circumstances did not create a compelling reason for trial. The judgment’s authenticity was not challenged, no appeal had been brought against it, payment had been made, and there was expert evidence supporting its finality. A proposed opportunity to use discovery to investigate whether a fraud allegation might be made was not an attractive basis for ordering a trial. The court stressed the importance of resolving indemnity and guarantee claims on a Part 24 application where appropriate.

• Court of Appeal (Civil Division) [2002] EWCA Civ 1468: permission to appeal was refused.
• High Court, Queen’s Bench Division, Commercial Court: Morison J gave summary judgment against the defendant on 8 August 2002.