Korea National Insurance Corporation v Allianz Global Corporate & Speciality AG

On a summary-judgment application, a respondent must provide sufficient evidence to show a real prospect of success. A bare assertion that further evidence may emerge at trial is insufficient, particularly where the evidence is or should be within that party’s possession. The court should accept evidence at face value and avoid resolving factual disputes, but may rigorously assess what the evidence establishes.

A statement of truth made on behalf of a party verifies only the facts in the document. It is not a witness statement by its signatory and does not verify legal conclusions. Whether negotiations created a binding compromise is assessed objectively from the words used and their context.

The claimant, KNIC, sought in England to enforce a Korean judgment obtained against Allianz and its co-reinsurers under an aircraft liability reinsurance policy. Allianz alleged that, before the Korean proceedings, the parties had made a binding compromise under which the claim would be settled in North Korean won.

David Steel J gave KNIC summary judgment under CPR Part 24 and struck out that part of Allianz’s defence and counterclaim. Allianz appealed, contending that the pleaded facts and the statement of truth gave it a real prospect of proving both the compromise and fraud in obtaining the Korean judgment.

1. Appeal dismissed. The reinsurers had no real prospect of establishing that the 23 December 2005 meeting produced a legally binding compromise, or that KNIC fraudulently obtained the Korean judgment by enforcing rights it knew had been discharged.

2. The question whether a binding agreement was made was objective. The alleged exchanges, viewed in their context, did not strongly indicate a compromise. No terms were alleged as to the time for payment, and no written record was made despite the size and importance of the currency issue.

3. The subsequent correspondence was incompatible with a binding settlement. It described a non-binding arrangement which might lead to settlement if the reinsurers obtained the required currency, and continued to reserve the reinsurers’ position.

4. On a CPR Part 24 application, the court does not decide factual disputes. But a party relying on prospective further evidence must identify its nature, source and relevance. Allianz provided no witness evidence from those who attended the meeting and no sufficient explanation of what further evidence could emerge at trial.

5. Under CPR 22.1(4), the statement of truth signed by Mr Payton on Allianz’s behalf verified the party’s belief in the pleaded facts. It was neither Mr Payton’s personal evidence nor verification of the legal conclusion that a binding agreement existed.

6. In any event, fraud required proof that KNIC knew its rights had been discharged. The correspondence made that case hopeless. Lords Justice Jacob and Buxton agreed with Lord Justice Moore-Bick.

• Court of Appeal (Civil Division): Appeal dismissed. The court upheld David Steel J’s order of 24 July 2007 granting KNIC summary judgment under CPR Part 24 and striking out the relevant parts of Allianz’s defence and counterclaim.
• High Court of Justice, Queen’s Bench Division, Commercial Court: David Steel J gave judgment for KNIC on the relevant issues under CPR Part 24 and struck out the defence and counterclaim alleging fraud through an earlier compromise. No citation for that order was stated.