Standard Bank Plc v Agrinvest International Inc

Under CPR 13.3, a real prospect of successfully defending a claim does not by itself justify setting aside a regular default judgment. Promptness is a very important factor because litigation has a strong public interest in finality. A delay of about twelve months is ordinarily too long where the applicant already knew the essential basis of the proposed defence. Lack of funds and later discovery of supporting authority do not, without more, provide an acceptable explanation. The same emphasis on promptness applies under CPR 39.3 to an application by a party who failed to attend a hearing.

The Bank brought two related proceedings concerning forward-sale transactions under a Master Forward Sale Agreement. In the Part 7 claim, default judgment was entered after Agrinvest failed to acknowledge service or file a defence. In the Part 8 claim, the defendants failed to attend the hearing, resulting in declarations of non-liability and injunctions restraining proceedings in Mississippi and Egypt.

Agrinvest applied under CPR 13.3 to set aside the Part 7 default judgment and obtain permission to defend. The defendants also applied under CPR 39.3 to set aside the Part 8 judgment. The central questions were whether the proposed defence had a real or reasonable prospect of success and whether the applications had been made promptly.

1. Part 7 application. Agrinvest had a real prospect of defending the Bank’s claim. The wording of clause 13.2 of the MFSA gave rise to a cogent argument that the transactions had been terminated and that credit might have to be given for the Lakah Bonds. The Bank nevertheless had a respectable argument that the transactions were not terminated and that it could sue while retaining the Bonds, subject to transferring ownership if the outstanding sums were paid (paras [16]–[20], [28]).
2. Promptness was not the controlling factor under CPR 13.3, but it was a very important factor expressly identified by the rule. The public interest in finality meant that a party must act with reasonable celerity after learning of the judgment. The delay of one year and two weeks was far too long. Agrinvest already knew the Bank’s position, the wording of clause 13.2, and the substance of its proposed defence. Lack of funds and the later discovery of Socimer International Bank Ltd v Standard Bank London Ltd [2004] EWHC 1041 (Comm) did not justify the delay (paras [21]–[28]).
3. The application to set aside the Part 7 default judgment therefore failed.
4. Part 8 application. Since the defendants accepted that reopening the Part 8 judgment depended on success in the Part 7 application, the application under CPR 39.3 also failed. In any event, the court would have held that the fifteen-month delay was not prompt for the purposes of rule 39.3(5)(a). The defendants had long known the relevant facts and arguments (paras [29]–[30]).

First-instance decision on applications under CPR 13.3 and CPR 39.3. The judgment describes earlier orders and judgments in the related proceedings but records no appeal.