DVB Bank SE v Isim Amin Ltd & Anor

An irrevocable contractual appointment of an agent for service may remain effective even if the agent’s actual authority has lapsed following entry into creditors’ voluntary liquidation. The contractual appointment is an unqualified holding out on which service may rely. The court need not require enquiries into the agent’s current relationship with the defendant where that would undermine the clause’s purpose. Service effected in accordance with the appointment may therefore constitute good service under Civil Procedure Rules 1998, Part 6.11, permitting judgment in default where no acknowledgment of service or defence has been filed.

The claimant applied for judgment in default on a loan claim. The defendants had filed neither acknowledgments of service nor defences. The loan agreement appointed a named company irrevocably as agent for service of process and stated that failure by the agent to notify a borrower would not invalidate proceedings.

The claim form and related documents were sent by post and courier. By then, the appointed agent was in creditors’ voluntary liquidation, and its liquidators had ceased functioning, although the company had not yet been struck off. The issue was whether service was valid for the purposes of obtaining default judgment.

1. The application for judgment in default succeeded. The defendants had not filed acknowledgments of service or defences.

2. The contractual service clause constituted an irrevocable and unqualified holding out that the nominated company had authority to accept service of proceedings concerning the finance documents.

3. Any lapse in the company’s actual authority resulting from the creditors’ voluntary liquidation did not prevent service under the contractual appointment. The possibility that liquidation might terminate actual authority did not displace the separate contractual effect of the clause.

4. Requiring the claimant to investigate the agent’s up-to-date relationship with the defendants would undermine the clause’s purpose, which was to provide a straightforward method of service based on its wording.

5. There had accordingly been good service under Part 6.11 of the Civil Procedure Rules 1998. The claimant was entitled to default judgment, with the terms of the judgment to be addressed thereafter.