Standard Chartered Bank (Hong Kong) Ltd & Anor v Independent Power Tanzania Ltd & Ors

Summary judgment is appropriate where the defendant has no real prospect of successfully defending the claim or issue. A syndicated-loan transfer clause may operate as a standing offer to novate, so the borrower’s further participation is unnecessary if the contractual mechanism is followed. An inaccurately addressed notice may nevertheless be effective where its objective meaning is clear.

Failure to register a charge may make it void against a liquidator or creditor without making it void against the chargor. English-law security documents may create equitable security interests over foreign assets. A speculative and inadmissible expert case cannot establish an arguable defence. The illegality doctrine requires a principled and proportionate assessment of public policy and did not justify denying repayment of legitimate loans merely because collateral payments were alleged to be improper.

The claimants sought summary judgment against three Tanzanian defendants for sums due under a 1997 facility agreement and declarations concerning a suite of financing and security documents. The loan had been restructured, transferred by assignment and novation to the first claimant, and administered by the second claimant. The defendants had challenged the English forum, but those challenges had been dismissed by the High Court and the Court of Appeal, with permission to appeal refused by the Supreme Court.

The defendants did not participate in the summary judgment proceedings. The court therefore considered allegations advanced in Tanzanian proceedings, including challenges to the transfer, registration and validity of security, and an unpleaded illegality case based on expert reports. The central issues were whether any of those matters disclosed a real prospect of successfully defending the claims.

1. Disposition. The claimants obtained summary judgment, declarations concerning the financing documents and security, and judgment for US$168,800,063.87. The certification by the Facility Agent was conclusive under the Facility Agreement.
2. Summary judgment. Under CPR rule 24.2(a)(ii), the defendants needed a case better than merely arguable. The court could consider points which might have been raised by absent defendants, but none disclosed a sustainable defence.
3. Transfer and novation. The transfer clause operated as a standing offer to novate. Delivery and countersignature of the Novation Notice were sufficient; no further corporate approval by the borrower was required. Any defect in addressing the notice would not matter because its meaning was objectively clear. The debt was also validly assigned in law or equity.
4. Security. The Tanzanian registration provisions did not make the security void against the chargor. The English-law Security Deed created equitable security interests operating in personam, including over foreign assets. The defendants were additionally precluded by contractual warranties and could not rely on their own failure to register.
5. Expert evidence and illegality. The Tanzanian expert reports were inadmissible in England because they did not comply with CPR Part 35 and lacked the required objectivity and independence. In any event, the alleged illegality concerned collateral payments and did not convert the legitimate loan into an illegal loan. The 2001 and 2003 Variations were restructurings, not new loans, and were commercially advantageous to the borrower.
6. Applying the majority reasoning in Patel v Mirza [2016] UKSC 42, denial of repayment would be arbitrary, unjust and disproportionate. The claims sought repayment of money advanced for a legitimate purpose, and refusal would confer an unmerited windfall on the borrower.

• High Court (Commercial Court): jurisdiction challenges were dismissed in [2015] EWHC 1640 (Comm).
• Court of Appeal: the defendants’ appeal was dismissed on 28 June 2016 in [2016] EWCA Civ 411.
• Supreme Court: permission to appeal was refused on 19 July 2016.