Sberbank of Russia v The OJSC International Bank of Azerbaijan

When an appeal concerns a narrow issue that may not resolve all issues in a pending claim, the court may continue case management rather than stay the claim. The court should apply the overriding objective, weighing prospective delay, prejudice, the work required before trial and the realistic extent to which the appeal may determine the claim. A pending appeal does not automatically justify adjournment. Case management directions may be given while preserving the parties’ ability to seek further directions if appellate decisions materially change the position.

Sberbank claimed repayment of a loan from the OJSC International Bank of Azerbaijan. The defendant relied on an Azeri restructuring plan and argued that the debt had been discharged or should be recognised as discharged under English common law.

The defendant sought to adjourn the case management conference and stay further steps pending an appeal concerning whether a permanent moratorium could be ordered under article 21 of the Cross-Border Insolvency Regulations 2006, and any later appeal. The court had to decide whether the action should progress towards trial while those appellate proceedings remained unresolved.

1. Application dismissed. The court refused to adjourn the case management conference or stay the proceedings. Case management directions towards trial were given, with costs in the case.
2. The pending Court of Appeal proceedings concerned only the jurisdiction to grant a permanent stay under article 21 of the Cross-Border Insolvency Regulations 2006 and, if jurisdiction existed, whether it should be exercised. They did not determine the Gibbs issue or the pleaded alternative argument that the restructuring plan should not be recognised on public-policy grounds.
3. Under the overriding objective in CPR 1.1 and 1.2, including the need to deal with cases expeditiously and fairly, the court had to consider the inevitable delay if the action were stopped. That delay could prejudice a claimant pursuing a debt claim, even without evidence of specific prejudice.
4. The possibility that an appellate court might provide general guidance did not justify assuming that it would determine the facts or dispose of the alternative common-law issues. Even if the Gibbs rule were altered or limited, the alternative issue might remain for decision at trial.
5. The court was entitled to consider the matter afresh despite the earlier case-management order. It gave weight to the earlier judge’s familiarity with the issues, but concluded that active progression was presently preferable. The action might later be stayed or otherwise adjusted if appellate decisions produced a material change of circumstances.
6. The contested stay issue was closely connected with the ordinary purposes of a case management conference. It was not a discrete event warranting departure from the usual order that costs be costs in the case.

• High Court (Insolvency and Companies List): Hildyard J refused the application for an indefinite moratorium, reported at [2018] Bus LR 1270, and later permitted Sberbank to issue and prosecute its claim up to, but not including, judgment, as reported at [2018] BPIR 837.
• High Court (Commercial Court): The present court dismissed the application to adjourn the case management conference and stay the action.