Bank of India v Cati Mandencilik Ithalat VE Ihracat AS & Anor

Summary judgment is appropriate where the claimant establishes that the defendant has no real prospect of successfully defending the claim and that there is no other compelling reason for a trial. An unchallenged debt arising under a facility agreement and guarantee, supported by evidence of default, demand and admission of liability, may satisfy that test. Commercial difficulty or inability to pay does not itself disclose a defence to contractual repayment obligations.

The claimant bank sought summary judgment against a Turkish borrower and an Indian guarantor. The facility agreement was governed by English law and contained jurisdiction and local-service provisions. The guarantee was governed by Indian law and was limited to a specified amount, including interest and costs.

The borrower had made limited payments and then stopped paying. Demands were made on both defendants. Neither provided a substantive response or identified a defence. The central issue was whether the claimant had shown that there was no real prospect of a successful defence and no other compelling reason for a trial.

1. Application granted. The claimant obtained judgment against both defendants for the sum claimed, together with costs.
2. The court applied the summary judgment test: the claimant had to show that there was no real prospect of a successful defence and that there was no other compelling reason for a trial ([2018] EWHC 3860 (Comm), para [10]).
3. The facility agreement provided for repayment of capital and interest by instalments, default interest and compounding. It also contained an English law and jurisdiction clause and a contractual provision permitting local service. The borrower had defaulted and the outstanding debt had increased through default interest.
4. The guarantee covered the borrower’s obligations and liabilities under the finance documents, subject to its stated limit and including interest and costs. Demand had been duly made on both defendants.
5. The defendants’ failure to pay arose from the failure of the underlying investment and their asserted cash deficiency. Their correspondence admitted the liability and sought an extension of time, but did not identify a substantive defence. The court concluded that there was no conceivable defence and no other compelling reason for a trial.