Industrial and Commercial Bank of China Ltd, Mumbai Branch v Ambani

On summary judgment, the claimant must show that the defence has no realistic prospect of success and that there is no other compelling reason for trial. The test is one of reality, not probability. A factual defence supported by witness evidence should not be rejected at this stage unless the evidence is bound to be disbelieved or is so obviously untrue that acceptance would be fanciful. The court must avoid conducting a mini-trial. Where a defence just survives that threshold but appears improbable, the court may make a conditional order requiring payment into court under Part 24 of the CPR and the relevant practice direction.

The Bank claimed payment under a personal guarantee said to have been executed on behalf of Mr Ambani by an authorised signatory under a power of attorney. RCom had defaulted under a substantial facility agreement, and the Bank had made repeated demands. Mr Ambani accepted signing the power of attorney but contended that he had understood it to authorise only a non-binding comfort letter, that no guarantee was annexed, and that he had granted neither actual nor apparent authority.

The Bank applied for summary judgment, alternatively for a conditional order requiring payment into court. The central issues were whether Mr Ambani’s defence had a real prospect of success on actual or apparent authority, and whether, although possible, it was improbable enough to justify a conditional order.

1. Summary judgment dismissed; conditional order to be made. The court held that the claimant had not established that Mr Ambani’s defence had no real prospect of success. The application for summary judgment was therefore dismissed. A conditional order was appropriate, but its precise terms were deferred for further evidence and submissions concerning Mr Ambani’s financial position.
2. Under Part 24 of the CPR, the question is whether the defence is realistic rather than fanciful. The criterion is absence of reality, not probability. The court must not conduct a mini-trial or resolve disputed factual issues as though deciding the case finally.
3. Where witness evidence is relied on against summary judgment, it may be rejected at this stage only where the witness is bound to be disbelieved or the evidence is so obviously untrue that it would be fanciful to accept it. Mr Ambani’s evidence was incomplete, implausible and highly unlikely, but the judge was not prepared conclusively to reject it on the application.
4. On actual authority, the evidence gave Mr Ambani a real prospect of establishing that he lacked knowledge of, and had not authorised, the guarantee, although only just. The alternative argument that the power of attorney objectively authorised the guarantee also raised issues of Indian construction law, the missing annexure and the surrounding dealings which could not safely be resolved without rejecting parts of his evidence.
5. The apparent-authority arguments did not justify summary judgment. The first substantially replicated the construction issue arising on actual authority. The alternative argument, based on the power of attorney clothing the signatory with authority to complete or define the document, remained properly arguable in the circumstances.
6. The defence was nevertheless improbable. The court considered it highly likely that it would fail at trial, making this a proper case for a conditional order under paragraph 5.2 of PD 24 and paragraph 4 of the relevant practice direction.