Winterbrook Global Opportunities Fund v NB Finance Ltd & Ors

For an application to strike out or obtain summary judgment, a foreign administrative determination recognised by the court must be treated as effective unless and until it is varied or set aside by the foreign court with jurisdiction. The English court should not anticipate that outcome by assessing expert evidence about what the foreign court may do. Where a contractual event of default depends on a liability, and the relevant foreign determinations establish that the liability never transferred to the party identified in the contract as the relevant bank or guarantor, the liability cannot be attributed to that party. The claim is unarguable and may be struck out.

Winterbrook, a beneficial owner of notes issued by NB Finance and guaranteed by Novo Banco, sought declarations that events of default had occurred under the note conditions. The alleged defaults depended on non-payment of an Oak Finance loan which, Winterbrook argued, could be attributed to Novo Banco following Portuguese banking-resolution measures.

NB Finance and Novo Banco applied to strike out the claim or obtain summary judgment under CPR 3.4 and CPR 24.2. Winterbrook applied to amend its particulars of claim. The applications proceeded on the basis that the proposed amendments had been made. The central issue was whether the Oak Loan could arguably be treated as having affected Novo Banco for the purposes of the note conditions.

1. Applications allowed. Winterbrook’s application to amend was dismissed. NB Finance’s and Novo Banco’s application to strike out the claim form and particulars of claim under CPR 3.4 and/or obtain summary judgment under CPR 24.2 succeeded.

2. The court was bound to apply the reasoning of the Supreme Court in Goldman Sachs International v Novo Banco SA [2018] UKSC 34. The August 2014 Deliberation and the 22 December 2014 Decision had to be treated as having a single effect. The Oak Loan therefore never transferred from Espirito Santo to Novo Banco.

3. The fact that the 22 December 2014 Decision was being challenged in Portugal did not alter the result. The English court had to recognise the Portuguese legal determination as it stood unless and until it was varied or set aside by the Portuguese courts. It was not appropriate on a strike-out or summary-judgment application to anticipate the result of those proceedings from Portuguese expert evidence.

4. The later Portuguese decisions were made in the context of the earlier first-instance decision in Goldman Sachs International v Novo Banco SA. Given the Supreme Court’s decision, it was unnecessary and unwise to predict their effect if the 22 December 2014 Decision were later varied or set aside.

5. The Guarantee did transfer to Novo Banco, but the Oak Loan remained with Espirito Santo. Under the Conditions, after 3 August 2014 the terms “Guarantor” and “Bank” referred to Novo Banco. Espirito Santo’s later default on the Oak Loan therefore could not constitute a default by Novo Banco, and the proposed attribution of that default to Novo Banco was unarguable.

6. The Oak Loan was distinct from the Notes and Conditions. Winterbrook’s attempt to establish a contractual nexus between them failed.

Not an appeal. The judgment records earlier proceedings in Goldman Sachs International v Novo Banco SA, including the first-instance decision of Hamblen J, the Court of Appeal decision, and the Supreme Court decision reported at [2018] UKSC 34. Those proceedings concerned the Oak Loan and informed the present applications.