Rawbank SA v Travelex Banknotes Ltd

Where a claimant makes a Part 36 offer and obtains judgment at least as advantageous as the offer, the court must generally apply the specified consequences unless doing so would be unjust. A very small discount can still be a genuine settlement offer where the claimant has a near-certainty of success and gives up an amount representing interest or costs. The defendant’s insolvency may make some enhanced consequences unjust, but it does not necessarily excuse costs and interest consequences caused by delaying judgment when liability could have been admitted earlier. Where the Part 14 request procedure has not been used, the usual 14-day payment period under Rule 40.11 applies.

Rawbank claimed damages and/or rescission from Travelex Banknotes Ltd under a contract for the sale and delivery of banknotes. After Rawbank paid for orders totalling $60,072,000, delivery did not take place. Travelex accepted that judgment should be entered for the contractual claim and agreed to pay the costs, leaving disputes about pre-judgment interest, the consequences of Rawbank’s Part 36 offer, and the date for payment.

The court also considered whether the claim fell within the procedure for judgment following an admission, and whether Travelex’s insolvency and proposed restructuring justified immediate payment or withholding enhanced costs and interest.

1. Judgment and interest. Judgment was entered for Rawbank for $60,072,000. The contractual rate of 2% above Barclays Bank’s base rate was a reasonable proxy for the appropriate commercial rate for damages arising from breach of the same contract. The rate at which Travelex could borrow from its lenders was irrelevant to the rate payable to Rawbank.
2. Part 36 offer. The offer to settle for £48,290,000 was a genuine attempt to settle, despite representing only a 0.3% discount from the amount claimed. The court rejected a purely mathematical approach. Liability and quantum were effectively clear, Rawbank had a near-certainty of success, and the discount exceeded the interest likely to accrue during the offer period and was likely greater than the costs incurred. The guidance in AB v CD [2011] EWHC 602 (Ch) and Huck v Robson [2002] EWCA Civ 398 was considered in that contextual assessment.
3. Unjustness under Part 36. Travelex’s insolvency and inability to pay the settlement sum were relevant circumstances under Rule 36.17(5), and meant that it would be unjust to impose at least some of the consequences in Rule 36.17(4). They did not, however, make it unjust to order indemnity costs and interest on the principal sum at 8% from 25 May 2020. Travelex could have admitted liability earlier, avoiding further costs and accelerating the judgment interest.
4. Date of payment. The application was formally one for summary judgment under Part 24, and permission was granted under Rule 24.4(1). Although the solicitor’s letter amounted to a written admission, Rawbank had not filed the request required by Rule 14.4. Part 14 therefore did not directly govern, and the ordinary 14-day period under Rule 40.11 applied. A stay of proceedings is distinct from a stay of enforcement, and entering judgment would not itself interfere with the proposed restructuring. The circumstances in Bluecrest Mercantile BV v Vietnam Shipbuilding Industry Group [2013] EWHC 1146 (Comm) were far removed, and the court did not decide the merits of the withdrawn stay application.
5. Travelex was ordered to pay the judgment sum within 14 days, interest at 2% above Barclays Bank’s base rate until 25 May 2020 and at 8% thereafter, and Rawbank’s costs on the standard basis until 25 May 2020 and the indemnity basis from that date.

First-instance decision. The judgment records earlier interlocutory proceedings, including the refusal of a freezing order and the refusal of an injunction by Birss J on 11 May 2020, together with limited disclosure and asset-disposal notice orders. No appeal is stated.