Punjab National Bank (International) Ltd v Techtrek India Ltd & Ors

Summary judgment requires the claimant to show that the defendant has no real prospect of defending the claim and that no other compelling reason requires a trial. Where the claimant relies on hearsay evidence from a corporate entity, the source must be identified by naming the relevant person or persons; referring generally to the entity or its officers is insufficient. Failure to identify the source does not make the evidence inadmissible, but may substantially reduce its weight, particularly on a central issue. A party seeking summary judgment must prove the essential facts supporting its claim. The court will not ordinarily invite a claimant to improve inadequate evidence after the hearing. Matters of procedure and evidence are governed by the law of the forum, while substantive validity and construction of a contract are governed by the applicable foreign law.

The claimant bank sought summary judgment against the third defendant under an alleged personal guarantee governed by Indian law. The guarantee secured facilities provided to Techtrek India Ltd and contained a separate indemnity covenant. The third defendant disputed whether the document produced was the document he signed and relied on formal defects, delayed execution, lack of countersignature and the absence of agreement by Techtrek to its form.

The claimant relied on witness statements and expert evidence on Indian law. The central questions were whether the claimant had proved execution of the guarantee and whether its form had been agreed by Techtrek, so that the claim could properly be determined without a trial.

1. Summary judgment principles. The court applied the test under CPR rule 24.2, as summarised in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) and approved in AC Ward & Son v Caitlin (Five) Ltd [2009] EWCA Civ 1098. The claimant had to establish that the defence had no real prospect of success and that there was no other compelling reason for trial.
2. Hearsay evidence. Under CPR Part 32 and Practice Direction 32, a witness statement relying on information from a person employed by or acting for a company must identify that person by name. Referring only to the company or its officers does not comply with the requirement to identify the source. Following Clarke v Marlborough Fine Art Ltd [2002] 1 WLR 1731, the defect affected the weight of the evidence rather than its admissibility. The claimant’s evidence about execution of the guarantee was therefore insufficient.
3. Applicable law. Indian law governed substantive questions concerning the construction and enforceability of the guarantee. Procedure, evidence, the burden of proof and the summary judgment test were governed by the lex fori. The guarantee was capable in principle of being a valid unilateral contract, and most of the third defendant’s substantive objections had no real prospect of success.
4. Unresolved matters. The claimant had not proved that the document produced was the document signed by the third defendant. It had also produced no evidence that Techtrek had agreed the form of the guarantee, a contractual requirement distinct from execution. The third defendant’s status as a director did not establish that agreement.
5. Disposition. The court declined to postpone judgment to allow the claimant to provide further evidence. That would be exceptional, particularly where the deficiencies had been identified in the defence and the claimant had had ample time to prepare its case. The application for summary judgment was dismissed.