BANK OF BARODA (acting by its Ras Al Khaimah branch) & Ors v GVK COAL DEVELOPERS (SINGAPORE) PTE LTD & Ors

Under Article 9(3) of Regulation 593/2008, the court must ask whether the relevant obligations were or had to be performed in the foreign country, whether the foreign provisions render performance unlawful, and whether effect should be given to them. The provision is to be interpreted restrictively. It is sufficient that some contractual obligations were performed, or had to be performed, in the country; the extent of performance is relevant principally to discretion.

A late amendment may be allowed where it has a real prospect of success and refusal, combined with other circumstances, would jeopardise a fair trial. A trial adjournment remains a remedy of last resort. The illness of an essential expert and late clarification of the opposing quantum case may justify adjournment where the case cannot fairly proceed without the evidence.

The claimants, six banks, brought proceedings concerning substantial sums allegedly due under two English-law facility agreements and related guarantees involving companies in the GVK group.

Shortly before the listed trial, the defendants applied to re-amend their defence, adduce expert evidence of Indian law and adjourn the trial. The proposed amendments relied on Indian COVID-19 moratoria, force majeure principles and related issues under Article 9(3) of Regulation 593/2008. The defendants also lacked permitted forensic accountancy evidence after their expert was hospitalised with COVID-19.

The central issues were whether the proposed Indian-law case had a real prospect of success, whether the amendments should be permitted despite their lateness, and whether proceeding without the expert evidence would produce an unfair trial.

1. The applications were interwoven and were determined together. Article 9(3) of Regulation 593/2008 involves three stages: identifying the place where the contractual obligations were or had to be performed; deciding whether the foreign provisions render performance unlawful; and, if so, exercising the discretion whether to give them effect. The provision must be restrictively interpreted, as explained in Greece v Nikiforidis [2017] CEC 658.

2. The defendants had adduced prima facie compelling evidence that at least some payments and related obligations were performed, or had to be performed, in India. Evidence that payments were made to an Indian banking unit, that funds were disbursed from India, and that security obligations were performed in India was sufficient to make the first stage more than merely arguable. Disputed questions concerning the precise payment obligations and timing were matters for trial.

3. The proposed case that Indian moratoria and force majeure provisions rendered performance unlawful, rather than merely ineffective or excused, also had more than a merely arguable prospect. It was unnecessary that all contractual obligations be performed in India. The extent of performance in India was principally relevant to the discretion at the third stage. The court considered that the international and English-law connections did not outweigh the substantial Indian connections at the interlocutory stage.

4. The implied-term case had, just, some prospect of success, although it was of marginal relevance. The proposed amendments were very late and the change of legal team was no adequate explanation. The guidance in Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) and Donovan and Naled v Grainmarket [2019] EWHC 1023 (QB) was applicable: fresh consideration by new counsel does not ordinarily justify a late amendment.

5. Nevertheless, the defendants’ expert had become seriously ill and could not complete the forensic accountancy report. Given the late clarification of the claimants’ quantum case, proceeding without that evidence would jeopardise a fair trial. Splitting the trial would be inconsistent with the overriding objective because it would duplicate costs and evidence and would not provide an effective resolution of the interdependent issues.

The Indian-law evidence and re-amendment applications, and the adjournment application, were granted. The trial was adjourned.