Banco de Sabadell SA v Cerberus Global NPL Associates LLC & Ors

A very late amendment introducing a materially different factual case may be refused where it would require disclosure and witness evidence to be revisited and would imperil the trial date. The court must also have a sufficient evidential basis to conclude that any new legal proposition necessary to make the amendment relevant is seriously arguable. A purported reformulation that merely restates the existing case, or renders the proposed amendment purposeless, does not justify amendment. Minor issues concerning the scope of trial witness statements should ordinarily be left to trial where a freestanding strike-out application would be disproportionate.

The claimant applied to re-amend its pleadings in proceedings concerning the interpretation of contractual provisions under Spanish law. The proposed amendments would allege that the parties privately held the same understanding of how the contract operated and would rely on the concept of common, or more literally evident, intention under article 1281 of the Spanish Civil Code.

The defendants also applied in relation to the scope of factual witness evidence. The court considered whether the proposed re-amendments introduced a new case, whether the evidence supported the relevant Spanish-law proposition, whether the amendments threatened the trial timetable, and whether objections to the witness statements justified a separate application.

1. Re-amendment application dismissed. The proposed amendments introduced a new and materially different factual case: that, privately and without prior communication, the parties happened to share the same understanding of the contract. That was the type of case previously said not to have been pleaded.
2. Allowing the amendments would require the scope of disclosure, the identity of appropriate factual witnesses and the scope of existing factual evidence to be revisited. The amendments would therefore imperil the trial date.
3. The evidence did not provide a sufficient basis for concluding that the necessary proposition of Spanish law was seriously arguable so as potentially to justify a very late amendment threatening the trial date.
4. The claimant’s suggested reformulation did not cure the problem. Properly understood, it merely relied on the same objectively assessed material already pleaded. It either duplicated the existing case or entirely neutered the proposed amendments, demonstrating that they served no useful purpose.
5. The witness evidence application was also dismissed. Although individual passages in witness statements might extend into comment or argument, it was disproportionate to convert such matters into a freestanding strike-out application. Any such issues could be addressed at trial.
6. The court allowed the separate application to adjust the pre-trial timetable. It also raised a possible clarification to the expert instructions by replacing “common intention” with “evident intention (la intención evidente)” under the second paragraph of article 1281 of the Spanish Civil Code, subject to any objection.