GLAS SAS (London Branch) v European Topsoho SARL & Ors

Relief from sanctions requires consideration of the seriousness and significance of the breach, the reason for it, and all the circumstances, including disruption and wasted costs. A party cannot rely on a later event as a change of circumstances where it occurred before the procedural deadline.

Summary judgment is inappropriate where the defendant has a realistic prospect of success, even if the defence appears weak. The court may instead impose a condition requiring payment into court where success is improbable, the litigation conduct is concerning, or security is otherwise justified. The condition must be proportionate and realistically capable of compliance.

GLAS sought summary judgment against European Topsoho SARL, Dynamic Treasure Group Limited and Chenran Qiu on claims concerning the disposal of shares and alleged unlawful means conspiracy. It also sought judgment against European Topsoho for a deferred fee.

Dynamic and Ms Qiu applied out of time for extensions to acknowledge service and challenge jurisdiction. Ms Qiu also sought an extension to file and serve a defence. The court considered relief from sanctions, forum arguments, summary judgment, conditional orders under Civil Procedure Rules 1998, and the deferred fee claim.

1. Jurisdiction applications. Dynamic’s delay of approximately two years was a very significant breach. Its deliberate decision not to engage with the proceedings or the freezing order supplied no good reason. The delay caused substantial disruption and wasted costs. Relief from sanctions and the proposed extension were refused. The Singapore proceedings were commenced before the deadline and therefore were not a later change of circumstances. The Singapore enforcement proceedings were irrelevant to GLAS and Dynamic. Ms Qiu’s application also failed because the alleged change of circumstances disappeared once Dynamic’s application was refused.
2. Arguable forum merits. The provisional forum analysis did not support Singapore or the PRC as the appropriate forum. The location of the shares carried little weight, and the residence of witnesses was insufficient. The real issues concerned the authenticity of documents rather than foreign law. The court also considered that the statutory claim under s 423 of the Insolvency Act 1986 might not be available in the PRC and that unlawful means conspiracy was not recognised there.
3. Summary judgment. The critical documents raised serious questions about authenticity and authority, including the absence of corporate records, missing required signatures and unexplained account details. Nevertheless, documents provided some support for the defendants’ case and Ms Qiu’s evidence required testing at trial. Summary judgment on the principal claims was therefore refused.
4. Conditional orders. The defence appeared weak and unlikely to succeed. Under CPR 24.6(c) and CPR 3.1(3), the court was not required to calculate a precise percentage prospect of success. Conditions may further the overriding objective, particularly where there has been prolonged non-participation or doubt about good-faith conduct. A condition must not be impossible for a defendant with a real prospect of success to satisfy. Dynamic’s litigation was funded by Xinbo, and Ms Qiu had not shown inability to provide security. Each was therefore required to pay €9 million into court as a condition of defending.
5. Deferred fee. European Topsoho did not resist the €5 million claim. Summary judgment was entered for GLAS on that claim.

First-instance decision. The judgment records an earlier summary judgment for GLAS against European Topsoho on its debt claim, given on 27 October 2022 by Mr Simon Salzedo KC sitting as a deputy judge. The present judgment determined the later applications.