Betta Oceanway Company v SC Tomini Trading SRL

Under rule 19.2(2) of the Civil Procedure Rules 1998, matters “in dispute” are matters “in issue”. Joinder may therefore be ordered even where the existing parties agree on the issue which the proposed party wishes to contest.

The court must consider whether joinder is desirable, having regard to the proposed party’s affected rights and the overriding objective. A shareholder cannot ordinarily intervene merely to challenge a company’s conduct of litigation. Joinder may, however, be appropriate where the shareholder will be directly affected and there is a real risk that commonly controlled parties are seeking a declaration for an ulterior purpose amounting to abuse of process.

A genuinely arguable case should not be discounted in the joinder assessment merely because it appears weak. Joinder may be made conditional upon security for costs.

Betta claimed declarations and judgment against Tomini for a debt which Tomini admitted. Both companies were ultimately controlled by the same individual. Georgios Vatistas, a minority shareholder and former director of Tomini, alleged that the debt had been cancelled and that the proceedings formed part of a fraudulent scheme to establish that his shares were worthless.

Mr Vatistas applied to be added as a defendant under rule 19.2(2) of the Civil Procedure Rules 1998. The Commercial Court dismissed the application in [2024] EWHC 2068 (Comm). It regarded Romania as the appropriate forum, considered the defence of the claim a matter for Tomini’s board and described Mr Vatistas’s case as weak.

The central issues on appeal were whether the judge had applied the correct approach to joinder, whether Mr Vatistas had a real prospect of establishing his allegations, and whether joinder was desirable.

1. Appeal allowed unanimously. “Matters in dispute” in rule 19.2(2) of the Civil Procedure Rules 1998 must be interpreted widely as meaning matters “in issue”. The existence and validity of the debt were therefore matters in issue even though Betta and Tomini agreed that the debt was due. Without joinder, the declaration would probably be determined without adversarial evidence or submissions: per Males LJ, with whom Asplin and King LJJ agreed.

2. Whether joinder is desirable requires assessment of all relevant factors, guided by the need to hear persons whose rights may be affected and by the overriding objective. An appellate court ordinarily interferes with that evaluative decision only where no reasonable tribunal could have reached it or an identifiable flaw undermines the conclusion. The judge’s failure to consider the highly unusual purpose and structure of the proceedings was such a flaw.

3. A shareholder cannot ordinarily intervene merely because the company’s directors are conducting litigation inefficiently, even if the value of the shares may be affected. This case was materially different. Both litigating companies were under common control; no ordinary commercial reason for obtaining the declaration had been identified; and the unrebutted evidence indicated that the judgment could be used in Romanian proceedings to establish that Mr Vatistas’s shares were valueless. He was therefore directly affected.

4. There was a real issue whether the debt had been cancelled and whether the proceedings were an abuse of process brought for an ulterior purpose. Although Mr Vatistas faced serious credibility and evidential difficulties, his case could not be held to have no real prospect of success. That conclusion was inappropriate in a complex case requiring disclosure and oral evidence. Once the case survived that threshold, its apparent weakness was not a relevant consideration in deciding whether joinder was desirable.

5. The English court itself had to determine whether its process was being abused. Mr Vatistas would not usurp Tomini’s board because Tomini could maintain its admission while he alleged that the admission formed part of a fraudulent scheme. His participation was the only means of ensuring an adversarial determination before the court granted a potentially false declaration.

6. Mr Vatistas was to be added as a defendant if he promptly provided £400,000 as security for the existing parties’ costs. He would then serve a statement of case, after which the Commercial Court would hold a case management conference.

1. Court of Appeal (Civil Division): In [2025] EWCA Civ 595, unanimously allowed Mr Vatistas’s appeal and ordered his joinder as a defendant conditional upon provision of £400,000 security for costs.
2. High Court, Commercial Court: In [2024] EWHC 2068 (Comm), a deputy High Court judge dismissed Mr Vatistas’s application to be joined as an intervenor or defendant.