The Public Institution for Social Security v Muna Al-Rajaan Al-Wazzan & Ors

Applications to amend pleadings at a late stage require a fair balance between the amendment’s importance and the prejudice caused to the opposing party. Relevant considerations include lateness, the reason for delay, clarity, and the respective prejudice. Where an amendment materially widens a foreign-law case and may require new factual and expert evidence, the resulting prejudice may justify refusal even if the amendment concerns an existing cause of action.

A pleading must state the material facts and the legal conclusions relied upon. It need not set out a complete legal analysis. In a trust case, the court may consider oral arrangements and subsequent conduct, as well as a later written agreement. Cross-examination may address pleaded issues, credibility and evidential dishonesty, subject to judicial control and fair notice of substantive allegations.

The claimant sought permission to amend its case against the Man defendants concerning corporate liability under article 102(2) of the Swiss Penal Code. The application was made during the trial, after the parties had prepared factual and expert evidence on the existing pleaded case.

The claimant also sought permission to amend its case against the Pensée Foundation to plead expressly that its assets were held on trust for the deceased former director general of the claimant. A related dispute concerned the permissible scope of cross-examination of Pensée’s witnesses, including questions about third-party knowledge, document falsity and dishonesty.

The central issues were whether the proposed amendments caused unfair prejudice and how far cross-examination could go beyond expressly pleaded allegations of dishonesty.

1. Man amendment refused. The proposed amendments were made very late, during the trial, and there was no good reason for the delay. The amendment widened the existing article 102(2) case in a complex area involving Swiss law, compliance standards and business practices. It could require additional factual witnesses and expert evidence, and the interaction between those forms of evidence meant that further expert evidence alone would not cure the prejudice. The amendment was therefore refused. The existing case was to proceed on the basis of the existing factual and expert evidence.
2. The relevant amendment principles, approved in ABP Technology Ltd v Voyetra Turtle Beach Inc [2022] EWCA Civ 594 and summarised in PJSC Tatneft v Bogolyubov [2020] EWHC 623 (Comm), require consideration of timing, the explanation for delay, clarity and the parties’ respective prejudice. Lateness is relative, but the need to revisit completed disclosure, witness evidence or expert evidence is important.
3. Pensée amendment allowed. The proposed trust amendments did not materially expand the factual enquiry or legal conclusions already arising from the pleading. A pleading must state material facts rather than provide a full legal analysis. The claimant could rely on the Paris meeting, the parties’ arrangements, the written Pensée Agreement and subsequent conduct. Those matters could support an argument that the assets were held on trust for the deceased, with a real prospect of success.
4. Cross-examination. The proper starting point was to permit questions directed to pleaded issues or the credibility of the witness, subject to judicial control and the rule that answers going purely to credit are final. Dishonesty arising evidentially need not always be pleaded as a cause of action. Specific allegations of dishonesty forming part of the substantive case should, however, be fairly identified, and the court imposed limited restrictions concerning allegations against persons not positively accused of dishonesty.
5. The court permitted cross-examination about the dealings of Hugues Lamotte, other Deltec personnel, later documents and whether the overall arrangements were usual or consistent with a nominee arrangement. It did not permit positive allegations that unaccused individuals were dishonest, or that documents at the inception of the scheme were false except where already identified in the pleading. No formal order restricting cross-examination was considered necessary at that stage.