The judgment of Mr Justice Henshaw of the High Court of England and Wales was handed down on 10 January 2022 in Barclays Bank plc v Shetty. The judge ruled that while the High Court will adjourn a hearing if it is in the interest of fairness, a party cannot succeed in bringing an adjournment application at a late stage in proceedings if it failed to take the necessary steps in a timely manner when the claim was commenced. The High Court also provided a helpful overview of the principles that apply on a claim for the enforcement of a foreign (DIFC) judgment in England by way of an application for summary judgment.
Barclays Bank plc and UAE Exchange Centre LLC (UAEEC), a foreign exchange business founded by Dr Bavaguthu Raghuram Shetty, entered into a range of foreign exchange transactions. Dr Shetty had executed a guarantee in favour of Barclays in relation to the performance his company’s obligations (the Guarantee). Following UAEEC’s failure to pay currency amounts to Barclays, Barclays claimed an ‘early termination amount’, which was not paid by UAEEC. Barclays then served a formal demand on Dr Shetty under the Guarantee for the early termination amount plus accrued interest, which UAEEC also failed to pay.
Barclays therefore commenced proceedings against Dr Shetty before the Court of First Instance of the Dubai International Financial Centre Courts (DIFC Court), claiming the money due under the Guarantee. The DIFC Court awarded a judgment against Dr Shetty for the sum of nearly $131.5 million, plus costs and interest (DIFC Judgment).
On 27 August 2021, Barclays issued an application for summary judgment for the enforcement of the DIFC Judgment in England.
Dr Shetty sought an adjournment of the hearing of the summary judgment application on the following grounds:
The judge noted that in circumstances where the court decides that “it is necessary to adjourn a hearing in the interest of fairness, then it must be adjourned, for the court cannot countenance an unfair hearing.”
Although the parties had cited (among others) certain cases concerning adjournments for medical reasons, the judge considered that “…the guiding principle of fairness, applies also when considering an application to adjourn so as to enable the applicant to be professionally advised and represented”.
However, the judge could not find “any arguable ground for resisting enforcement of the DIFC Judgment” and dismissed the adjournment application for four reasons:
The judge concluded that Dr Shetty “has not satisfied the onus of establishing that it would be unfair to proceed with the summary judgment application. He has not shown that any problem arising from lack of legal representation has arisen for any reason other than his own unexplained delay in taking steps to rectify matters”. The judge was persuaded that the adjournment application was a “last minute application” that had been brought as “a delaying tactic”.
Civil Procedure Rule (CPR) 24.2 provides the following:
“The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if –
In this context, a “real prospect” means “realistic” as opposed to “fanciful”, and it is more than merely arguable.
In order for a judgment of the DIFC Court to be enforceable at common law in England:
Therefore, to successfully resist the summary judgment application, Dr Shetty must have had a real prospect of arguing that one of the four grounds above did not apply, or that there was another compelling reason to proceed to trial.
Taking each issue in turn:
One of the arguments advanced on behalf of Dr Shetty at the hearing in respect of the Immediate Judgment application was that UAEEC was not liable to Barclays because Barclays had acted negligently when it did not promptly cease to trade with UAEEC following UAEEC’s first default on 10 March 2020.
In a letter to Barclays, Dr Shetty cited a number of Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) rules and framed the argument as a proposed counterclaim for damages under section 138D of the Financial Services and Markets Act 2000 (FSMA). Dr Shetty intended to rely on this counterclaim by way of set-off against the DIFC Judgment.
The judge concluded that this “counterclaim” would not provide a compelling reason as to why the case should proceed to trial, rather than be dealt with by way of summary judgment. The following reasons were given:
The judge therefore held that Barclays was entitled to summary judgment.
Arising out of this judgment is a helpful indication for litigants as to the principles an English court will apply on an application for summary judgment under CPR 24.2 to enforce a DIFC judgment in England, in particular, where the defendant seeks to resist summary judgment through its reliance on a counterclaim for damages by way of set-off.
Furthermore, this judgment serves as a useful reminder for litigants of the following:
Considerations of fairness do not entitle a defendant, particularly one who has had professional assistance (even if informally) for several months, to fail to take steps which were (at least on Dr Shetty’s case as to the effect of the Indian Orders) obviously necessary as soon as the claim was commenced, and then to make a last minute adjournment application based on lack of legal representation.
In other words, in circumstances where a party makes an adjournment application on the basis of a lack of legal representation, yet has failed to take the necessary steps to improve their position (and indeed had already benefitted from professional assistance), such an application may not get a sympathetic reception from the court.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
 Barclays Bank plc v Shetty  EWHC 19 (Comm).
 Dr Shetty referred to the case law of the European Court of Human Rights, which indicates that the right to a fair hearing under Article 6 of the European Convention of Human Rights is violated where a party is neither represented nor capable of effectively representing himself.
 Bilta (UK Ltd) (In Liquidation) v Tradition Financial Services Ltd  EWCA Civ 221; and Solanki v Intercity Telecom Ltd  EWCA Civ 101.
 Swain v Hillman  1 All ER 91; ED & F Man Liquid Products v Patel  EWCA Civ 472.
 GFH Capital Limited v Haigh and others  EWHC 1269 (Comm), - (quoting the Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen’s Bench Division, England and Wales issued in January 2013).
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