Geoffrey Galley v Royal Forex Ltd
[2023] EWHC 3245 (Comm)
Tradin Organic Agriculture BV v Gold Grain Gida Tarim Ürünleri Sanayi Ve Ticaret Anonim Sirketi
24 June 2024
[2024] EWHC 1562 (KB)
High Court
Two companies had a business dispute. One company got a default judgment because the other company didn't respond to the lawsuit. The court refused to overturn the judgment because the company that didn't respond didn't have a good excuse for ignoring the case.
Key Facts
- •Tradin Organic Agriculture BV (Tradin), a Dutch company, and Gold Grain Gida Tarim Ürünleri Sanayi ve Ticaret Anonim Sirketi (Gold Grain), a Turkish company, had a series of agreements for the supply of organic foods.
- •Disputes arose, leading to Tradin issuing proceedings in England for ~£1 million, and Gold Grain issuing proceedings in the Netherlands for ~€50 million.
- •Tradin obtained default judgment in England after Gold Grain failed to file an acknowledgement of service or defense.
- •Gold Grain applied to set aside the default judgment based on defective service, lack of jurisdiction, and failure of full and frank disclosure by Tradin.
- •The loan agreements between the parties contained an English governing law clause and a potentially ambiguous jurisdiction clause.
- •The Exclusive Supplier Agreement (ESA) was governed by English law but lacked a jurisdiction clause.
Legal Principles
CPR 13.2 (non-discretionary) allows setting aside default judgment for improper service.
CPR 13.2
CPR 13.3 (discretionary) allows setting aside default judgment if the defendant has a real prospect of successfully defending the claim and the court should exercise its discretion to set aside. Prompt application and relief from sanctions must be considered (Denton factors).
CPR 13.3
A choice of law clause is not automatically a choice of jurisdiction clause. The court has discretion even if there's an agreement to submit to its jurisdiction (forum non conveniens).
Common Law
An application to set aside default judgment does not always equate to submission to jurisdiction, particularly when coupled with jurisdictional challenges.
Case Law (implied)
In applications for default judgment, full and frank disclosure is required on matters material to the court's decision. This includes service and responses to service.
Case Law (implied)
Relief from sanctions requires consideration of the Denton three-stage test: (1) seriousness of breach, (2) explanation for breach, (3) overall justice.
Denton
Delay in responding to proceedings without good reason can lead to the application being dismissed.
Case Law (implied)
Outcomes
Gold Grain's application to set aside the default judgment was dismissed.
The court found that service was not defective, Gold Grain lacked a real prospect of successfully challenging jurisdiction, and failed to demonstrate a good reason for its delay in responding to the claim. Further, the court found that there was insufficient evidence of a lack of full and frank disclosure by Tradin.