Zavarco PLC v Tan Sri Syed Mohd Yusof Bin Tun Syed Nasir

The claimant, Zavarco plc (“Zavarco”), issued an application for summary judgment as long ago as 15 May 2019. The reason why it has taken so long to come on for hearing is that the question raised by an earlier application, whether the claim for payment in this case had merged with a declaratory judgment of the court in November 2017, has been litigated up to the Supreme Court. By their judgment handed down on 19 February 2025 ([2025] UKSC 5), the Supreme Court determined that the doctrine by which a cause of action merges with a judgment does not apply to a declaratory judgment.

The claimant’s 2019 application was subsequently listed to be heard. Then, on 7 October 2025, the defendant, Tan Sri Syed Mohd Yusof Bin Tun Syed Nasir (“Mr Nasir”) issued a counter application seeking reverse summary judgment on the grounds of limitation. It is that issue with which this judgment is principally concerned.

The factual background to the claim is summarised in the opinion of Lord Hodge JSC (with which the other Justices agreed). He said:

Following the dismissal of Mr Nasir’s appeal, Zavarco sought the listing of its 2019 summary judgment application. After it had been listed, on 7 October 2025 Mr Nasir issued a counter application, seeking reverse summary judgment in his favour on grounds that the claim is time barred by virtue of the Limitation Act 1980.

As noted above, the claim was issued on 11 October 2018, after Mr Griffiths’ judgment had been handed down, giving declaratory relief to Zavarco as to its right to forfeit the 360 million unpaid shares, and Mr Nasir’s application for permission to appeal had been dismissed. The claim form and particulars of claim seek judgment in debt in the sum of €36,000,000, plus interest.

The particulars of claim plead at paragraphs 11 to 13:

Zavarco then relies on the terms of the Order made by Mr Griffiths, claiming that despite the Order and further demands the Call Amount remains unpaid. It relies also on a notice of intended forfeiture sent to the Defendant on 15 June 2016, pleading that, despite what is alleged to be a typographical error in the date specified for forfeiture (28, rather than 29, June 2016), the notice complied with article 73 of Zavarco’s articles.

In a draft defence and counterclaim, which has not been filed but was included in the hearing bundle, Mr Nasir contends that the claim in debt is time barred, and also that the pursuit by Zavarco of the claim constitutes the furtherance of a fraudulent scheme and should not be enforced on grounds of public policy. The draft document intimates an additional claim against two additional individual parties. For the purposes of Mr Nasir’s summary judgment application I am concerned only with the arguments on limitation.

I can take the discussion of the relevant articles from the judgment of Chief Master Marsh at [9] to [13]:

Mr Temmink also drew my attention to Article 76, whose wording substantiates the position that, absent continuing liability between company and (former) shareholder as expressly provided for in the articles, the shareholder is absolved from any liability to the company:

Mr Nasir relies on the decision of the Court of Appeal in related proceedings, Zavarco plc v Sidhu [2022] EWCA Civ 1040, in which Mr Temmink and Mr Lawrence also appeared for the parties. The defendant to those proceedings, Mr Sidhu, was the subscriber to the balance of the initial share capital in Zavarco. He was a signatory to the memorandum of association and subscribed for 840 million shares with a par value of €84 million, but had made no payment. I note that this claim was issued by Zavarco on 8 June 2017, just within six years of the date of the company’s incorporation.

Snowden LJ held that Mr Sidhu became liable to pay for the 840 million shares when he took them on incorporation, by virtue of section 584 of the Companies Act 2006. In doing so, the judge explained the nature of a subscriber’s undertaking to take shares in a public company, setting out the differences in the statutory scheme of the 2006 Act as compared to the Companies Act 1985.

In particular, section 8 of the 2006 Act provides for a more limited form of memorandum of association than in the earlier Companies Acts (see at [75]), in which the subscribers state that they agree to become members of the company and, in the case of a company that is to have a share capital, to take at least one share each. Section 10 then makes provision concerning the statement of capital and initial shareholdings, with information about the shares subscribed for by the subscribers to the memorandum, which was previously set out in the memorandum itself, to be provided to the registrar in the statement of capital and initial shareholdings (see [78] to [81]).

Snowden LJ then explained the effect of this statutory structure as follows:

Then, at [91] to [92]:

Mr Temmink accordingly submits that the cause of action relied on by the claimant is in contract, and that the relevant contractual obligation accrued on the date of subscription, 29 June 2011, when Mr Nasir signed the memorandum of association and agreed to pay €36 million for the shares he was to acquire in Zavarco and which he did acquire on registration.

Section 5 of the Limitation Act 1980 provides that, ‘An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued’. Likewise, and if it should apply instead, section 9 of the 1980 Act provides that ‘An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.’

Mr Nasir’s position is therefore that time started to run in 2011 and that, as this claim was not issued until 2018, the six-year period of limitation expired in 2017 such that the claim is time-barred and should be dismissed now.

Mr Lawrence accepted the claim is one in contract and that a six-year period of limitation applies, but he submitted that the period had not expired when the claim form was issued. Zavarco’s primary case in response is that the cause of action accrued only when Mr Nasir’s shares were forfeited by Zavarco after the 2017 declaratory judgment had been delivered. That forfeiture took place on 11 June 2018, after the court had declared that Zavarco was entitled to forfeit shares, it ‘having taken the steps required under the Articles of Association and Mr Nasir having failed to pay for the same’. Zavarco’s secondary position is that time does not begin to run until a demand is made, and that such demand was constituted by the call notice issued in 2015.

It is material in this context to bear in mind the definition of a cause of action. The Supreme Court on appeal in the present proceedings on the question of merger, referred to Diplock LJ’s classic definition of a “cause of action”:

Mr Temmink places particular reliance on judicial statements within the earlier stages of these proceedings, on the question of merger of the cause of action with a declaratory judgment. Even though the issue raised by the present application did not then fall to be decided, it was part of Mr Nasir’s case in relation to the merger issue that the cause of action pursued following forfeiture was the same cause of action that arose in relation to the contractual debt arising from subscription to the company’s memorandum. This was not the basis on which the merger issue was decided.

Chief Master Marsh said this in his judgment ([2019] EWHC 1837 (Ch) at [59] to [60]):

On first appeal, Birss J (as he was) then said this ([2020] Ch 663 at [33] to [34]), making clear that, given the basis on which he allowed the appeal, the point did not fall to be decided:

In the Court of Appeal, [2022] Ch 105 at [26], David Richards LJ said the following on the same point:

It was then accepted by Zavarco in the Supreme Court that, at least in the context of merger, the same cause of action was pursued in the present proceedings as in the declaratory relief proceedings leading to Mr Griffiths’ judgment in 2017. Lord Hodge said at [38], with reference to the definition of a cause of action derived from Letang (discussed above), that: ‘It is not disputed that the factual circumstances underpinning the earlier application for declaratory relief and those relied on in the current action are the same.’

Chief Master Marsh indicated when discussing the cause of action point that there was no authority to support the proposition in Palmer that, where the company’s articles provide for the shareholder to remain liable for all sums payable in respect of the forfeited shares at the date of forfeiture, this creates a new obligation as a debtor which can be enforced by an action. Mr Lawrence relied in the present application on Victorian authorities as supporting the proposition, which do not appear to have been cited to the Chief Master.

In Re Blakely Ordinance Company: Stocken’s Case (1868) LR 3 ChApp 412 at 415-416, Lord Cairns LJ said the following as to the right of a company to pursue a claim against a member for past calls following the forfeiture of shares. In doing so, he upheld Lord Romilly MR:

This analysis was later adopted by the Court of Appeal in Ladies Dress Association Ltd v Pulbrook [1900] 2 QB 376, and by Lawrence J in Re Darwen and Pearce [1927] 1 Ch 176 at 185-187, who commented that the relevant article provided in words and in substance for the creation of a new right in the company against their shareholders. In none of these cases was the court concerned with the question whether a cause of action had become time barred. I would note that, in the Ladies Dress Association case, Vaughan Williams LJ expressly declined to decide whether the old liability continues, or whether a new one was created, as it was immaterial to the claim before him (which concerned the question not whether the right of action survived forfeiture, but survived a subsequent liquidation of the company).

Mr Lawrence did not dispute the proposition that there is a six-year period of limitation in this case. He pointed out that an effect of section 33(2) of the Companies Act 2006, which provides that money payable by a member to the company under its constitution is a debt due to the company and (in England and Wales and Northern Ireland) is of the nature of an ordinary contract debt, is that such a liability is no longer treated as a liability under a specialty (which would entail a twelve-year limitation period under section 8(1) of the Limitation Act 1980). He also submitted that the effect of section 33 did not go beyond that, to entail the conclusion that there was no new cause of action created upon forfeiture.

The question is when that six-year period of limitation started to run.

Mr Lawrence presented his primary argument as the act of forfeiture creating a new cause of action, with time running effectively again from the date of forfeiture. His secondary argument was that, on a construction of Zavarco’s articles, the obligation to make payment of the agreed contribution to the share capital does not arise until a demand has been made. I consider that the secondary argument should be considered first, as it will be material to establish whether, as at the date of forfeiture, there remained outstanding an enforceable obligation on the part of Mr Nasir to make payment to Zavarco.

The general rule is that the right to payment under a contract for work or services to be provided arises as soon as the work is done, unless there is a term of the agreement to the contrary: Henry Boot Construction Ltd v Alstom Combined Cycles Ltd [2005] 1 WLR 3850 at [20], applying Coburn v Colledge [1897] 1 QB 702. As Andrews LJ said in Consulting Concepts International Inc v Consumer Protection Association (Saudi Arabia) [2023] 4 WLR 15 at [33] to [35], in a passage cited by Mr Temmink:

Andrews LJ then went on to refer to authority discussing when this position may be displaced:

As appears from Lord Neuberger MR’s example of a loan, the principle that time starts running for limitation as soon as the obligation to pay has arisen is of general application, and not restricted to contracts for work or services. Indeed, it was Mr Lawrence’s submission that, as payment was not made or demanded immediately, Zavarco made an implied loan to Mr Nasir, which loan required a demand before time could run at all. I have already noted that the obligation assumed by Mr Nasir to the company, arising under its constitution and being an obligation to pay money to the company, is an ordinary contract debt. Zavarco pleads as much in paragraph 10 of the particulars of claim.

Snowden LJ explained in Zavarco v Sidhu at [83] that the subscribers to a company’s memorandum become members of the company when the memorandum is registered, and from that time hold the number of shares specified in the statement of capital and initial shareholdings. No separate action on the part of the company is required for the subscriber to become a shareholder. He then said, at [92], that the obligation imposed by section 584 of the 2006 Act to pay up in cash any shares taken by a subscriber to the memorandum of a public company operates directly on an existing contractual obligation. He made no mention of any requirement for a call notice (or other demand) to be made in order to trigger the liability.

As the subscriber becomes a shareholder upon registration of the memorandum, and not upon payment for the shares, there would be no obvious reason why the obligation to make payment for the shares should be contingent upon the making of a demand by the company. In any event, Mr Lawrence does not contend that the subscriber’s liability to pay always arises only when a demand is made. He contends that is the effect of the articles in the present case, and that one must look at the relevant provisions in the articles and ascertain their proper construction.

Zavarco thus submits that a demand is required which, in this case, was satisfied by the making of a call notice in 2015 in accordance with article 69. It is therefore Zavarco’s case that Mr Nasir was under no obligation to pay until such a demand was made, and that the obligation had therefore not accrued (relying by analogy on N Joachimson v Swiss Bank Corporation [1921] 3 KB 110, where it was held to be necessarily implied that a bank was not liable to pay a customer the amount of their balance until payment was demanded).

One argument put forward by Mr Lawrence was that it follows from Mr Nasir’s case that, as he was liable to pay for his shares and that sum was left outstanding, an implied contract of loan arose, requiring a demand before time could run at all. In that case, he submits that section 6 of the Limitation Act 1980 applies, with the effect that the six-year period in section 5 does not start to run until a demand has been made. This point was not elaborated on in oral submissions, and Mr Temmink certainly did not accept that any implied loan had arisen. As matters stand, no arguable basis for holding that an implied loan arose has been articulated. The mere fact that a sum due is not paid and is not demanded for some time cannot suffice for a loan to arise without more. If it did, the position as set out by Lord Neuberger MR in the Henthorn case, that clear words are required to give a creditor control over when time starts running, would not be correct. There must be something in the factual circumstances to justify the implication of a loan beyond the fact that payment to the company by the subscriber has been neither made nor demanded. No such circumstances have been identified by Zavarco.

Similarly, Mr Lawrence submitted that the articles should be construed as requiring payment only when demanded. The only article to which I was referred which deals with the question of demands for payment is article 69. That article provides that a call notice may be made requiring a member to pay a specified sum which is payable in respect of shares, and sets out procedural requirements for doing so.

The effect of a call notice being served, and not complied with, is that the automatic consequences of non-compliance, in article 72, come into operation. One of those is that the subscriber’s right to receive dividends and to attend meetings of the company is suspended. Another is that the company may issue a notice of intended forfeiture in accordance with article 73 which, if not complied with, gives the company’s board the right under article 74 to forfeit the shares in respect of which the call notice was issued, and all payments due to the member in respect of those shares. A call notice is not required when payment for the shares is required on the occurrence of a particular event or on a particular date (article 71). In those circumstances, a call notice is treated as having been issued and the member is treated as having failed to comply with it once that event or date has passed with the shares remaining unpaid.

In other words, the purpose of a call notice is to suspend the member’s rights as a member until the notice has been complied with, and to facilitate the forfeiture of the relevant unpaid shares. It is not to bring about the obligation to pay, which the subscriber assumed on incorporation. The notice may be issued in the first instance (article 71 aside, it not applying here) only when the obligation to pay has not already been complied with. Accordingly, there is no ability to issue a call notice unless the member is already in breach of their obligation to pay for their shares. Article 69.1 makes plain that a call notice may be served only when in respect of a specified sum of money which is payable (my emphasis). The obligation to pay must arise before the call notice is issued. That obligation is not triggered by the call notice. That is consistent with Snowden LJ’s authoritative statement of how the member’s obligations arise.

Accordingly, I consider that on construction of the articles, the subscriber’s obligation to pay for their shares arises on the registration of the memorandum, and not when a demand is made. Time started to run, therefore, in 2011 and not in 2015. A demand made by the company at a later date (such as that made by the call notice), not being a payment or acknowledgment by the member, does not create a new cause of action or cause time to run afresh. The factual situation the existence of which entitles the company to obtain from the court a remedy against the subscriber does not depend on the making of a demand by the company and is thus in existence, such that time runs, as soon as the memorandum is registered.

For those reasons, the conclusion I have reached is that as at the date of issue of the current claim, more than six years had passed and the claim is prima facie time barred.

An issue may arise, although not on the facts of the present case, as to the ability of a company in such circumstances to issue a call notice more than six years after the date of the subscription agreement, i.e. after the contractual right to payment has become time barred. Furthermore, by the time Mr Griffiths made his order in November 2017 declaring that Zavarco had the right to forfeit Mr Nasir’s shares, it was more than six years since the right of action had accrued. The right to forfeit shares (which is all Mr Griffiths was concerned with) does, of course, depend upon a call notice having been validly issued and for it to remain unsatisfied; there is thus no requirement for the right to payment for the shares to continue to be enforceable at the date of forfeiture. The factual situation required to enforce the forfeiture of shares, and to entitle the company to a declaration that it is entitled to forfeit them, is thus different from that required to claim a money judgment. That is a distinction which was not a feature of the arguments on the merger issue and, in my view, the judicial comments about the identity of the cause of action in the two sets of proceedings pursued by Zavarco against Mr Nasir must be viewed accordingly.

Zavarco’s primary position is that the act of forfeiture caused a new period of limitation to begin upon that forfeiture. Mr Lawrence submits, on the basis of the authorities set out at [27] and [28] above that a new cause of action accrues in favour of the company upon forfeiture.

Assuming for the sake of argument that this submission is correct, it is important to bear in mind the default position, that upon forfeiture the member loses their shares but the company also loses its rights against the member. This is the position unless there is some provision in the articles to contrary effect.

The relevant provision in Zavarco’s articles is article 75.3.4. This provides that the person whose shares have been forfeited remains liable to the company ‘for all sums payable by that person under the Articles at the date of forfeiture in respect of those shares….in the same manner in all respects as if the shares had not been forfeited, and to satisfy all (if any) claims, demands and liabilities which the Company might have enforced in respect of the shares at the time of the forfeiture.’ The words at the end of the provision about satisfying demands etc which the Company might have enforced do not feature in the model articles for public companies, but the provision is otherwise taken directly from the model articles (article 60(3) in the current version).

Article 75.3.4 therefore refers to the continuation of the forfeiting member’s liability both for sums payable and for liabilities that the company might have enforced, as at the date of forfeiture. It appears to me for the reasons I have already explained that Mr Nasir’s liability to the company in accordance with the contractual obligation recognised in section 584 of the 2006 Act was by the date of forfeiture no longer enforceable as more than six years had passed since that cause of action accrued. The reference in the article to liabilities which the company might have enforced must be a reference to those which might have been enforced if the shares had not been forfeited (words found in the first part of the provision). The continuing liabilities for these purposes are therefore not liabilities which the company was entitled to enforce by forfeiture itself, but otherwise.

Furthermore, the reference to sums for which the person remains liable are sums which remain payable, in the same manner as if the shares had not been forfeited. Even though the expiry of a limitation period does not extinguish a debt, a person can be liable in civil proceedings for a debt in the same manner as if the shares had not been forfeited only if the debt could have been pursued in civil proceedings if the shares had not been forfeited. In Stocken’s Case, Lord Cairns LJ held that any provision in the articles for continuing liability must be strictly construed, and in Re Darwen and Pearce, Lawrence J stressed (at 186) that the forfeiting member was ‘not to be liable for anything which this clause does not say he is to be liable’. I consider that clear words would be required to render a forfeiting member liable for debts which had already become time barred.

It is for these reasons that I have concluded that the consequences of forfeiture do not include the liability of Mr Nasir to Zavarco for the sums claimed. Those claims were time barred immediately before forfeiture and thus on a construction of article 75.3.4, Mr Nasir did not retain liability for them (or acquire a new liability for them) following forfeiture. The article does not purport to resurrect liabilities which the company could not have enforced through civil proceedings if the shares had not been forfeited.

Accordingly, the question whether a fresh period of limitation starts to run on forfeiture, where a forfeiting member remains liable, does not arise. Without needing to decide the point, I will comment on the submissions I have received.

On this question, each side relies on seemingly contradictory judicial statements concerning the question whether a claim by a company against a shareholder is of a different nature once the shareholder’s shares have been forfeited. Mr Temmink cites the comments of Chief Master Marsh, seemingly concurred in by each of the appeal courts which considered the merger issue, who concluded that the cause of action pursued in this claim is the same as the cause of action pursued in the declaratory relief proceedings. That would point to a conclusion that time for bringing the claim ran from the date of subscription to the memorandum in 2011 or, possibly, from the date of the call notice in 2015 (although the Chief Master clearly assumed it was the latter date). Mr Lawrence cites Stocken’s Case, and supporting commentary, for the proposition that the obligation pursued by a company against its former shareholder after forfeiture of the relevant shareholding is a new obligation.

It would seem clear that the Chief Master did not have in mind arguments about limitation when commenting on the identity of causes of action in the two sets of proceedings. Birss J indicated that he saw the force of the analysis that the cause of action was the same but did not decide the point and, in the Court of Appeal, David Richards LJ accepted that the causes of action were the same.

In the Supreme Court on the merger issue Lord Hodge said at [33] that, ‘In his written case for the respondent Patrick Lawrence KC correctly describes the concept of a cause of action as protean and in the context of the doctrine of merger as being imprecise and ambiguous.’

Lord Hodge then commented at [36] on the potential for imprecision in the use of the term cause of action by reference to Australian authority, which explained that cause of action sometimes means a right and sometimes means the facts which support a right.

By the time of the hearing before the Supreme Court, at least, Zavarco accepted that the factual circumstances underpinning the earlier application for declaratory relief and the current claim were the same. David Richards LJ had said that the material facts which were common to both sets of proceedings were that Mr Nasir was liable to pay the €36 million for the shares which had been called up. The question of when that cause of action accrued was not an issue for consideration, and was not part of the agreed common underpinning. Limitation was not a matter which was in issue. The fact that a call notice had been issued before either claim was commenced was not part of the analysis of any of the appeal courts, but was an agreed part of the background to the claim. Mr Lawrence submitted that the court was then understandably not concerned with limitation and that it would therefore be misconceived to rely on David Richards LJ’s obiter comment about what facts were material. I see force in this submission.

I also see considerable force in Zavarco’s submission, relying on Stocken’s Case, that a company which can enforce a liability after forfeiture as it could have done immediately before the forfeiture has a right against the former shareholder in a different capacity. This might mean that a new period of limitation commences on forfeiture, when the forfeiting member becomes liable in that different capacity. I have already explained why I do not consider that this is so in relation to a debt that has already become time barred.

For the reasons I have set out above, I consider on the basis of the arguments I have heard that summary judgment could be granted to Mr Nasir on grounds of limitation. Mr Lawrence submitted that, in the event that was my conclusion, I should not enter reverse summary judgment at this juncture, but should require the defence formally to be filed, to give Zavarco an opportunity to file a factual response on its secondary argument, that in the circumstances of the case a demand was necessary in order to trigger Mr Nasir’s liability to pay, and that such demand did not come before the call notice, issued within six years of the commencement of these proceedings.

I am concerned that, even though earlier intimated in correspondence, Mr Nasir’s application for reverse summary judgment was issued only shortly before the hearing. As Mr Temmink was keen to stress, limitation is a substantive defence, which is why he did not need to raise it whilst contesting jurisdiction on the merger point in 2019 (on which I agree with him). Zavarco has had no formal opportunity to plead a response, if there is one, and only a short opportunity to explain its position. I am satisfied that, on the arguments I have considered, Mr Nasir is entitled to reverse summary judgment on limitation. While I do not consider that the defence should be filed, I am not quite persuaded that Zavarco should have no further opportunity to put forward a factual case that might be pleaded in reply on limitation (and/or, perhaps, by an amendment to the particulars of claim).

When I sent out this judgment in draft, I accordingly invited the parties to make submissions on whether Zavarco should, as a matter of procedure, be afforded this opportunity. I have already received submissions from Mr Temmink, but Zavarco’s solicitors have requested that they be given until 2 March 2026 for Zavarco’s submissions. I will allow Zavarco until then to make their submissions, and will not make an order until I have considered those submissions.

The hearing was initially listed to deal with an application for summary judgment issued by Zavarco. If reverse summary judgment is granted in favour of Mr Nasir, that application does not arise. I will indicate only briefly why (in any event) I shall dismiss it.

In the draft defence prepared on behalf of Mr Nasir (but not yet filed) it is pleaded in the alternative to the limitation defence that the incorporation of Zavarco and the pursuit of the present claim are part of an illegal purpose. Mr Nasir contends that Zavarco was incorporated as part of a scheme to allow Zavarco Berhad and/or VTel (Malaysian companies) to be (indirectly) listed on the Frankfurt Stock Exchange at a dishonest and fraudulently high valuation. He indicates that he will if necessary plead that he was encouraged by the proposed additional parties to take the subscriber shares in Zavarco (and, before that, shares in ZB, which was acquired by Zavarco) in order to lend further legitimacy to the scheme and thus further assist in the dishonest defrauding of third parties, including investors on the Frankfurt Stock Exchange and Bank Pembangunan Malasia Berhad (“BPMB”). As indicated above, Mr Nasir thus indicates that he will seek to argue that the court should refuse to allow the claim to proceed on grounds of public policy. He also intimates a counterclaim against Zavarco (and an intention to pursue a part 20 claim against the proposed additional parties) for damages for fraudulent misrepresentation, arguing that misrepresentations were deliberately made to him with the effect of procuring his subscription to the memorandum, and therefore becoming holder of the shares the payment for which these proceedings are concerned. Mr Nasir says that the counterclaim is for the amount claimed by Zavarco, thus saying there is circuity of action.

Mr Lawrence contended that these defences and proposed counterclaims are barred by issue estoppel arising from the declaratory relief proceedings, or that they were an abuse of process under the rule in Henderson v Henderson (1843) 3 Hare 100, and the court could determine on a summary judgment basis that they should not be permitted to proceed.

First, there can be an issue estoppel only if the issue in the later case is one which was expressly decided, or a necessary and fundamental part of or a step in the decision, in the earlier case: see Re Lehman Brothers plc [2024] 2 BCLC 396 at [97]. As Hildyard J said, ‘the fact that the approach of the court on an issue arising in one case may be determinative of a different issue in another case between the same parties does not, without more, establish an issue estoppel’. It was not expressly decided by Mr Griffiths in 2017 that the allegations of fraud which Mr Nasir has indicated he would wish to pursue were unproven. They were not then before the court, so neither was this a necessary step in the court’s decision that the shares were unpaid and that Zavarco was entitled to forfeit them; indeed, and as both counsel pointed out, it was Mr Nasir’s case then both that he was a member of the company and that he had paid for his shares by an agreed method other than cash. There is no issue estoppel.

The essential nature of a Henderson v Henderson abuse was explained thus by Lord Bingham of Cornhill, in Johnson v Gore-Wood & Co (a firm) [2000] 2 AC 1 at 31:

Mr Lawrence pointed out that issues about the valuation of the shares, and whether the Frankfurt Stock Exchange was given accurate information about the shares, was in issue in the 2016 proceedings. Mr Nasir had by then written to the Malaysian Anti-Corruption Commission, indicating that he had concerns among other things about irregularities in the way that VTel was being operated. The way that Zavarco became the ultimate owner of VTel is set out by Judge Jonathan Richards in Zavarco v Sidhu [2021] EWHC 1526 (Ch) at [9] onwards. It is Mr Nasir’s case that VTel was deliberately overvalued.

Accordingly, Mr Lawrence submitted that Mr Nasir was aware of the thrust of the fraud allegations when defending the 2016 proceedings. He had a choice to make; either to maintain that he had paid for his shares through a valid arrangement, or argue that there was a fraud. It is, he said, an abuse of process for the fraud allegations to be introduced now.

The arguments on Henderson v Henderson abuse cannot properly be determined at this stage as a matter of summary judgment. There is a significant amount of documentary evidence on the point, almost none of which I was taken to and which in any event and almost inevitably will not be the whole story. Mr Nasir contends that he has become aware of significant evidence relevant to his fraud allegations since the 2016 proceedings, both from the proceedings pursued by Zavarco against Mr Sidhu, which came to judgment at first instance only in 2021, and by reason of proceedings in Malaysia commenced in 2022 by BPMB, alleging fraud against (inter alia) Zavarco and the proposed additional parties. The allegations of fraud made by him now are significantly wider than those which it can be shown that he had in mind in 2017.

The broad merits-based assessment which the court is required to carry out in order to determine whether the raising of an issue now is abusive cannot be made on the basis of the impressionistic approach adopted by Zavarco. The fact that Mr Nasir had apparent awareness of some of the allegations now set out in the draft defence is not sufficient to lead to the determination that he was in 2017 able sufficiently to plead the defence of fraud. No attempt was made on behalf of Zavarco to compare the state of Mr Nasir’s apparent knowledge in 2017 with the allegations contained in the draft defence. It is also by no means self-evident that he was required at that stage to elect between his claim to have paid for his shares, and a claim that he was the victim of fraud which at that stage may have entailed a counterclaim seeking to set aside his agreement to purchase the shares. By the same token, I do not suggest that Zavarco’s position is unarguable; rather that it is not a matter for summary judgment.

I am satisfied on the basis of the arguments that have been made to me on behalf of both parties that Zavarco’s claim is time barred and that, in principle, reverse summary judgment should be entered. As I have indicated above, when I have heard from both parties I will determine whether Zavarco should as a matter of procedure (and as Mr Lawrence has requested) have a further opportunity to put forward a factual case as to why Zavarco’s cause of action did not accrue until a demand was made.