Euro-Asian Oil SA v Abilo (UK) Ltd & Ors

On 9 February 2015 Eder J ordered that judgment be entered for the claimant, Euro-Asian Oil SA (“Euro-Asian”), on a request filed under CPR 3.5 on the basis that the first defendant, Abilo UK Ltd (“Abilo”), and the third defendant, Mr Dan Igniska, had failed to comply with an order of Flaux J dated 7 November 2014. Eder J ordered that Abilo and Mr Igniska pay Euro-Asian $15,844,840 within 14 days and also pay interest and costs. The order of Flaux J, which was made by consent, provided that the time by which Abilo and Mr Igniska were to “provide standard disclosure and inspection” be extended to 4.00pm on 28 November 2014, and that, unless Abilo and Mr Igniska (together “the defendants”) complied with that order (and another requirement which is irrelevant for present purposes), “their Amended Defence shall be struck out automatically and judgment shall be entered against them upon [Euro-Asian’s] request”. On 24 February 2015 the defendants applied for an order under CPR 3.6 that the judgment be set aside, or alternatively for an order under CPR 3.9 granting relief from sanctions in respect of Eder J’s order. The application notice stated that “the ‘request for judgment’ of [Euro-Asian] was incorrect request. The party did comply with the order of Mr Justice Flaux issued 7 November 2014”.

Euro-Asian entered into four contracts with Abilo between November 2009 and September 2010 to buy oil by way of CIF delivery of cargoes “TBN” (to be notified by Abilo) at Constanza, Romania. The contracts each provided for a letter of credit and for payment against presentation of shipping documents or, where original shipping documents were not available, against an invoice and letter of indemnity in agreed form. Euro-Asian made payment under each contract, but claims that it received nothing under the fourth. It paid against a letter of indemnity, which, it says, made fraudulent misrepresentations for which Abilo and Mr Igniska are liable, in that it referred to a shipment of oil on the M/T “Ariadne” that had already been delivered under (albeit by way of misperformance of) the third contract. Similarly, a shipment of oil on the M/T “Histria Azura”, for which Euro-Asian was invoiced under the third contract, had been used to obtain payment under the second contract, and a shipment on the M/T “Nicos Tomasos”, invoiced under the second contract, had been used to obtain payment under the first contract. Euro-Asian was also invoiced under the first contract for a shipment on the M/T “Dominia” and made payment accordingly, but, it claims, it never received a corresponding delivery. Euro-Asian’s claim for the US$15,844,840 was for the payment under the fourth contract. (It also claims damages in relation to the first contract, but that is irrelevant for present purposes.) The claim is put in various ways: against Abilo as damages for breach of the contract, and in restitution or for money had and received; against both Abilo and Mr Igniska damages for fraud, for causing loss by unlawful means and for conspiracy; and against Mr Igniska for damages for inducing or procuring Abilo’s breaches of the fourth contract.

The defendants’ case is that the contracts between Euro-Asian and Abilo were in a chain of sales, whereby at the same time as Euro-Asian entered into the contracts with Abilo to buy oil, it also entered into contracts of sale with Real Oil Development Inc (“ROD”), a British Virgins Island company, and ROD entered into contracts of sale with SC DG Petrol SRL (“DGP”), a Romanian company. ROD and DGP were both, apparently, connected with Mr Igniska. The defendants say that it was never intended that consignments of oil would be physically delivered to Euro-Asian, but that the contracts were made in the context of arrangements whereby Euro-Asian would provide facilities to ROD or DGP, and that, when ROD was unable to pay Euro-Asian the prices as they fell due, it was agreed that the oil would be placed under holding certificates as security. The defendants say that thus Abilo complied with the contracts through agreed arrangements about how they should be performed.

Originally the second defendant to these proceedings was Credit Suisse AG (“Credit Suisse”), to whom Euro-Asian made payment under the fourth contract. Service of the claim form on Credit Suisse was declared invalid, Euro-Asian issued new proceedings in this court (claim 2013 folio 432), and at a case management conference (the “CMC”) on 16 May 2014 I ordered that they be managed and tried together with this action. At the same CMC I ordered that standard disclosure and inspection be made by 19 September 2014. Both cases are listed for trial for eight days from 16 November 2015.

Euro-Asian complains that before the CMC the defendants had been guilty of prevarication and delay in their disclosure obligations in that they referred to documents in their defence dated 27 November 2012 but, despite a request and eleven “chasing letters and emails over the subsequent six month period”, no documents were provided until an application made for “unless” order was made on 3 July 2013. However, Mr Tony Beswetherick, who represented Euro-Asian (and for whose clear submissions and assistance I am grateful), rightly did not place much reliance on this, and I need only say that this part of the background does not affect my conclusions.

At the time of the CMC the defendants were represented by Hill Dickinson LLP (“Hill Dickinson”). Before it they served a disclosure report dated 2 May 2014. They said that “email correspondence” was to be found on “the email systems of [the defendants]”, that copies of “certain emails” had already been provided to them, and a “wider email retrieval exercise is also being conducted”. Their systems and those of the defendants also held, by way of attachments to emails, further correspondence and other documents.

On 18 September 2014, the day before disclosure was ordered at the CMC, Stephenson Harwood LLP (“Stephenson Harwood”), Euro-Asian’s solicitors, asked Hill Dickinson to confirm that they would be in a position to exchange disclosure the next day. Hill Dickinson requested an extension for disclosure to 26 September 2014, and that was agreed. The defendants did not make disclosure, and on 29 September 2015 Hill Dickinson reported that they were unable to obtain instructions from their clients. On 8 October 2014 by order of Popplewell J Hill Dickinson ceased to act for the defendants, and they came off the court record. Since then the defendants have not been represented and Mr Igniska represented Abilo as well as himself on these applications.

On 3 October 2014 Euro-Asian had issued an application for an “unless order” in relation to disclosure and inspection, which was listed for hearing on 24 October 2014. On 23 October 2014 Mr Igniska asked for a 14 day adjournment in order to instruct new solicitors. Popplewell J adjourned the application to 7 November 2014, ordering the defendants to pay the costs. Mr Igniska informed Euro-Asian that they needed a further 15 to 20 days for disclosure. The parties then agreed to the consent order that Flaux J made.

On 28 November 2014 Mr Igniska delivered to Stephenson Harwood a list of documents and three folders of documents. The list was signed by a Mr Plamen Petkov and Mr Igniska. According to the evidence before me, Mr Petkov, a Romanian, replaced Mr Igniska as the sole director of Abilo in August 2013. He was said to make the disclosure statement as “Administrator Abilo (UK) Ltd”. Mr Igniska was described as “Sole shareholder of DG Petrol SRL”, and was also said to have “a limited power of attorney for Abilo (UK) Limited since 2 April 2004”. It was a joint list for Abilo and Mr Igniska. CPR 31.10(2) strictly requires that each party must make a list, but Euro-Asian takes no point on that.

The defendants’ list was criticised as making “contradictory and/or evasive statements as to the scope of their electronic disclosure” because it referred to a search of “memory disks” and electronic files created by Mr Igniska and DGP, but it also states that the search did not include “mail files” and “spreadsheet files”, and refers to a computer system as being no longer operational because of DGP’s insolvency: apparently DGP went into insolvency in Romania on 10 October 2011. I agree that the list is not clear about what searches were undertaken, but I am not persuaded that this much assists Euro-Asian to establish non-compliance with the order of Flaux J: as I understand it, the defendants meant that they had searched electronic records that were available, but had been unable to search other sources of electronic documents. This is consistent with the case that Mr Igniska presented to me.

In a letter dated 22 December 2014 from Stephenson Harwood, Euro-Asian took the position was that the defendants had “not made a good faith attempt to comply with … the order of Flaux J dated 7 November 2014 and the few documents that you have provided to date are merely illusory compliance with your disclosure obligations”, and that accordingly it was entitled to enter judgment under the order. While reserving their position in that regard, it requested that the defendants provide “by return” all documents in eight classes which it specified, reserving its right to enter judgment if documents to Stephenson Harwood’s satisfaction were not received by 5 January 2015. In a reply of 14 January 2015 Mr Igniska referred to financial problems that Abilo was facing and medical problems of its “owner”, and said that “If there are still questions [Abilo] is still to answer, definitely you will receive the answer, under the conditions such documents, correspondences a.s.o [sic] are still in company’s possession or control. And anyhow, the answers are well known to your client as Buyers of the cargoes with his own implications in operational/financial during the course of the contracts”. It is said on behalf of Euro-Asian that Mr Igniska did not specifically assert compliance, but I do not consider that a telling point, reading the response as a whole and given that it was written by a foreign businessman, not an English lawyer. On 27 January 2015 Euro-Asian filed a request for judgment.

Eder J’s order was deemed served on 13 February 2015, and any application to set it aside should have been made by 27 February 2015. The applications were apparently made on 4 March 2015. But there is some uncertainly about the timings, and in any case Euro-Asian does not take any point on this.

The defendants rely in support of their applications on a witness statement dated 24 February 2015 made by Mr Igniska and Mr Petkov, signed by them both under a statement that they believe that the facts stated in it are true; and on a further statement by Mr Igniska dated 15 May 2015, signed by him “as Third Defendant, and instructed by the First Defendant”, under a statement of its truth. Euro-Asian relies on a statement of Mr Guy Harper of Stephenson Harwood of 19 March 2015.

The defendants also rely on submissions made by Mr Igniska at the hearing before me. He is, I understand, a Romanian: he has limited English and spoke with a heavy accent. I am bound to say that, through no fault of his, I found it difficult to understand him, but I believe that I followed the thrust of his points. He did not seem to appreciate – or to keep in mind - that I was deciding only the applications about the default judgment, and not the merits of the underlying claims, and as a result I elicited his arguments on what seemed to me relevant more by way of questioning him than by receiving submissions. Inevitably in these circumstances Mr Igniska did not only make submissions on the evidence but went beyond the evidence. At the end of the hearing, Mr Beswetherick indicated that Euro-Asian might wish to respond in so far as he did so, but no further evidence has been filed.

Did the defendants fail in a material way to comply with the order of Flaux J? I refer to them failing “in a material way” because Euro-Asian does not contend that judgment was properly entered if the defendants made a genuine attempt to provide standard disclosure and inspection. Mr Beswetherick referred to the judgment of Tuckey LJ in Realkredit Danmark A/S v York Montague Ltd, 26 November 1998, (1998) WL 1042171, in which the court considered what constituted compliance with an order that “Unless the [Claimants] serve a List of Documents setting out in proper form all relevant documents that are or have been in their possession custody or power by [a specified time] … this action be dismissed …”. Tuckey LJ said that, since a list was served, prima facie there was compliance, and observed that “there is no reported case of an action being struck out as a result of a list being incomplete”. He thought the first instance judge wrong to accept an invitation to “embark on a wide-ranging critique of the list that had been served” and to conclude that it did not amount to compliance. The list, he said, “was not illusory”.

The terminology of compliance that is “illusory” and the test of good faith derive from the judgment of Devlin J in Reiss v Woolf, which was approved by the Court of Appeal, [1952] 2 QB 557 at pp. 559,560. In a case about an order for the service of further and better particulars and that “in default thereof” paragraphs of a defence be struck out, he said “… ‘default’ refers to default in the delivery of a document within the specified time. I do not, of course, mean that any document with writing on it will do. It must be a documents made in good faith and which can fairly be entitled ‘particulars’. It must not be illusory; … That is the test, in my judgment, and not, as the [claimant] contends, whether each demand for particular has been substantially met”.

Hence various tests are mentioned in the authorities: whether the prima facie compliant document is “illusory”, whether it can fairly bear its description, and whether it is made “in good faith”. The tests are different, and it is not clear to me whether the authorities regard them as reflecting alternative or cumulative requirements. For my part, I find it difficult to accept that a document provided in “good faith” will always be either necessary or sufficient to comply with an unless order, and in particular I would think that a litigant who deliberately did not disclose a document of marginal significance – perhaps because of some embarrassing content unrelated to the litigation - but otherwise made full and proper disclosure would not fail to comply with a typical “unless” order for disclosure. But I need not engage with this. The defendants served a document that was prima facie a disclosure list, and Euro-Asian seeks to displace that prima facie position. Mr Beswetherick relied on the observation of Tuckey LJ in the Realkredit case that, as had been conceded by counsel, “a court could infer lack of good faith where it was obvious from patent deficiencies in the list that it had been prepared in apparent but not real compliance with the obligation to give discovery”. He submitted that I should conclude from the deficiencies in the defendants’ list that they did not bona fide intend to disclose documents in their control, either, it was said, because they decided not to conduct a reasonable search (CPR 31.7 requires a party giving standard disclosure to “make a reasonable search” for disclosable documents) or because they decided to withhold from disclosure many documents that they knew should be included. Euro-Asian did not argue that disclosure was not made in good faith because the defendants did not disclose documents that had been in their control but were no longer. The complaint was that documents still in their control were not listed.

Given that the disclosure was made by unrepresented parties and the allegation is that they deliberately flouted their disclosure obligations, the first question is whether they understood what they were supposed to do. Here Mr Beswetherick drew it to my attention that in an email on 4 July 2014 Hill Dickinson wrote that they had advised their clients of their obligations as regards disclosure. I do not doubt that they had done so, but I do not think that, even with such advice, a layman, particularly maybe a foreigner with limited English, would necessarily have a clear or complete understanding of what is required, or assume that either Mr Igniska or anyone else acting for Abilo was therefore fully familiar with what Hill Dickinson had said in the disclosure report or in correspondence with Stephenson Harwood about what searches would be disclosed. (This does not, of course, indicate any criticism of Hill Dickinson.) However, it became apparent during the hearing that in general terms Mr Igniska had an intelligent grasp of the general nature of the disclosure obligation: his submissions reflected that he knew that he and Abilo were obliged to make available to Euro-Asian any documents that they had and would assist to decide the matters in dispute and relevant to the claims. He was also clearly aware in general terms of what had been said in the exchanges between solicitors: the defendants referred in their list to “keywords” that were to be searched under agreement reached between Stephenson Harwood and Hill Dickinson, and so, for example, as to what search was considered reasonable, it was said:

“The checks in hardcopies documents were limited due to bankruptcy status of [DGP]. Emails, correspondence and documents were checked mainly for the period under discussion, extended whenever considered necessary for similar operations, considered relevant for the dispute, based on then pleads. The searches were made based on the keywords agreed, plus additional ones that were considered relevant for the dispute”.

I am therefore satisfied that for the most part any failure on the part of the defendants to make disclosure cannot be explained or excused by them not understanding what they were obliged to do. However, as I shall explain, this might be relevant to Euro-Asian’s criticism about one category of documents, documents about the defendants’ dealing with Glencore and SET Select Energy (“Select Energy”) who apparently sold the cargoes to Abilo.

What documents were disclosed by the defendants? According to Euro-Asian’s calculations, the 143 documents that the defendants listed comprised some 72 documents by way of communications with Euro-Asian and 16 documents by way of communications with Credit Suisse. Euro-Asian pointed out that they disclosed many more communications with the defendants, 222 documents, and in the related action Credit Suisse has disclosed 192 communications with the defendants. Thus, on the face of it the defendants’ disclosure of such documents is incomplete. Moreover, the defendants disclosed only about 55 other documents, and 46 of these concern other cargoes and are said by Euro-Asian to be irrelevant to the issues in the proceedings: presumably this is why the disclosure list referred to disclosure being expanded to “similar operations”. Euro-Asian described these documents as being included only by way of “padding”: if that is an allegation that they were included simply to disguise or to distract from deficiencies in the list, I am not persuaded of it. When this was suggested in correspondence, Mr Igniska replied that they were disclosed “to remind to [Euro-Asian] a lot of happenings” and to help him on “forgetfulness”. It suffices to say that to my mind there is no sufficient reason to infer such Machiavellian scheming by way of disclosure of irrelevant documents. But the more important implication of Euro-Asian’s analysis of the 143 documents is that the defendants have disclosed only nine documents relating to the four contracts other than communications with Euro-Asian or Credit Suisse, which had already been disclosed by other parties.

Euro-Asian identified six categories of documents which have not and, it says, should have been disclosed, and rely on them, in particular, to argue that the defendants decided not to make proper disclosure. They are documents relating to:

Before coming to what the defendants say about these categories of documents, I mention four more general points that they made.

The defendants’ other explanations for their disclosure are of two kinds: explanations about the categories of documents which Euro-Asian identified, and explanations of their difficulties in making disclosure of documents that are or were held by (i) DGP; (ii) on Mr Igniska’s computers; (iii) ex-employees; (iv) former directors; or (v) Hill Dickinson.

Euro-Asian says that documents held by DGP were under the control of the defendants and so disclosable. It points out that in an email of 15 May 2014 Hill Dickinson said that DGP’s employees acted as the defendants’ “agent/representative”, and that documents were stored at DGP’s offices; and that in an email of 24 October 2014 Mr Igniska said that “whatever in my power … in DG Petrol hands (archive) for sure are considered obligations that will be fulfilled”. It does not follow, of course, that DGP did not hold other documents, or that the defendants are or ever were entitled to documents held by DGP, or have or had control of them.

However it is apparently not disputed that some documents held by DGP would be disclosable by the defendants, and indeed Mr Igniska told me that the documents that were disclosed came from “the archive of [D G Petrol”. But they say that they are simply unable to obtain access to, or to disclose, all documents held by DGP, apparently because of DGP’s insolvency or events consequential thereon or associated therewith. They say that documents are “archived” with DGP: in the disclosure list they explained (when referring to documents that were no longer in their control) “the archived are placed with [DGP] and is much deteriorated due to consecutive and continuously researches of fiscal/custom institutions in Romania”. They stated that “computer system is no longer operational for the period in dispute as [DGP] is under bankruptcy procedure”. With regard to hardcopy documents, they said that “The checks in hardcopies documents were limited due to bankruptcy status of [DGP] that was the end user of the product under discussions”.

What was said in the list about hard copy documents is consistent with what Stephenson Harwood had been told by Hill Dickinson, who said in an email of 14 May 2014 that no hard copy documents were mentioned in the disclosure report because “all documents have been scanned and emailed to us”. They referred to “original copies” being “stored at DGP Petrol’s office in Romania” and said that “a thorough search of those documents will be conducted”. They wrote in an email of 15 May 2014 “We confirm that DG Petrol’s office is the only place where hardcopy documents are stored” and explained that DGP was in liquidation and so “the documents are only temporarily stored at this location”. However, Mr Beswetherick submitted that because Hill Dickinson were sent scanned copies of the hardcopy documents, they should have been disclosed. This depends on whether the defendants have access to documents held by Hill Dickinson: see paragraph 32below.

The explanation about electronic documents is to be considered along with the defendants’ explanation about disclosure of documents that might have been on computers that Mr Igniska has. Hill Dickinson had said that “at the relevant time” he had used two email accounts, and agreed that they would be searched for relevant documents. Mr Igniska told me that he now has only one computer, a laptop that he had with him in court during the hearing, and that he had had it only for some three months, and that he had acquired his previous computer in about October 2011, when DGP became insolvent. However, he said at the hearing computers that he used at the time that Abilo was dealing with Euro-Asian were handed over to DGP when administrators were appointed, and the defendants no longer have access to them. Thus, according to Mr Igniska, he and Abilo do not have control of electronic documents on computers that he used at the relevant time. Apparently Abilo did not itself have systems on which electronic communications were routinely stored: as it was put in Mr Petkov’s letter of 2 February 2015, Abilo “has used limited IT devices that didn’t save messages”, and that Abilo “has used a limited capacity/performance IT devices that didn’t save messages but only a limited number a day. … and that operations was considered as ‘closed business’ with no need to kept useless documents in file”. Euro-Asian disputed this, pointing out that the defendants had not previously mentioned that because of limitations of this kind they had not kept documents, but, as I understand, it, this became significant only in face of the difficulties in accessing documents held by DGP and Hill Dickinson.

The disclosure list states that “ex-employees … are no longer with the company since 2011”, and in their evidence the defendants refer specifically to a Mr Razvan Bucur being on the payroll until 14 September 2010 and a Mrs Adela Mihalcea being on the payroll until 14 January 2011. I understand that this is given as the defendants’ explanation as to why they have not been able to disclose any documents that such “ex-employees” might have kept.

The defendants also explained the position about any documents in the control of Ms Nathalia Margot and Ms Anna Gago, who were the directors of Abilo at the relevant time and until 2011 (and so until after the dispute behind this litigation had arisen). They apparently worked for Edelweiss Trust & Corporate Services SA (“Edelweiss”), a corporate administration company of Geneva. According to Hill Dickinson’s email of 14 May 2014, they were really nominal directors: they are described as being “at the material time directors for a significant number of companies”, who acted only “on the specific instructions of Mr Igniska”. They had told Hill Dickinson that they no longer had any “information relevant to Abilo”, that they had not had separate email accounts for each of their appointments, and that Mr Igniska should have been copied into all relevant correspondence. Nevertheless, they agreed to a search of their documents, and that Mr Igniska might “attend their offices and copy/take any relevant documents”.

According to the defendants’ statement of 24 February 2015, they had been told by Edelweiss that, when moving offices and changing their IT systems, over 40,000 exchanges were lost. They particularly referred to dealings with Credit Suisse, but I do not understand that these were the only documents said to have been lost: these, I think, were specifically mentioned because communications with Credit Suisse had become the focus of exchanges between the defendants and Stephenson Harwood in early February 2015. (On 2 February 2015 Mr Petkov had explained that Ms Gago and Ms Margot “transferred invoices and letters of credit opening forms to Credit Suisse”, but Stephenson Harwood replied that the defendants were not excused from disclosure simply because Credit Suisse may have disclosed the copies of documents.)

Euro-Asian submitted that I should reject this evidence as incredible: it argued that there is no corroborative evidence from the previous directors (or Edelweiss), that a “professional services firm” would not have lost documents in this way, and that Hill Dickinson did not refer to this problem. I do not find these points persuasive; apparently Euro-Asian, with their greater resources, did not seek to verify whether Edelweiss had had difficulties of this kind; it is not unprecedented in my experience for professional service providers to lose documents (whether electronic or hard copies); and, as I understand the defendants’ evidence, they were first told of Edelweiss’ problems after the exchanges in which Hill Dickinson were involved. There is no sufficient reason to reject the defendants’ evidence as untruthful.

Mr Igniska’s evidence is that Hill Dickinson have documents that they will not make available to the defendants. This is confirmed by emails of 24 February 2014 that he exhibited, in which Hill Dickinson refused to provide a “full copy of all files” because fees were unpaid, adding that “this is of little consequence as you will have an electronic copy of all significant documents and correspondence”. Euro-Asian relies on this to submit that the defendants should therefore have disclosed the documents, but I am not persuaded: it might well be that Hill Dickinson so replied because they supposed that Mr Igniska had access to DGP’s documents. Hill Dickinson had explained in their emails of 14 and 15 May 2014 that they had on their systems electronic versions of hard-copy documents stored with DGP and that hardcopy documents were not stored elsewhere.

How far does this evidence answer Euro-Asian’s contentions about the six categories of documents? As I have said, I do not reject the defendants’ explanation about the documents of former directors, and there is no reason to doubt what they say about former employees. I should say a little more about the other four categories.

Communications with Glencore and Select Energy that reflect whether and when Abilo bought and took delivery of the cargoes are certainly relevant and would be disclosable. Hill Dickinson’s proposed “key words” for electronic searches included email addresses of the sellers, and no communications with those addresses have been disclosed. In his letter of 2 February 2015 Mr Petkov stated first that Abilo could not “interfere between our ‘headseller’ and any other third party they are dealing with”: if he meant that the sellers would not provide their own documents for Abilo to disclose, it is beside the point: Euro-Asian was not complaining that Abilo had not obtained documents from its sellers, but that it had not disclosed its own documents about the purchases. Mr Petkov also said of Abilo’s documents of this kind that “there are standard terms that are amended with every single parcel, for pricing formulas and pricing”, and that, having bought on the standard terms, it sold on to Euro-Asian “as back-to-back deal”. He also referred to documents that were in Euro-Asian’s possession. I do not find the letter easy to understand, but it appears that Mr Petkov was saying that Abilo knew the terms of the purchases from Glencore and Select Energy because they were on the same terms as the contracts that it made with Abilo, and Euro-Asian had those terms themselves. The defendants’ case on this point is supplemented by Mr Igniska’s evidence in his witness statement of 15 May 2015 that all communication before the contracts were concluded were oral.

This is not a satisfactory explanation for not disclosing any communications or other documents comprising or recording the contract and its delivery. If Mr Petkov’s letter reflects a concern about disclosing the price or pricing formulae of Abilo’s purchases, there might be an argument for redacting it, but there is no proper reason for simply not disclosing documents bearing on whether Abilo really bought (and paid for) the cargoes and took delivery or otherwise were in a position to make arrangements for their delivery to Constanza. It is possible that the defendants would say that they are not in a position to disclose such documents because they are held by DGP’s administrators and they do not have access to them, but they have not stated this in clear terms.

As for communications with the vessels or vessels’ agents, in their witness statement of 24 February 2015 the defendants denied having such communications, Abilo being only a link in the chain of sales. Euro-Asian submits that this is unconvincing because the defendants have disclosed communications with vessels among the documents about other cargoes. I am not persuaded of that: I have seen nothing inconsistent with the general pattern of communications with vessels being as the defendants describe. Indeed the message from the M/T “Ariadne” that the defendants disclosed was forwarded to Mr Igniska, by DGP, perhaps suggesting that the vessel was not expected to communicate with him directly.

With regard to communications with the oil terminal, the defendants say that Abilo had no dealings with the terminal and that communications were with DGP. Euro-Asian seeks to refute this because the defendants have disclosed (it is submitted “apparently inadvertently”) a fax message to the terminal dated 12 October 2010, which describes Abilo as the supplier to ROD “For further transfer to [DGP]”. It related to a cargo on the “M/T Nicos Tomasos”, but not, as Mr Igniska said, that with which this case is concerned: the shipment was received from Kronos Worldwide Ltd, who were not involved with any of the four shipments. But this does not answer Euro-Asian’s point: the document is headed “fax message no 162” and Euro-Asian invites me to infer that “this suggests that there are many more”. I cannot accept that I should do so: there is no evidence about how Abilo numbered faxes, and whether this indicates that there were more relevant faxes. Certainly Mr Harper made this point in his witness statement of 19 March 2015 and not answered by Mr Igniska in his statement of 15 May 2015, but it is understandable that a litigant in person might pass over a single sentence in Mr Harper’s long statement.

Euro-Asian relies on a further document to submit that Abilo had dealings with the terminal, an undated communication addressed to Euro-Asian and Abilo about “in-tank transfer” which refers to oil from the M/T “Nicos Tomasos” stored “according to instructions received on 04^th March 2010, from Abilo (UK) Ltd”. From what I understand of the relationship between Abilo, ROD and DGP, it seems perfectly possible that instructions (assuming them to have been written and not oral) were given by DGP on Abilo’s behalf. Euro-Asian further relies on a Tank Transfer Certificate of 5 March 2010, which refers to “instructions received on 04^th of March 2010, from Abilo (UK) Ltd”, and relies on it to refute the defendants’ position that Abilo did not deal with the terminal. Given the picture given by the defendants of Abilo’s relationship with DGP, I do not consider that this, or any of the various other documents to which Euro-Asian refers, necessarily belies the defendants.

Communications and dealings with DGP: Euro-Asian has itself disclosed a document that appears on its face to be a sale contract dated 9 November 2009 whereby Abilo sold and DGP bought the cargo on the M/T “Dominia”, and submits that there is no proper reason that documents of this kind were not disclosed by the defendants. In this context the defendants refer in the statement of 24 February 2015 to staff leaving DGP’s employ, but this does not really explain why a document of this sort was not disclosed. It might be that this document is no longer available because it is, in some way, retained by DGP in relation to the insolvency and claims under it, but I accept Euro-Asian’s submission that the explanation about documents of this kind is incomplete and unsatisfactory.

I have, I fear, been drawn into the sort of “wide-ranging critique” of the defendants’ list that Tuckey LJ apparently considered unnecessary in Realkredit case, but was, to my mind, necessary here in order to engage with Euro-Asian’s case that bad faith is demonstrated by deficiencies in the list itself, together with explanations for the deficiencies said to be incredible and untruthful. But I must also stand back and consider the larger picture to consider whether bad faith is established.

The defendants have certainly disclosed many fewer documents than they would be expected to have, both by way of internal records and by way of communications with third parties and by way of other parties to the litigation, Euro-Asian and Credit Suisse. I consider this so despite the difficulties in listing documents that that the defendants have explained. Their explanations notwithstanding, I find it particularly troubling that they have not disclosed contractual documents for the purchase of cargoes from Glencore and Select Energy or about dealings with DGP. However, in the end I am not persuaded that I should reject as untruthful the defendants’ accounts of their problems in listing documents: indeed, the more I explored them with Mr Igniska during the hearing, the more coherent the account appeared to me. At first blush there seemed to be inconsistencies in explanations given by the defendants for disclosing so few documents, but they are largely explicable by their awkward English and their obvious difficulties in expressing themselves in the language. There may be well be documents omitted from the list; with regard to the purchase of the oil, it might be that the defendants have not fully appreciated the extent of disclosure obligations. However, Euro-Asian has not satisfied me that the defendants drew up an “illusory” list, or that they served it in bad faith, and therefore Euro-Asian has not met the test that it set itself to justify the request to enter judgment. After all, the court requires compelling evidence before finding bad faith in that, while applying the civil standard of proof, it generally supposes that people probably behave honestly (see Re H (minors), [1996] AC 563); and it will, I think, be more cautious when, as here, there is no cross-examination or other oral evidence.

The judgments must therefore be set aside under CPR 3.6. I have thus far considered the position without distinguishing between the two defendants. Although there might be room for argument on the literal wording of Flaux J’s order, Mr Beswetherick did not dispute that in principle their positions are to be considered separately. It might in other circumstances to have been necessary to examine what documents might be in Mr Igniska’s control and what in Abilo’s control, an enquiry that would not be easy in view of some of what Mr Igniska told me. But in view of my conclusion about the position of the defendants together, I need not undertake this enquiry and say no more about it.

It follows that the order of Eder J and the judgments entered are set aside. In these circumstances, the application for relief from sanctions is unnecessary. However, given Euro-Asian’s argument, it would have fallen for consideration only if the defendants had acted in bad faith and sought to withhold documents by deliberately serving a misleading list. Had this been established, and given that this conduct was neither acknowledged nor explained, I would have refused relief from sanctions if I had found that the defendants had not complied with Flaux J’s order.