Midtown Acquisitions LP v Essar Global Fund Ltd

This is the reserved judgment of the court on an application by the claimant, Midtown Acquisitions LP (“Midtown”) dated 16 April 2018 for summary judgment pursuant to CPR 24.2.

By its claim the claimant is seeking payment of a debt created by a judgment (the “ECA Judgment”) in its favour of the Supreme Court of the State of New York, County of New York dated as of 11 November 2016 in the amount of US$409,220,240.51 together with interest.

By an application dated 16 August 2018 the defendant seeks a case management stay of execution pending the determination of the defendant’s challenges to the ECA Judgment in the New York courts.

The claimant is a limited partnership incorporated under the laws of the State of New York. The defendant is a company incorporated under the laws of the Cayman Islands.

By a credit agreement dated 30 September 2014 the claimant together with other lenders agreed to provide a loan facility up to a value of US$450 million to Essar Steel Minnesota LLC (“Essar Minnesota”). Pursuant to a guarantee of the same date, the defendant guaranteed the obligations of Essar Minnesota under the credit agreement with a limit of US$200 million. By an equity contribution agreement (the “ECA”) of the same date the defendant agreed to provide cash common equity contributions to Essar Minnesota. The ECA is governed by the law of the State of New York.

On 18 March 2016 the defendant entered into two affidavits of confession of judgment: one (the “Guarantee Confession”) related to the guarantee and was in an amount of US$201,575,000 and the other (the “ECA Confession”) in relation to the ECA was in the amount of US$415,378,356 less any amount paid to the lenders under the guarantee.

Also on 18 March 2016 the defendant entered into a term sheet (the “Term Sheet”) with the agent for the lenders which agreed a settlement amount in relation to the guarantee and ECA and a payment plan for repayment of the settlement amount.

On 25 August 2016 the Supreme Court of the State of New York, County of New York (the “NY Court”) entered judgment on the basis of the Guarantee Confession for the claimant and the other lenders for the total sum of US$171,769,169 (the “Guarantee Judgment”).

On 9 November 2016 the NY Court entered judgment for the claimant alone pursuant to the ECA Confession in the sum of US$375,378,356 together with interest and costs amounting to a total figure of US$409,220,241.51.

In November/December 2016 the defendant filed motions to vacate the Guarantee Judgment.

On 17 March 2017 the claimant was granted summary judgment in the High Court by Teare J in relation to its application for recognition and enforcement of the Guarantee Judgment ([2017] 1 WLR 3083).

The motion to vacate the Guarantee Judgment was denied in May 2017. On 22 May 2017 the defendant filed a notice of appeal against that order (the “Guarantee Appeal”).

On 12 July 2017 the defendant commenced a Plenary Action in the NY Court to challenge the ECA Judgment (the “Plenary Action”).

On 18 September 2017 the NY Court entered a stipulation and order (the “Stay Order”) providing that proceedings in the Plenary Action were stayed pending the determination of the Related Appeal (which was defined as, and is accepted to be a reference to, the Guarantee Appeal). The scope of that Stay Order is disputed and is discussed below.

The Guarantee Appeal was rejected by order of 26 June 2018. On 19 July 2018 the defendant filed a notice of motion to re-argue the Guarantee Appeal and that motion remains pending. The defendant contends that, upon re-argument, the appellate court should find that the filing of the Guarantee Confession was conditional on the defendant’s default under the Term Sheet.

For the claimant I was referred in submissions to the following witness statements in support of the claimant’s case:

For the defendant I was referred in submissions to the following witness statements in support of the defendant’s case:

CPR Part 24.2 provides:

The court may give summary judgment against a claimant or defendant on the whole or part of a claim or on a particular issue if –

(a)

it considers that –

…

(ii)

that defendant has no real prospect of successfully defending the claim or issue; and

(b)

there is no other compelling reason why the case or issue should be disposed of at a trial.”

I was referred to the summary of the relevant principles on a summary judgment application set out by Simon J in JSC VTB Bank v Skurikhin [2014] EWHC 271 (Comm) at [15] which so far as relevant to the issues are as follows:

“(1)

The Court must consider whether the defendant has a ‘realistic’ as opposed to a ‘fanciful’ prospect of success, see Swain v Hillman [2001] 2 All ER 91 , 92. A claim is ‘fanciful’ if it is entirely without substance, see Lord Hope in Three Rivers District Council v Bank of England [2001] UKHL 16 at [95].

(2)

A ‘realistic’ prospect of success is one that carries some degree of conviction and not one that is merely arguable, see ED & F Man Liquid Products v. Patel [2003] EWCA Civ 472 .

(3)

The court must avoid conducting a ‘mini-trial’ without disclosure and oral evidence: Swain v Hillman (above) at p.95. As Lord Hope observed in the Three Rivers case, the object of the rule is to deal with cases that are not fit for trial at all.

(4)

This does not mean that the Court must take everything that a party says in his witness statement at face value and without analysis. In some cases it may be clear that there is no real substance in factual assertions which are made, particularly if they are contradicted by contemporaneous documents, see ED & F Man Liquid Products v. Patel (above) at [10]. Contemporary activity or lack of activity may similarly cast doubt on the substance of factual assertions.

(5)

However, the Court should avoid being drawn into an attempt to resolve those conflicts of fact which are normally resolved by a trial process, see Doncaster Pharmaceuticals Group Ltd v. Bolton Pharmaceutical Co 100 Ltd [2006] EWCA Civ 661 , Mummery LJ at [17].

(6)

In reaching its conclusion, the court must take into account not only the evidence actually placed before it on the application for summary judgment, but the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond ( No. 5) [2001] EWCA Civ 550 , [19].

(7)

…

(8)

Some disputes on the law or the construction of a document are suitable for summary determination, since (if it is bad in law) the sooner it is determined the better, see the Easyair case. On the other hand the Court should heed the warning of Lord Collins in AK Investment CJSC v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804 at [84] that it may not be appropriate to decide difficult questions of law on an interlocutory application where the facts may determine how those legal issues will present themselves for determination and/or the legal issues are in an area that requires detailed argument and mature consideration, see also at [116].

(9)

The overall burden of proof remains on the claimant,

…to establish, if it can, the negative proposition that the defendant has no real prospect of success (in the sense mentioned above) and that there is no other reason for a trial, see Henderson J in Apovodedo v Collins [2008] EWHC 775 (Ch), at [32].

(10)

So far as Part 24.2(b) is concerned, there will be a compelling reason for trial where ‘there are circumstances that ought to be investigated’, see Miles v Bull [1969] 1 QB 258 at 266A. In that case Megarry J was satisfied that there were reasons for scrutinising what appeared on its face to be a legitimate transaction; see also Global Marine Drillships Limited v Landmark Solicitors LLP [2011] EWHC 2685 (Ch), Henderson J at [55]-[56].”

The principles for enforcement of a foreign judgment were largely agreed between the parties. It must be a judgment:

The test of whether a judgment is final is determined by the treatment of the judgment by the foreign tribunal as a res judicata (Dicey at 14 – 023). A foreign judgment may be final and conclusive even though it is subject to an appeal.

In this case the defendant filed a notice of appeal of the ECA Judgment in November 2016 but did not take any steps to prosecute that appeal which has in effect now fallen away as the New York rules require that appeals be perfected within nine months (paragraph 10 of the first witness statement of Mr Rapport). It is the claimant’s case that the ECA Judgment is final and conclusive notwithstanding the Plenary Action: Mr Rapport (paragraph 14 – 16 of his witness statement) states that in New York law, a final judgment such as the ECA Judgment remains valid and fully enforceable, even if subject to challenge by appeal or otherwise, unless a court has stayed enforcement or the defendant has posted a bond. Mr Rapport states that under New York law a plenary action does not operate as a stay in the absence of a court order or a bond. He notes that it was open to the defendant to seek such a stay or post a bond but the defendant did not seek such an order in relation to the ECA Judgment (although it did seek a stay of the Guarantee Judgment but it was denied by the courts).

Mr Meister in his evidence, accepts that commencing the Plenary Action does not, without more, operate as a stay on enforcement (paragraph 13 of his first witness statement); however Mr Meister asserts that the issue is whether in this case the Stay Order is an order staying enforcement.

Where it is established that a foreign judgment is enforceable, the only available defences to enforcement are that:

The matters raised by the defendant as reasons why the court should not give summary judgment (focusing on those matters which were pursued before me at the hearing) can be categorised as follows:

In the alternative, if the court finds against the defendant on the summary judgment application, the defendant seeks a stay on enforcement.

Counsel for the defendant in his oral submissions focused on two potential defences, public policy and abuse of process. The defendant also accepted that even if the court found that the defendant did not have a realistic prospect of defending the claim for enforcement of the ECA Judgment, there was sufficient for the court to conclude that there was another compelling reason to refuse summary judgment namely that there were “circumstances that ought to be investigated”.

Counsel for the defendant submitted that;

Counsel for the claimant submitted that:

In my view an order of this court recognising the ECA Judgment does not “require” double recovery such that the court should decline to recognise the judgment on the grounds of public policy. The claimant has obtained separate judgments in respect of the guarantee and the ECA in respect of different underlying debts, albeit that they could be said to “relate” to the same commercial transaction. Further even if the judgments were in respect of the same liability, the defendant has paid nothing under the Guarantee Judgment and therefore as things stand, the enforcement would not lead to double recovery.

I do not accept that there is a need to go behind the ECA Judgment to resolve the issue of double recovery. A foreign judgment will be enforced except in the limited circumstances discussed above. The defendant accepts that the issue of double recovery is an issue of New York law. If the defendant wished to challenge the judgments by reference to the issue of double recovery, that is a matter which it should have raised before the New York courts.

The defendant cannot seek to challenge the enforceability of the judgments by reference to the procedure in the New York courts for entering judgment upon an affidavit of confession. The decision of Teare J considered whether such a judgment was enforceable. The fact that it is inherent in the nature of that process that the New York court did not need to consider the relationship between the ECA Confession and the Guarantee Confession does not amount to a ground on which the English court will refuse enforcement of the ECA Judgment. There is nothing contrary to English public policy in giving effect to a judgment which has been obtained following an acceptance by the debtor of his liabilities: although dealing with a different aspect of the procedure, Teare J rejected an argument that the circumstances in which the claimant obtained its judgment by confession were contrary to natural justice, holding at [68] that:

“in circumstances where the judgment is obtained pursuant to a long-standing procedure in a sophisticated jurisdiction such as that of the state of New York and is expressly set out in New York procedural law it would be a bold step for this court to say that that procedure is contrary to natural justice.”

In my view a similar observation can be made in relation to the challenge advanced before this court that because the New York court has not needed to consider the relationship between the two judgments, this court should refuse to enforce the judgment or should delay enforcement and await scrutiny by the New York courts.

Counsel for the defendant accepted that the relationship between the ECA Confession and Guarantee Confession “ideally needs to be examined” by a New York court. It would appear that the relationship has not been subject to scrutiny by the New York courts at least in part because the defendant failed to pursue its appeal against the ECA Judgment. In my view the failure to pursue that appeal must cast doubt on the substance of the submissions before this court. In the absence of any appeal of the ECA Judgment, the ECA Judgment is enforceable. The matters now raised could have been challenged at the outset by pursuing an appeal in New York and do not amount to circumstances “that ought to be investigated” by the English courts such as to amount to a compelling reason for trial within the meaning of CPR 24.2.

It is suggested for the claimant, and it appeared to be accepted by the defendant in correspondence (letter of 24 August 2018 from RPC to BSF), that this court could make a declaration in relation to the extent of the double recovery and the relationship between the two judgments. The evidence of Mr Rapport (paragraph 39 and 40 of his third witness statement) is that it is his understanding of the ECA Confession that if any amounts were received under the Guarantee Judgment, the ECA Judgment can be enforced only up to the amount of US$415.4 million less such amounts received.

Although the ECA Confession was in terms that it was for the amount of the ECA liabilities “less any amount paid to the Lenders under the Guaranty”, the ECA Judgment is for a specified amount (having given credit for an amount which had actually been paid). I am not persuaded that this court needs to make an order dealing with any deduction for possible future recovery under the Guarantee Judgment. In my view this would involve this court looking behind the ECA Judgment: the position is that the claimant has obtained a judgment for the sum stated in the ECA Judgment and in my view is entitled to have an order which recognises that judgment. The enforcement of the ECA Judgment by this court will not require double recovery and any issue as to any “overlap” which may exist if both judgments are enforced in full is a matter for the New York courts. If I am wrong on that and there is a public policy consideration, then the claimant has accepted has that any amount due to it in connection with the ECA Judgment will be reduced by sums actually received by the claimant under the Guarantee (letter of 23 August 2018 from BSF to RPC) and that appears to reflect the position as a matter of New York law.

Counsel for the defendant submitted that the “full implications of Midtown’s conduct” are still “being worked out”. As noted above, in reaching its conclusion, the court must take into account not only the evidence actually placed before it on the application for summary judgment, but the evidence that can reasonably be expected to be available at trial. However in my view the issues raised do not amount to a defence with any substance: no positive allegations of fraud or dishonesty are pleaded to support the submissions of “conduct” by the claimant that requires investigation. The suggestion that there may be other arguments/evidence in the future concerning the claimant’s conduct and the relationship between the ECA Confession and the Guarantee Confession do not in my view amount to circumstances that ought to be investigated and a compelling reason for the matter to proceed to trial: I am not persuaded that any such evidence is likely to be forthcoming and if forthcoming, would be relevant in the sense of providing any real defence to the claim.

Any risk that if the claimant sought to recover under the Term Sheet the greater amount of $617 million it could be regarded as a penalty under New York law is not a matter which is before this court. The claimant is not seeking to enforce a judgment obtained on the Term Sheet nor is it seeking to enforce a debt in excess of the amount which it is common ground was owed by the defendant. Any argument based on public policy or abuse of process in this regard is in my view without substance.

Counsel for the defendant submitted that the claimant had not explained why it chose first to enforce the Guarantee Judgment instead of the ECA Judgment. Further it was submitted that the pursuit of two consecutive actions was “a textbook illustration” of an abuse of process within Henderson v Henderson (1843) 3 Hare 100 as explained by Sir Thomas Bingham MR in Barrow v Bankside Members Agency Ltd [1996] 1 WLR 257 at 260:

“The rule in Henderson v. Henderson (1843) 3 Hare 100 is very well known. It requires the parties, when a matter becomes the subject of litigation between them in a court of competent jurisdiction, to bring their whole case before the court so that all aspects of it may be finally decided (subject, of course, to any appeal) once and for all. In the absence of special circumstances, the parties cannot return to the court to advance arguments, claims or defences which they could have put forward for decision on the first occasion but failed to raise. The rule is not based on the doctrine of res judicata in a narrow sense, nor even on any strict doctrine of issue or cause of action estoppel. It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever and that a defendant should not be oppressed by successive suits when one would do. That is the abuse at which the rule is directed.”

Counsel for the defendant submitted that the court is required to take a broad “merits based” approach: Johnson v Gore Wood & Co (No. 1) [2002] 2 AC 1.

Counsel for the claimant submitted:

I cannot see that there is any real prospect of a defence of abuse of process succeeding. The claimant is seeking to enforce two judgments arising out of different debts and based on separate judgments of the New York courts. It is not correct to characterise this as a single case or action. The defendant has acknowledged through two separate affidavits of confession that it was liable to the claimant under the Guarantee and the ECA. The defendant has failed to make payment of the sums which it accepted it was liable to pay and the claimant is entitled to seek to enforce those judgments. There is no realistic defence in my view to the enforcement of the ECA Judgment by reference to the principle in Henderson: having found that enforcement does not require “double recovery”, there is no arguable abuse of process or oppression in my view if the claimant determines the order in which it will seek to enforce judgments before the English courts (where such judgments are otherwise enforceable and not open to challenge). The claimant has not provided an explanation as to why it chose to enforce the judgments in the order in which it has done so but in my view there is no basis for the defendant to resist payment because the claimant has not explained why it has chosen to enforce its rights in a particular manner. Further, absent any risk of double recovery, there is no breach of public policy in the claimant seeking to enforce both judgments: Heiss v Attestor Value Master Fund LP [2013] EWHC 2556 (Ch) at [8].

As noted above, the evidence of Mr Rapport is that under New York law a plenary action does not operate as a stay against execution in the absence of a court order (or a bond). There are two issues in relation to the Stay Order:

Mr Meister in his first witness statement (paragraph 14) explains that the Stay Order is a “so-ordered stipulation” which is a type of order whose terms are agreed between the parties and subsequently ordered by the court. He states that under New York law the Stay Order constitutes a private contract between the parties as well as an order of the court. Accordingly New York law rules of contract interpretation apply to the Stay Order.

The Stay Order provides (at paragraph 1) that:

“All proceedings in this action, including without limitation Midtown’s time to answer or otherwise respond to the Complaint, are STAYED pending the determination of the Related Appeal.”

For the claimant Mr Rapport’s evidence is that the written terms of the Stay Order do not provide for any stay of execution of the ECA Judgment. Mr Rapport’s evidence (at paragraph 18 of his first witness statement) is that New York law requires that the Stay Order be interpreted by its plain terms: in support of this proposition he refers to dicta in various cases including that:

“stipulations embody a compromise between competing parties that, if not ambiguous, must be construed according to their plain language… ” [emphasis added] and

“Courts should be extremely reluctant to interpret an agreement as impliedly stating something which the parties have neglected to specifically include”

Mr Rapport states (paragraphs 19 and 20 of his first witness statement) that the Stay Order by its terms applies only to the Plenary Action and not the action on the ECA Judgment by virtue of the language which refers to staying “proceedings in this action” and his evidence is that “this action” refers to the Plenary Action. His evidence is that the ECA Judgment action was a different action started under a different docket number. His evidence is that the Stay Order therefore has no effect on the ECA Judgment action and no effect on the ECA Judgment.

Mr Meister’s evidence (at paragraph 12 of his first witness statement) is that Mr Rapport’s interpretation is “one possible interpretation” but leads to what he considers to be “an absurd result”. His evidence (paragraph 15) is that it is an important principle of contract interpretation under New York law that a contract should not be interpreted to produce a result that is absurd, commercially unreasonable or contrary to the reasonable expectations of the parties.

Mr Meister states in effect that it would produce an absurd result if the claimant retained the right to enforce the ECA Judgment worldwide while the Guarantee Appeal was pending. He states that this interpretation would mean that the defendant obtained no benefit from the Stay Order and would defeat the purpose of having commenced the Plenary Action.

In his second witness statement Mr Rapport states (paragraph 10) that the benefit of the Stay Order was that it allowed both parties to save the costs of litigating the overlapping issues in the Plenary Action and the Guarantee Appeal.

Mr Rapport also states (paragraph 28) that there is no need to look beyond the plain terms of the Stay Order and refers to a principle of contract interpretation that:

“when faced with two interpretations of a provision, courts generally prefer the narrow interpretation absent a clear manifestation of intent [for the broader interpretation]”

The evidence before me as to New York law is that the interpretation of the words “all proceedings in this action… are stayed” referred to the Plenary Action. The defendant does not seek to advance an argument based on the language of the Stay Order in this regard but argues that the result of the claimant’s “literalist” interpretation is absurd.

In order to defeat the application for summary judgment it is sufficient for the defendant to show some prospect of success. The interpretation of the Stay Order is a matter of New York law and there is no ruling of a New York court which determines the issue of interpretation.

However this is not a case where the facts may determine how those legal issues will present themselves for determination such that this matter should be left for trial. I have considered whether the legal issues (bearing in mind that the issue is a question of New York law) are such that further detailed argument is required but in my view I have sufficient evidence on the point in the exchange of views expressed in the witness statements of the New York lawyers to conclude that both sides have had ample opportunity to put their case on interpretation as a matter of New York law. I am therefore satisfied that I am able to determine whether the defendant has a realistic prospect of success in relation to this argument.

In my view the language of the Stay Order is very clear. The recitals to the order refer to the “related action” and “Related Appeal” which, it is common ground, is a reference to the guarantee action and the Guarantee Appeal. The fourth recital expressly refers to the fact that the Related Appeal:

“share common factual and legal issues with this action and the parties agree that proceedings in this action should be stayed pending the determination of the Related Appeal ”

Thus the rationale for the stay appears to be clearly set out in those recitals and is consistent with the claimant’s argument as to the purpose and commercial rationale for the stay.

It seems to me that agreeing a stay in order to avoid litigating the overlapping issues makes commercial sense. The issues do not have to be identical for there to be merit or sense in agreeing a stay. Accordingly I do not accept the submission that the interpretation for which the claimant contends results in an absurdity.

The evidence of Mr Rapport as to New York law (which has not been challenged by the defendant in evidence) is that the courts generally prefer the narrow interpretation absent a clear manifestation of intent for the broader interpretation.

Applying the principles of New York law, it seems to me that by its plain terms the Stay Order does not extend to enforcement of the ECA Judgment and given that, for the reasons set out above, I do not accept that the claimant’s interpretation of the Stay Order leads to an absurd result, it seems very likely that if a New York court were to determine the issue of construction, it would give effect to the narrow interpretation and find that the Stay Order did not have the effect of staying enforcement of the ECA Judgment.

Accordingly I find that there is no realistic prospect of the defendant establishing at trial that the Stay Order operates to stay the enforcement of the ECA Judgment. Given this conclusion in relation to its scope, it is not necessary for me to reach a conclusion on whether the defendant has a reasonable prospect of establishing that the Stay Order remains in force beyond the date on which the Guarantee Appeal was determined.

Midtown initially pleaded in this action that the ECA Judgment was obtained on behalf of Midtown and the other creditors and that Midtown took an assignment from those other creditors on 15 November 2016 after the ECA Judgement. Midtown subsequently amended the particulars of claim to delete the reference to the assignment and to state that the claimant alone filed the request seeking entry of judgement and the NY Court entered judgment for the claimant alone.

For the defendant it was submitted that it has not been established why the claimant was authorised to seek the ECA Judgment in its own name. In his first witness statement, Mr Hart states that the claimant provided no explanation for the amendments to the particulars of claim and (paragraph 19.3) that the claimant has provided “no evidence” that it was authorised to seek and obtain the ECA Judgment only in its name.

Counsel for the defendant referred to the statement by Mr Getz (at paragraph 19 of his first witness statement) that Mr Finestone in his capacity as attorney for “inter alia, Midtown” filed an affirmation in support of a request for the entry of judgment by confession. Counsel submitted that this was incorrect as was demonstrated by Mr Finestone’s own witness statement (paragraph 9) in which Mr Finestone stated that the New York Court allowed entry of the ECA Judgment on a filing by Midtown alone.

Counsel for the defendant submitted that “if” the claimant knew that it had not taken an assignment, but nevertheless sought judgement from the New York Court in its name alone, “in principle” this “could” found an allegation that the New York Court had been “sufficiently misled” as to preclude recognition in England. Counsel for the defendant submitted that this is a point which is being raised in the Plenary Action and there is “no good reason” why this court should recognise the judgment on a summary basis.

The evidence of Mr Getz (paragraph 39 of his first witness statement) is that Midtown had authority to seek the ECA Judgment “solely in its name”. Further the evidence of Mr Finestone (paragraph 9 of his witness statement) is that the ECA Confession did not “require that all lenders act together in seeking entry of the ECA Judgment”.

Whilst I understand and accept that this is a point which is being raised in the Plenary Action in New York, in my view the defendant does not have a realistic prospect of defending the action for enforcement of the ECA Judgment on the basis of its arguments in relation to the assignment. As noted above, in reaching its conclusion, the court must take into account not only the evidence actually placed before it on the application for summary judgment, but the evidence that can reasonably be expected to be available at trial. However in my view the claimant is not required to explain the amendment to the particulars of claim (which was made with the consent of the defendant) and the legal position in relation to the title of the claimant to sue, is clearly set out in the evidence of the New York lawyers referred to above.

As a matter of English law a foreign judgment is impeachable for fraud but as held by Mr Justice Teare at [65] of his judgment fraud requires conscious and deliberate dishonesty.

The defendant does not go so far as to allege conscious and deliberate dishonesty on the part of the claimant and in the absence of an allegation of fraud and without any suggestion that evidence of deliberate dishonesty can reasonably be expected to be available at trial, the defendant does not in my view have a realistic prospect of resisting the enforcement of the judgment on the basis of the issue raised in relation to assignment.

Accordingly for the reasons set out above, I find that the claimant has established that the defendant has no real prospect of successfully defending the enforcement of the ECA Judgment and that there is no other reason for a trial. The claimant’s application for summary judgment therefore succeeds.

In the light of my finding above that the claimant’s application for summary judgment succeeds, the defendant seeks a case management stay of execution pending the determination of the defendant’s challenges to the ECA Judgment in the New York courts.

Counsel for the defendant submitted that:

However in this case, the evidence is that, as referred to above, the defendant lodged but did not pursue its appeal against the ECA Judgment. It has now commenced the Plenary Action but as noted above, the evidence is that a plenary action does not operate as a stay in the absence of a court order or a bond. It was open to the defendant to seek such a stay or post a bond but the defendant did not seek such an order in relation to the ECA Judgment (although it did seek a stay of the Guarantee Judgment but it was denied by the courts) and the Stay Order for the reasons discussed above, does not in my view operate as such a stay.

In relation to the prejudice occasioned to the defendant by the sale of the assets, no particular evidence was before the court although they appear to be shares in private companies held by the defendant. Although therefore they may represent substantial assets which if sold, could not be easily returned, in my view the defendant charged these assets in support of its liabilities and the claimant is entitled to enforce that security.

It seems to me that in the circumstances of this case there is no explanation for the failure on the part of the defendant to pursue its original appeal and the claimant is entitled to enforce the judgment which it obtained in November 2016 and in respect of which the sum due remains unpaid. The fact that interest continues to accrue on the sum due does not in my view provide an answer. The claimant is entitled to seek payment. The defendant could make payment or seek to discharge the debt otherwise than through the sale of the relevant assets but after such a period of time, the claimant is entitled to seek to enforce the judgment and should not be required to await the outcome of the latest challenge by the defendant in the New York courts.

For these reasons the defendant’s application is refused.