Steenbok Newco 10 Sarl v Formal Holdings Ltd

Hearing dates: 9 and 10 May 2024

Approved Judgment

A. INTRODUCTION AND BACKGROUND

The parties appear before the Court upon the hearing of the two day Pre Trial Review of the claims in this action, which is fixed for a 7 week trial starting in a mere 4 weeks time on 10 June 2024. In the context of the allocated one week's judicial pre-reading time (which is itself indicative of the complexity of the existing pleaded issues), the Skeleton Argument of the Claimants Steenbok Newco 10 Sarl and Ibex Retail Investments Limited (“Claimants”) is to be served on 3 June 2024, followed by that of the Defendants Formal Holdings Limited, Mr Malcolm King and Mr Nicholas King (“Formal”, “Malcolm King” and Nicholas King”) on 5 June 2024. There are accordingly only 15 working days after the PTR before the Claimants' Skeleton must be lodged, by which time, of course, all issues must be crystallised, all disclosure given and all relevant evidence, factual and expert must have been served, and all in good time before that so as to facilitate the preparation of such skeletons and to enable the (inevitably extensive and onerous) preparation for the trial itself. The parties are said to be trial ready in relation to the existing pleaded issues subject only to resolution of certain matters arising for consideration at the PTR and any necessary direction in relation thereto, none of which are likely to give rise to difficulties in the preparations for trial still less put the viability of the trial in danger.

However there is an extant substantive application before the Court, which must inevitably be determined first at the start of this PTR, and which has major potential implications for trial preparation and the trial itself, namely the Claimants' application dated 10 April 2024 (the “Amendment Application”) for permission to make amendments to their Re-Amended Particulars of Claim (“RAPOC”) with associated amendments to their Amended Claim Form (the “Proposed Amendments”).

The Proposed Amendments are, on any view, very substantial and are made very shortly before trial. They run to no less than 53 pages of new text (rather more than Particulars of Claim are meant to comprise in the first place without prior permission of the Court). The parties are diametrically opposed in their stance to the Proposed Amendments. The Claimants submit in their Skeleton Argument that, “none of [the Claimants'] Amendments are (i) out of the ordinary at this stage of proceedings for heavy Commercial Court litigation, (ii) fundamentally change the nature of the claim in any way, (iii) require a re-run of disclosure, witness evidence or expert evidence, (iv) plead any new claims in German or Austrian law (which are the applicable laws for all claims being made) or (v) involve a re-write of the case”.

In contrast, the Defendants submit that it is readily apparent from even a cursory read of the Proposed Amendments that the Claimants have effectively rewritten their case, ripping up important parts of their existing case and substantially recasting the case in the course of which it is said that they seek to advance new claims (after the relevant limitation periods have expired and so have no real prospects of success) which if CPR 17.4 might otherwise apply (which it is said does not apply to the vast majority of the claims) then all are reasonably arguably time barred and do not arise out of the same or substantially the same facts, and/or are not properly pleaded and/or have no prospects of success for other reasons, and which are in any event (fundamentally) made far too late (and should and could have been made much earlier, if at all), and would require further rounds of pleadings, and then disclosure (with fresh issues for disclosure), further witness evidence (potentially including from new factual witnesses) and further expert evidence on German and Austrian law, none of which, it is said could be undertaken prior to trial, and which it is said would unfairly and prejudicially detract from the Defendants' proper trial preparation, and could not in fact be achieved within the time available, and would derail the trial in circumstances where an adjournment would not be appropriate in any event (even had the Claimants applied for one which they have not). As such, and save for minor deletions/corrections, the Defendants mount a root and branch opposition to the Proposed Amendments.

There is extensive witness evidence before me in support of, and in opposition to, the amendments, to all of which I have had regard. The application is supported by the 14 ^th statement of Mr Kouchikali on behalf of the Claimants (“Kouchikali 14”) and opposed in the eighth and ninth statements of Mr Brierley on behalf of the Defendants (“Brierley 8” and “Brierley 9”) (the latter of which addresses confidential matters). Mr Kouchikali replies to the Defendants' evidence in his 15 ^th statement (“Kouchikali 15”). I also have two very substantial Skeleton Arguments before me (the Claimants' condensed into 26 pages through, amongst other techniques, the use of narrow margins and the Defendants' at an uncondensed 39 pages). Even more recently (and after the allocated reading day), the Claimants served a further submission entitled, “Claimants' Note on the Relation Back Argument” (the “Claimants' Note”) to which the Defendants responded in further submissions entitled, “Defendants' Response to Claimants' Note Concerning the Relation Back Argument” (the “Respondents' Note”).

I have heard a full day's oral argument on the Amendment Application. In circumstances where the Amendment Application needs to be determined before the remainder of the PTR can be proceeded with today, and any necessary directions given, and in circumstances where to reserve judgment would itself prevent the PTR being completed and would not allow sufficient time before trial for any consequential trial preparation (and associated directions), it is necessary to give judgment on the Amendment Application at this time on an ex tempore basis, and within the inherent time constraints upon doing so. Whilst this necessitates a concise approach to the evidence before me and associated submissions, I confirm that I have given careful consideration to all the evidence before me, and all the submissions that have been made to me.

B. APPLICABLE LEGAL PRINCIPLES

Save in the context of whether the “relation back” provisions apply in the context of foreign limitation periods, the applicable principles in relation to the amendment of statements of case were, unsurprisingly, largely common ground albeit that there were differences of emphasis between the parties.

B.1 THE DISCRETION UNDER CPR 17.3

CPR 17.1(2) provides that, where a statement of case has been served, “a party may amend it only (a) with the written consent of all the other parties; or (b) with the permission of the court”. CPR 17.3 contains a general discretion to grant permission.

The issue of whether to allow amendments involves the exercise of the Court's discretion – see Quah v Goldman Sachs [2015] EWHC 759 (Comm) at [38(a)]. This discretion is subject to CPR 17.4 (as addressed below). The circumstances in which amendments may be put forward are, as it has been put, “infinitely variable” and each application requires the Court to take into account the particular facts of the case. Accordingly whilst previous decisions may be illustrative, they are seldom compelling – see Vilca v Xstrata Ltd [2017] EWHC 2096 at [22] and [25(v)]. As was stated in that case, “It is always a question of striking a balance and weighing all relevant factors”.

In exercising the discretion, the overriding objective is of the greatest importance (see Quah at [38(a)]). In this regard the Court should have regard to the list of matters in CPR 1.1(2) (see Scipion Active Trading Fund v Vallis Group Ltd [2020] EWHC 795 (Comm) at [63]). The principles under CPR 3.9 do not apply: Vilca at [22].

Furthering the overriding objective includes “dealing with the case in ways which are proportionate to the amount of money involved, the importance of the case, the complexity of the issues, and the financial position of each party” ( CPR 1.1(2)(c)). This principle was applied in Scipion at [92].

CPR 1.1(2) provides that dealing with a case justly and at proportionate cost includes “ensuring that the parties are on equal footing” ( CPR 1.1(2)(a)) and “ensuring that the case is dealt with expeditiously and fairly” ( CPR 1.1(2)(d)). One aspect of this is the need to take into account the impact on a party's trial preparation. The parties need to be “on an equal footing and can participate fully in proceedings, and that parties and witnesses can give their best evidence”. This is relevant from the position of the party that has to respond to the amendments. The equal footing principle was applied in Scipion at [91]. The Defendants submit that this would not be the case here if the amendments were allowed, as it is said that the consequence would be to deny the Defendants' legal team the time that they require to prepare properly for a trial.

So far as fairness is concerned, a number of authorities recognise that amendments can be made to “catch up” with disclosure –...