Reniston Ltd Nedland v Overseas Inc.

• Jurisdiction: British Virgin Islands
• Judge: Jack, J [Ag.]
• Judgment Date: 02 July 2020
• Neutral Citation: VG 2020 HC 57,[2020] ECSC J0702-2
• Docket Number: BVIHC (COM) 2020/0047
• Court: High Court (British Virgin Islands)
• Date: 02 July 2020

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(COMMERCIAL DIVISION)

BVIHC (COM) 2020/0047

Between:

Reniston Ltd

Claimant

and

Nedland Overseas Inc

Defendant

Appearances:

Ms. Daisy Bovington of Collas Crill LP The defendant did not appear

Jack, J [Ag.]

1 By, what on its face is, a fixed date claim for issued on 8 ^th April

2020 the claimant seeks:

“Payment in the sum of USD$5,847,979, being amounts outstanding pursuant to:

• (a) A loan agreement dated 22 March 2013 between Daferson Developments Limited (Lender) and Severo-Zapadnaya Agropomishlennya Gruppa LLC (also known as SZAG LTD) (Loan Agreement);

• (b) A guarantee agreement dated 22 March 2013 (Guarantee Agreement), pursuant to which the Defendant guaranteed the amounts payable to the Lender pursuant to the Loan Agreement; and,

• (c) Assignments of the rights of the Lender under the each of the Loan Agreement and the Guarantee Agreement to the Claimant on 16 August 2018.”

2 In fact, the claim form should not have been as a fixed date action.CPR 8.1(5) has a list of claims which can be the subject of a fixed date action. An ordinary debt claim (other than those under hire-purchase or credit sale agreements) should be brought by an ordinary action on a Form 1 claim form.

3 Be that as it may the notice of hearing was issued on 18 ^th May 2020 with a return

date of 18 ^th June. As I pointed out in Brings (suing as Administrator of the Estate of Fresco Douglas Charles Stewart, deceased) v Golden Century Industrial Ltd and another1, the return date on the fixed date form should have been given when the fixed date claim form was issued. It is after all what the fixing of the date on a claim form means. If the Registry continues the practice of issuing fixed date claim form without a fixed date, at some point an issue may arise as to whether Her Majesty's Attorney-General should be liable for the costs thrown away by any adjournment caused by the Registry's failure to comply with the Rules.

4 At any rate the claimant sensibly waited until it had a return date from Registry before serving the defendant at the registered agents on 19 ^th May 2020. This is within time for the hearing before me on 18 ^th June 2020. Whereas ordinary actions are the subject of the procedure for default judgments: CPR Part 12, fixed date actions are not: CPR 12.2(b). Instead on the return date, the Court can treat the hearing as a case management hearing: CPR 27.2(a). Alternatively, if the claim is not defended, it can consider the matter as the trial of the action: CPR 27.2(b). The claimant on 17 ^th June 2020 issued an application for judgment by default, but this is not a possible procedure on fixed date action.

5 The statement of claim in the current matter provides, so far as material:

“3. On 22 March 2013, Daferson Developments Limited, a company/body corporate incorporated under the laws of Cyprus (Lender) entered into a loan agreement with Severo-Zapadnaya Agropomishlennya Gruppa LLC (also known as SZAG LTD), a legal entity organized under the laws of the Russian Federation (Primary Debtor) the terms of which were recorded in writing (Loan Agreement). The salient terms of the Loan Agreement, which will be relied on in full for its full force and effect were:

• 3.1 Principal Sum: USD$6,530,000

• 3.2 Term: 3 years

• 3.3 Interest:5% per annum

4. The funds were advanced by the Lender to the Primary Debtor pursuant to the Loan Agreement on 27 March 2013.

5. Also on 22 March 2013, the Lender entered into a guarantee agreement with the Defendant (Guarantee Agreement). The Guarantee Agreement, the terms of which will be relied on in full for their full force and effect, provided that:

5.1 The Defendant both:

• (a) guaranteed the obligations of the Primary Debtor to the Lender under the Loan Agreement; and

• (b) indemnified the Lender for amongst other things losses and expenses suffered or incurred arising out of or in connection with the obligations of the Primary Debtor to the Lender pursuant to the Loan Agreement:

clause 2 of the Guarantee Agreement

5.2 If the Primary Debtor defaulted under the Loan Agreement, the Defendant was liable to pay default interest in the amount of 0.1% per day: clause 4.1 Guarantee Agreement.

6. The Primary Debtor failed to pay any sums due to the Lender under the Loan Agreement. As at 27 March 2016, the total amount outstanding any payable by the Primary Debtor to the Primary Lender pursuant to the Loan Agreement was $7,509,500.

7. On 16 August 2018, the Lender and the Claimant entered into two agreements, being:

7.1 an assignment agreement pursuant to which the Lender assigned its rights under the Loan Agreement up to the value of $5,847,979.00 to the Claimant (Loan Assignment)

7.2 an assignment agreement pursuant to which the Lender assigned its rights under the Guarantee Agreement to the Claimant (Guarantee Assignment).

8. On 21 November 2018 the Claimant issued written demands to the Primary Debtor to pay to it all of the amounts outstanding pursuant to the Loan Agreement. The Claimant received no payment from the Primary Debtor in satisfaction of the debt.

9. The Claimant thereafter sought payment from the Defendant pursuant to the Guarantee Agreement. Negotiations progressed between the Claimant and Defendant by telephone and face to face meetings, during which time the Claimant gave the Defendant a written demand for payment, which demand was dated 5 February 2019.

10. As a result of the negotiations the Defendant agreed to make payments pursuant to the Guarantee Agreement. Therefore, between 4 March 2019 and 1 November 2019, the Defendant paid the amount of USD$5,270,000 in reduction of the Primary Debtor's and its own liability to the Claimant under the Loan Agreement and Guarantee Agreements, respectively, on the dates and in the amounts as follows:

10.1 4 March 2019 — USD$350,000

10.2 12 March 2019 — USD$770,000

10.3 6 September 2019 — USD$1,100,000

10.4 19 September 2019 — USD$1,100,000

10.5 1 October 2019 — USD$1,100,000

10.6 1.11.2019 —850 000 USD

10.7 13.02.20 —250 000 USD

10.8 13.02.20 —200 000 USD

11. On 14 November 2019, the Claimant issued a letter of demand to the Defendant, claiming the outstanding balance under the Loan Agreement and Guarantee Agreement of USD$7,789,027.37, being comprised of principal outstanding debt of USD$5,847,979 and interest pursuant to the Guarantee Agreement of USD$1,941,048.37.

12. As at the date of this Statement of Claim, the following amounts are outstanding pursuant to...