This was an application for summary judgment in relation to the recovery of loans and the payment of promissory notes. The loans exceeded US$25 million.
The loans were provided to enable the first defendant and associated companies to develop environmentally friendly forms of transport. The first defendant alleged that there was an oral arrangement that the loans would not be repayable until the products had been launched and started to generate profits. The court had to decide whether the defendants had a real as opposed to a fanciful prospect of establishing that there was an oral agreement. The court found that the most cogent part of the claimant’s case was that the first defendant had signed a written agreement which was inconsistent with the oral agreement. The second most cogent part was the improbability of the alleged oral agreement. However, in support of the defendant’s case were other written agreements which could be consistent with the alleged oral agreement. Although the judge found that the defendant’s case was weak he could not say that it was unreal or fanciful. On the basis that the defence may succeed although it was improbable, he granted a conditional order that the first defendant do pay $25 million into court. The judge gave the first defendant a further opportunity to provide evidence of his assets if he thought that such an order would stifle his defence.
Although the claimant may not have obtained the order it was seeking, ordering a defendant to pay such a substantial sum into court would serve as a significant warning to the defendant about the limits of his defence.
Kazeminy and others v Siddiqi and others [2009] EWHC 3207