Summary

An Italian public authority's delay in applying to set aside a default judgment granting declaratory relief to two banks was sufficient in itself to justify refusing its applications. Further, the authority had disclosed no sound basis for why summary judgment should not be granted in favour of the banks in related money actions.

Facts

The applicant Italian public authority (P) applied to set aside a default judgment granting declaratory relief to the respondent banks (B), and B applied for summary judgment against P in related money actions.

B and P had entered into three derivative transactions in November 2006 in connection with P's issuance of two bonds. In 2010, a body with oversight over P's affairs produced a report calling for further investigations of the transactions and their terms. A further report was produced in 2011 which identified alleged "substantial secret profits" that B had generated from the transactions, and which was said to amount to "disgraceful conduct". B issued proceedings in the United Kingdom in August 2011 seeking declarations regarding the validity of the transactions and the legal nature of their relationship with P. P did not engage in the declaratory actions, and B obtained default judgment in July 2012. Following the default judgment, B continued to perform their obligations under the transactions. B subsequently brought further proceedings in the UK seeking recovery of money that they alleged was due and outstanding from P under the transactions. At the time of the instant hearing, P had not served defences to either the declaratory or money actions.

Whilst conceding that it was still not in a position to serve a defence to the declaratory actions, P argued that the default judgment should be set aside because there were various issues which called for determination at trial. P also contended that summary judgment in the money actions should not be granted because B had failed to serve evidence explaining how the sums were claimed, and because it had counterclaims against B which it wished to pursue.

Held

(1) P had failed to act promptly in seeking to set aside the default judgment, and such delay was a very strong factor for dismissing its applications to set aside. The claim forms in the declaratory actions had been served 17 months before the instant proceedings, and it was plain that P took a deliberate decision to ignore them. Any defendant who deliberately ignored proceedings duly instituted and properly served did so at its peril, particularly where, as in the instant case, the parties had expressly agreed for English law and jurisdiction to govern their relationship. The judgment in the declaratory actions had been given 12 months before the instant hearing, and it was plain that P had notice of that judgment over nine months ago. In the meantime, and relying on the default judgment which, in the absence of any appeal, was final and binding, B had continued to perform their obligations, including payment of sums over to P pursuant to the transactions. Against that background, B's issuance of the money actions and their applications for summary judgment could not be criticised. The delay in making the applications to set aside was therefore sufficient in itself to justify their dismissal. However, in any event, the court was not persuaded that P had any real prospect of successfully defending the declaratory actions, or that there was any other good reason for setting aside the default judgment (see paras 34-35, 37-38, 40, 61 of judgment). (2) P had provided no sound basis for why summary judgment should not be granted in the money actions. It followed that B was entitled to summary judgment in the money actions, and P's applications to set aside were refused (paras 65-67).

Applications to set aside refused, applications for summary judgment granted