CL-2025-000062 - [2025] EWHC 1506 (Comm)

At the heart of the claim is an assertion by Eraaya that once the subscribers to the second Bond Issue paid money over to GLAS that money was that of Eraaya, and it had a right to direct the money to be paid to it (and to dispose of it as it wished). This underpins its approach to the listing of this application on the basis that there was no contest as to the right to the funds. This case counters the case of the Bondholders, who explicitly now claim that the money remained under some form of trust in their favour.

The background to this case is the detail which Eraaya suggests is inadmissible to construe Clause 3.4: the account of the discussions between the Bondholders and Elara prior to the Bondholders’ investment. That evidence is outlined above. At this stage it is not challenged by Eraaya.

Whether that account is correct is not a matter for this hearing. However at the same time as providing a narrative relevant to intentions on the proprietary front, it also provides one explanation which makes sense of the change to the drafting of Clause 3.4. In essence there is evidence (albeit Eraaya contends that the overall account is “untrue”) that prospective bondholders were concerned about the lack of any apparent progress towards providing the pledge which was part of the deal and that Clause 3.4 was arrived at as an alternative to a formal escrow process.

For present purposes however the Court needs to proceed on the basis that that account is arguable. The question is whether it gives rise to any arguable proprietary claim on the part of the Bondholders. This is relevant for obvious reasons to joinder, but it also has an impact on balance of convenience issues, because if there is no arguable proprietary claim by the Bondholders, that may have an impact on the potential future harms involved.