CL-2022-000467 - [2025] EWHC 1920 (Comm)

I deal, first of all, with the dividend distribution. It is not in dispute that on 30 May 2025 – and so after the quantum judgment, as Mr Lissack highlights – following a proposal made by the board of directors, a decision was made by the shareholders of VietJet in a General Meeting to authorise the board of directors of VietJet to issue dividends at the maximum rate of 20% accumulated undistributed consolidated profits. In this respect, Mr Lissack refers to the fact that Mr Boylan says that VietJet is yet to announce whether this dividend will be a cash dividend or a stock dividend, but that Mr Boylan does not challenge Mr Baker’s evidence that the value of the dividend is believed by FWA to be in the region of some US$85 million. Nor is it in dispute, Mr Lissack notes, that the intended dividend, if and when paid, will be the first to have been paid since 2019.

Mr Lissack submits that, in the circumstances, given that VietJet owes FWA something in excess of US$225 million, it is difficult (if not impossible, as he puts it) to see how a decision could have been made essentially to ignore the orders to pay the judgment debts and instead to make a maximum distribution of profits to shareholders. Mr Lissack suggests that Mr Boylan offers no explanation and puts forward no documentary evidence to support the decision reached.

Again, however, I consider that this is not a matter which assists FWA in the present context. Specifically, I do not consider that this is a matter which, taken in isolation or, indeed, with any of the other matters relied upon, provides the cogent evidence of a real risk that VietJet will dissipate its assets. I agree with Mr Thompson when he submits that this is an aspect of ordinary course of business. VietJet is a company, and companies do, on occasion, decide to distribute dividends. The fact that here a decision is being made to do so in the wake of the quantum judgment does not, of itself, lead to a conclusion that it is improper or unjustified or that the distribution, in effect, amounts to an illegitimate dissipation of assets.

On the contrary, when the matter is considered in somewhat more detail, it is apparent that this is a decision that was foreshadowed last year and possibly, Mr Thompson suggests, the year before that, namely 2023. In this respect, it is significant that in the proposal dated 9 May 2025 put forward to the general meeting of VietJet shareholders, the following was stated under the overall heading of “Profit Distribution Plan” in paragraph I, under the sub-heading “Report on the implementation”:

“Pursuant to the Resolution of the AGM No. 01-24/VJC-DHDCD-NQ dated April 26, 2024 approving the share issuance plan to pay dividends and the Resolution of the AGM No. 02-24/VJC-DHDCD-NQ approving the temporary postponement of the share issuance plan to pay dividends in order to prioritize the private placement plan, Vietjet Aviation Joint Stock Company (‘Vietjet’) did not pay dividends in 2024. This decision aims to enhance liquidity by settling short-term debts and supplementing business capital, invest in a wide-body A330 fleet, prepare for market expansion into Europe and the United States, develop ground and in-flight services, improve service quality, and expand operational scale. This is a crucial step to enhance competitiveness and build a solid foundation for Vietjet’s safe, efficient, and sustainable development in the post-pandemic period.”

As Mr Thompson points out, therefore, there was a decision made in 2024 to pay dividends, albeit that ultimately the AGM decided to suspend – temporarily, apparently – that payment through the issuance of shares.

What the proposal goes on to state under paragraph II (sub-heading “Profit distribution plan”) is as follows:

“The Board of Directors would like to propose to the 2025 AGSM to authorize the Board of Directors, depending on the business situation and market conditions, to implement the 2025 Profit Distribution Plan with dividends in shares and (or) cash at a maximum rate of 20% from accumulated undistributed consolidated profits from most recent Company Audited financial report.”

Accordingly, what was proposed in May this year, admittedly after the quantum judgment, was that there should, indeed, be the issuance of dividends, whether through shares or cash.

Just on this point, as Mr Thompson points out, given that the dividend has yet to be paid, whether in shares or cash, it remains to be seen whether, in fact, the dividends will be through the issuance of shares or cash. If the issuance of shares is how the dividend is accomplished, then, I rather agree with Mr Thompson that it would be difficult to see how that would entail the dissipation of any asset at all. The position would be different if the dividends were paid by cash, I acknowledge, but for present purposes it is not obvious that it will be one or the other, and it is certainly not obvious, therefore, that there is, through this decision to pay a dividend, a decision to dissipate assets otherwise available for the purposes of enforcement of the judgment debts.

In this respect, it is also significant to look at the accounts dated 10 May 2025, specifically at internal page 8 under the heading “Consolidated Balance Sheet as at 31 December 2024”. This is because (under the sub-heading “Owners’ Equity – Capital and reserves”) there is an entry stating “Undistributed post-tax profit of previous years” and against that entry is a very substantial figure of 9,249,524,468,061. That entry is followed by an entry stating “Post-tax profits of current year” against which the figure is 1,403,162,979,000. It follows that the post-tax profits that have not, to date, been distributed from previous years dwarf the amount of post-tax profits for the current year. In those circumstances, the submission made by Mr Thompson, namely that what here VietJet is doing is no more than its ordinary course of business, is a submission which seems to me to have significant force.

In the course of Mr Lissack’s submissions, he suggested to the contrary and, in particular, sought to suggest that the issuance of dividends by a company cannot amount to an ordinary course of business activity. I pressed him on that matter and did not receive a satisfactory answer. It seems to me that Mr Thompson must be right that, if a company chooses to distribute dividends then that is an aspect of its ordinary course of business, and that Mr Lissack’s submission to the contrary is rather too limited. His submission, in essence, was that “ordinary course of business” amounts to “ordinary course of trade or business activity involving the business of that company”. I do not agree. It would include that, but it cannot be limited to this, and for that reason, the decision to distribute a dividend or dividends is not a matter which justifies a conclusion that here, objectively, there is a sufficient risk of dissipation.