[2025] EWHC 2107 (Comm)

On 1st August 2024, the Claimant commenced this action against the Defendants, each of whom was a guarantor of a loan facility dated 14th June 2021 (“the Facility Agreement”), which facility was advanced by the Claimant to Mr Andrew Valmorbida (“the Borrower”). The Borrower defaulted under the Facility Agreement. Following the commencement of legal proceedings by the Claimant against the Borrower, they entered into a settlement agreement in April 2024.

As the Borrower did not repay the sums due under the Facility Agreement, the Claimant commenced these proceedings against the Defendants under the guarantees contained in the Facility Agreement.

On 7th August 2024, the Claimant maintains that the proceedings under the guarantees were served on the Defendants by service on Law Debenture Corporate Services Limited (“Law Debenture”), a London-based service of process agent appointed by the Claimant purportedly under the terms of the Facility Agreement.

The First and Second Defendants dispute the validity of this service. They maintain that they were not aware of the service of proceedings on Law Debenture until 4th September 2024 and did not receive notice of the appointment of Law Debenture until 11th October 2024.

The First and Second Defendants did not file an acknowledgment of service or a defence.

On 2nd September 2024, a default judgment was entered against each of the First and Second Defendants in the sum of US$2,749,621.62 plus £10,000.00 (inclusive of costs). The First and Second Defendants were not aware of the entry of default judgments against them until 13th September 2024.

The First and Second Defendants apply to set aside the default judgments pursuant to CPR rule 13.2 on the ground that the time for filing an acknowledgment of service has not expired, because the service on Law Debenture was not valid; alternatively under CPR rule 13.3 on the grounds that First and Second Defendants have a real prospect of successfully defending the Claimant’s claim. The Third Defendant was not involved in this application. The claim against the Third Defendant has been resolved.

In respect of the First and Second Defendants’ applications, I have read the witness statements of Ms Miyen Ho of The Khan Partnership LLP (“TKP”), served on behalf of the First and Second Defendants, and the witness statements of Mr Khaled Khatoun of Quinn Emanuel Urquhart & Sullivan UK LLP (“Quinn Emanuel”), served on behalf of the Claimant.

In disposing of this application, I was confronted with a large number of arguments by reference to documents in bundles comprising approximately 3,500 pages (aside from the bundle of authorities). I was assisted in navigating my way through these documents by the helpful submissions of counsel both in writing and orally. Only one day was allowed for the hearing of this application. As not all of the issues could be aired during the oral hearing, I invited the parties to serve supplementary written submissions after the oral hearing.