Court Of Appeal Confirms 'Warehousing' A Claim Will Not Necessarily Constitute An Abuse Of Process

The Court of Appeal has upheld a High Court decision that a claimant's unilateral decision not to pursue a claim it had commenced for a substantial period of time did not, on the facts of the case, constitute an abuse of process which justified striking out the claim:Aljawharah Bint Ibrahim Abdulaziz Alibrahim v Asturion Fondation [2020] EWCA Civ 32.

The Court of Appeal confirmed that such a decision, sometimes referred to as "warehousing", may well amount to an abuse of process, but it will not necessarily do so. It will depend on the claimant's reason for putting the proceedings on hold and the length of the period in question. The decision suggests that a finding of abuse is more likely where the claimant had no intention to bring the claim to trial, but there was no suggestion of that here.

If the court finds that there has been an abuse of process, it must still go on to consider whether it should exercise its discretion to strike out the claim, or whether some lesser sanction (such as tight directions to trial, an unless order or costs orders) may be more appropriate in the circumstances.

The Court of Appeal's decision emphasises that, where a claimant wishes to put the proceedings on hold, it should obtain the defendant's consent or the court's approval to a stay of proceedings. A failure to do so could have far reaching consequences, though a strike-out was avoided in this case.

Alex Lerner, a senior associate in our disputes team, considers the decision further below.

Background

The claimant, Asturion, is a Liechtenstein foundation which was founded to hold and manage certain properties on behalf of King Fahd of Saudi Arabia. The defendant, Ms Alibrahim, is a widow of King Fahd.

Asturion commenced proceedings in April 2015, alleging that a property valued at approximately £28 million had been transferred to Ms Alibrahim for no consideration by a director acting without authority. The parties lodged agreed directions in February 2016 but, through an oversight, the court did not either make an order embodying those direction or list a case management conference (CMC). That meant that there were no court-imposed deadlines for the taking of subsequent steps in the proceedings.

In subsequent months there was correspondence between the parties regarding potential amendments to the parties' statements of case and a potential application for security for costs, but from 24 November 2016 there was no activity by either side.

In August 2017...