Debarring Sanctions To Compel Compliance With Outstanding Monetary Court Orders ' Zumax Nigeria Limited v First City Monument Bank Plc [2020] EWHC 1852(Ch) - Poonam Melwani QC & Paul Henton

• Published date: 31 July 2020
• Subject Matter: Litigation, Mediation & Arbitration, Compliance, Trials & Appeals & Compensation
• Law Firm: Quadrant Chambers
• Author: Ms Poonam Melwani QC and Paul Henton

OVERVIEW

On 14 July 2020 the High Court (Miles J) handed down the latest judgment in the long-running Zumax v First City Monument Bank litigation - granting an "unless order" against Zumax to compel compliance with an order of the Court of Appeal, as the price to be paid for further participation in the litigation.

The proceedings relate to historic bank transfers in 2000-2002, performed via correspondent bank accounts- i.e., by paying funds into accounts held by the defendant bank with a further "correspondent" bank, for onward credit to the ultimate recipient. Proceedings were issued in 2013, claiming proprietary remedies on the basis that the Bank was a trustee or constructive trustee of the funds. Summary judgment was entered on this basis in November 2017 (Barling J); but under a new legal team led by Poonam Melwani Q.C. of Quadrant Chambers, the Bank had this overturned by the Court of Appeal on 13 February 2019. As we reported at the time, the Court of Appeal comprehensively rejected the "trust" analysis, holding that any claims against the Bank would be personal claims only, and that Zumax would need to seek permission to amend its Particulars of Claim in the action if it wished to pursue personal remedies.

The Court of Appeal also ordered the return of the judgment sum, which had been released to Zumax from funds in Court shortly prior to the appeal hearing, and also ordered certain payments on account of costs.

However, more than 14 months later, the vast majority of the amount ordered to be repaid remained outstanding. The total outstanding amounts to more than '3.5 million, plus interest accruing from April 2019 onwards.

Further, having unsuccessfully sought to appeal the Court of Appeal judgment to the Supreme Court on the constructive trust issue, Zumax also now sought to re-amend its Particulars of Claim in the action to advance new causes of action in debt, restitution, breach of contract, tort, and breach of fiduciary obligations.

The Bank therefore sought an "unless" order to compel compliance with Zumax's long outstanding payment/repayment obligations under the Court of Appeal Order. The Bank also opposed any further amendments being made unless/until Zumax's obligations under the Court of Appeal's order were satisfied. (The Bank also resists the proposed amendments on freestanding grounds including limitation, which are yet to be decided).

At the Bank's invitation, the Court determined its application on the basis of an assumption most...