Key Considerations for permission to apply for Summary Judgment in the English Courts – case update

The recent judgment in Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden NV v Societe Bengaz SA & Anor [2024] EWHC 901 (Comm)* (“FMO v Bengaz”) provides a useful reminder of the circumstances in which an English Court will consider an application for summary judgment, even when a remedy for default judgment may be available.

The factors considered by the Court include: 

1. Where summary judgment may be more readily enforced than a default judgment. In this case, Bengaz, the respondent to the application, was domiciled outside the UK. The Court recognised that a common ground for a court of law to refuse the enforcement of a foreign judgment is a lack of participation by the judgment’s debtor or a lack of engagement with the merits of the claim by the foreign court. In other words, the Court recognised that default judgments generally suffer a greater risk of being unenforceable in foreign jurisdictions than a summary judgment. The fact that the location of Bengaz’s assets was unknown was also a factor in the importance of enforcing the judgment. 
2. Where a default judgment is no longer an appropriate remedy because another party in the litigation has actively participated, making it an inappropriate remedy against that party. In this case, WAGPCO, a second defendant to the claim, was party to and actively participating in the English Court proceedings; a default judgment finding would have also bound WAGPCO but that would have been inappropriate in the circumstances. 

Further, the claimant was faced with the option of commencing an LCIA Arbitration or issuing a claim in the English Court. The judgment also highlights the benefits of pursuing summary judgment instead of early determination in arbitration proceedings, which include:  

1. Under the LCIA Rules for example, a procedure of early determination of claims was only formalised in the 2020 LCIA Rules. A tribunal’s appetite to reach an early determination of a claim where a party was not present remains unclear.
2. The English Court however, particularly with the decision in FMO v Bengaz, was pragmatic about allowing an application for summary judgment, even though default judgment may have seemed like the clear choice. The Court presented a robust procedure for summary judgment and reflects the English Court’s appetite to ensure enforceability of its judgments.
3. Arbitration awards, which are often viewed as being more easily enforceable than court judgments, become more difficult to enforce when a party fails (or refuses) to participate in proceedings. In those circumstances, a summary judgment, particularly from courts with wide international enforceability, may be the more favourable choice. 

*https://caselaw.nationalarchives.gov.uk/ewhc/comm/2024/901