Durnont Enterprises Limited v Fazita Investment Limited & Ors

Mr Justice Rajah : A. Introduction and issues

1. The Claimant (“ Durnont ”) has brought proceedings on its own behalf and by way of derivative action on behalf of the Ninth Defendant (“ PREI ”). Durnont was given permission to bring those proceedings on behalf of PREI and to serve them out of the jurisdiction by an order of Tom Smith KC sitting as a Deputy High Court Judge on 8 June 2023. The proceedings allege that the First to Fifth Defendants have conspired to fraudulently misappropriate PREI’s interest in a Polish fund invested in Polish real estate. The First to Fifth Defendants have issued a number of applications to strike out or have reverse summary judgment in respect of the claim, to challenge jurisdiction and to set aside the grant of permission to bring a derivative claim.

2. The issues raised by these applications for determination by me are as follows. a. Is there a serious issue to be tried in respect of the claims made in the Amended Particulars of Claim? b. In respect of each claim against each Defendant, is there a good arguable case that it falls within one of the gateways in CPR PD6B para 3.1? c. Are the courts of England & Wales the most appropriate forum to determine this claim?

3. Although it was common ground that the test for obtaining permission to bring a derivative claim involves a higher threshold of establishing at least a prima facie case, the Defendants did not seek to rely on that higher threshold. They agreed that the applications to set aside the grant of permission to bring a derivative claim should stand or fall with the strike out, summary judgment and jurisdiction applications on the basis that the Defendants say there is no serious issue to be tried. B. Durnont’s claim

4. This summary is either taken from undisputed facts or facts not disputed for the purposes of these applications, or where disputed from Durnont’s Amended Particulars of Claim (“ APOC ”), which on these applications have to be treated as true unless demonstrably false.

5. PREI, which was incorporated in Cyprus on 16 March 2007, is said by Durnont to be a joint venture between its principal shareholders which are or represent certain groups of Norwegian and Polish investors for the purpose of investing in property in Poland. Durnont, another Cypriot company, is an investment vehicle for two Norwegian investors, Peter Gram and Kim Steimler. It holds a 27.94% shareholding in PREI. The First Defendant (“ Fazita ”), a BVI company which has a 19.65% interest in PREI, represents the interests of the Second and Third Defendants (“ Władysław ” and “ Michael ” respectively For clarity, I refer to each member of the Jaroszewicz family by their first names to distinguish between them. No disrespect is intended to any of them. ). Sazia Investments Limited (“ Sazia ”), another BVI company with 19.47% of PREI represents the interest of Władysław’s brother Jan Jaroszewicz (“ Jan ”). BNP (“ the Bank ”) owns 11.19% of PREI. The remaining shares are owned by minor Norwegian and Polish investors including the Fifth Defendant, Anna Bandurska, who owns 0.18% of the shares in PREI.

6. PREI’s shares are divided into three classes of shares. Fazita and Sazia hold A shares and Durnont holds B shares. The other shareholders have ordinary shares. Durnont says that the Articles of Association give the A and B shareholders an effective veto over any members resolution. A and B shares carry a right to appoint up to four directors to PREI’s board and Durnont says the Articles give any of the directors an effective veto over any resolution of the board of directors Mr Dawid suggested clause 11.8 might provide a way around this (see footnote 3 ) but Durnont has a n arguable case with a real prospect of success that what it says as to an effective veto is correct. . PREI appears to have been designed to operate by cooperation and consensus as between the parties whose interests are represented by Durnont, Fazita and Sazia.

7. Fazita is a BVI registered company which is ultimately owned by Accuro (Jersey C.I.) Trustees as the trustee of the Clairfield Settlement of which Władysław and his family, including Michael, are discretionary beneficiaries. The directors of Fazita were officers or employees of Accuro until 2012 since when the directors have been two corporate service companies that form part of the Accuro group.

8. Władysław is a director of PREI, and although technically his appointment was not by Fazita, both he and Fazita have made statements, including statements to the Cypriot and Polish courts, that he is Fazita’s representative and appointee on PREI’s Board of Directors. Mr Dawid on behalf of Fazita accepted that the hearing before me should proceed on the pleaded basis that Władysław is Fazita’s appointed director. Władysław has appointed Michael as his nominated alternate.

9. Jan is Sazia’s appointed director and Mr Gram and Mr Steimler are Durnont’s appointed directors. There is also a director appointed by the Bank.

10. For tax reasons PREI did not own the real estate assets of the joint venture. Instead, PREI owned all the certificates in a closed end investment fund called Alpha Real Estate Fundusz Inwestycyjny Zamkniety (“ the Fund ”). The Fund owned various asset-holding subsidiaries which ultimately owned the underlying Polish real estate investment. Until 8 June 2020 the Fund was managed by Copernicus Capital TFI S.A (“ Copernicus ”). As at 31 December 2015 Durnont says that the Fund had an approximate value of 100 million euros.

11. After a restructuring in October 2013 the Fund owned several Polish joint stock partnerships (“ SKAs ”). Under Polish law an SKA acts and is represented by a General Partner. The General Partner for all of the SKAs was JWK Management Sp. Z.o.o (“ JWK ”) or an entity owned and controlled by JWK. The SKAs owned the underlying real estate directly or through another layer of Polish entities (“ SPJs ”). JWK had an interest of up to 1% in the SPJs. The parties have referred to the asset owning entities as “ the portfolio companies ” and I shall do the same.

12. This structure was arranged with the benefit of tax advice. PREI did not own or control the portfolio companies but they were almost wholly owned by the Fund and PREI owned all the certificates in the Fund. The economic value of the portfolio companies therefore belonged almost entirely to PREI through the Fund. Although not strictly accurate, it is in this sense that I refer below to PREI effectively owning the portfolio companies and their assets.

13. It is not disputed that JWK is majority owned directly or indirectly by Władysław and Michael. Its sole board member is Ms Bandurska. Durnont says that Władysław and Michael have effective control and influence over the SKAs and the underlying real estate assets through their ownership of JWK and through Ms Bandurska. Durnont says that it was always intended that Władysław and Michael would exercise this control for the benefit of PREI, who does not have direct control of the portfolio companies.

14. On 9 July 2007, a share subscription agreement (“ the SSA ”) was entered into by (amongst others) PREI, Fazita, Sazia and the Bank pursuant to which the Bank agreed to become a shareholder and to subscribe for 20 million euros in convertible bonds. On 19 December 2007 Durnont became a party to the SSA pursuant to a Deed of Adherence. The SSA is governed by English law and contains an exclusive English jurisdiction clause (see Clause 32).

15. The SSA has been the subject of several amendments. The Third Deed of Amendment dated 12 July 2013 and a Framework Financial Settlements Agreement between PREI and the Bank of the same date (“ the FFSA ”) are significant. They made provision for the repayment of the Bank’s convertible bonds. The bonds were to be redeemed by 31 December 2016 but earlier repayment was required if the underlying portfolio companies had excess cashflow or proceeds from disposals. PREI undertook to secure that any such excess cash or disposal proceeds were paid by the portfolio companies into a Special Account in the name of the portfolio company with the Bank and to procure that such sums were used to discharge the Bank’s convertible bonds. The portfolio companies were not party to the Third Deed of Amendment or the FFSA but they gave the Bank security over their real estate assets and over the Special Accounts. The FFSA set out a mechanism whereby the money in the Special Account was paid into an Escrow Account in the name of the Fund (over which the Bank did not have security). It was then to be released to the Bank in partial discharge of the convertible bonds. That sum could only be released from the Escrow Account upon a resolution being passed by Copernicus exhibiting to it a resolution passed by an investor’s meeting of the Fund. For an investor’s meeting resolution to be passed PREI had to issue a power of attorney to an individual who could represent it at an investor’s meeting of the Fund.

16. The Fourth Defendant (“ M-JWK ”) is one of the portfolio companies which Durnont says is controlled by Władysław and Michael through JWK and Ms Bandurska. In practice M-JWK acted as a funnel to channel the excess cash and disposal proceeds of all the portfolio companies into its Special Account and then on to the Escrow Account.

17. Durnont’s case is that Władysław and Michael have divested PREI of its certificates in the Fund and through them its interest in the portfolio companies and have expropriated the certificates and the underlying portfolio companies to themselves.

18. The pleaded case as to the alleged fraud can be summarised as follows.

19. On 18 December 2014, the Bank agreed to sell its shares to a new company incorporated by Michael (“ PSPT ”). Durnont says that the parties to that share purchase agreement appeared to have contemplated using assets of the Fund (i.e. in real terms, PREI’s assets) for the purpose of purchasing the Bank’s shares and that this sale was concealed from Durnont and PREI.

20. Between June 2015 and the end of December 2015 the Bank’s convertible bonds were repaid by a combination of enforcement by the Bank on 1 July 2015 of security over 8.25 million euros of M-JWK’s assets and payment by M-JWK directly to the Bank of the balance (and not via the Fund’s Escrow Account in accordance with the FFSA). In January 2016, M-JWK brought a claim against PREI in the High Court of England and Wales for approximately 16 million euros claiming to have subrogated to the Bank’s rights against PREI (“ the M-JWK Claim ”).

21. Durnont says that this was part of a fraudulent plan to expropriate PREI’s assets. It points to the fact that M-JWK did not follow the process in the FFSA but instead discharged the Bank’s debt directly, thereby allegedly subrogating under Polish law to the Bank’s debt against PREI. Yet it discharged the Bank’s debts from assets and funds which effectively belonged to PREI and had been intended to discharge PREI’s liability to the Bank in accordance with the FFSA. Durnont points to the incongruity of M-JWK, a portfolio company effectively owned by PREI, then commencing proceedings to obtain a judgment against PREI in respect of this subrogated debt. The First to Fifth Defendants say there is an innocent explanation for why these steps were taken, but for the purpose of these applications, Durnont’s allegations are not demonstrably false.

22. On 22 April 2016, an agenda for a meeting of the board of PREI on 28 April 2016 was circulated. The terms of the Agenda made it clear that PREI intended to obtain advice and representation so as to defend the M-JWK Claim.

23. On 26 April 2016, a Polish lawyer called Pawel Tokarski, acting pursuant to a purported power of attorney on behalf of PREI given to him by Władysław, entered into an agreement to transfer all of PREI’s certificates in the Fund to M-JWK as collateral for PREI’s satisfaction of M-JWK’s claim (“ the Collateral Agreement ”). Durnont alleges that Mr Tokarski was acting on the instructions of Władysław who was acting fraudulently. Durnont says the Collateral Agreement was uncommercial as certificates it says were worth 100 million euros were being given as security for an alleged debt of 16 million euros, and says that Władysław and Michael having procured the alleged subrogation and the M-JWK Claim had now procured the Collateral Agreement in relation to the M-JWK Claim for their benefit.

24. No mention was made of the Collateral Agreement at the board meeting of 28 April 2016 at which Władysław was excluded from voting on the basis of a conflict of interest and resolutions were passed to obtain advice and representation so as to defend the M-JWK Claim, and for powers of attorney to be granted to Mr Steimler and Jan to permit them to make decisions on behalf of PREI.

25. On 6 May 2016, Fazita and Władysław applied for and obtained an injunction restraining PREI and its directors from implementing the resolutions passed. More injunctions were obtained in Poland by Fazita and Władysław in August 2016.

26. Durnont relies on Fazita’s conduct in taking steps in Cyprus and Poland to prevent PREI from defending the M-JWK Claim, contrary to the apparent interest of Fazita as a shareholder of PREI, as Fazita’s involvement in the alleged fraudulent plan of Władysław and Michael and at their instigation.

27. Negotiations ensued and on 2 March 2017, Durnont entered into an agreement providing for its potential exit from PREI (“ the Framework Agreement ”). The exit has not been achieved but in the Framework Agreement Mr Steimler and Mr Gram gave acknowledgments that the M-JWK Claim was valid and that the disputed board resolutions passed by PREI were invalid.

28. On 2 March 2017, M-JWK obtained default judgment in the M-JWK Claim for 16,248,115 euros (“ the Default Judgment ”). Durnont alleges that this was only possible because of the agreed impending exit for shareholders and representations by Władysław that differences on the board of PREI would be resolved, and the status quo maintained as regards the certificates, until exit. Durnont alleges this judgment was obtained as part of the fraudulent design by Władysław and Michael, fraudulently facilitated by Fazita, M-JWK and Ms Bandurska, to expropriate PREI’s assets.

29. On 16 October 2018 M-JWK returned PREI’s certificates to it pursuant to a Return Transfer Agreement and shortly thereafter enforced the Default Judgment against those certificates. That enforcement took place by way of sales by bailiffs in Poland who placed a value of 32 million euros on the certificates and applied a statutory discount of 25% for the purpose of an auction. M-JWK was the only bidder and purchased the certificates which were sold.

30. Durnont points to the odd circularity of an almost wholly owned subsidiary of the Fund in which all the certificates were owned by PREI, obtaining a judgment against PREI, and then acquiring the certificates in the Fund which owned it. Durnont says that all the funds used to create the alleged subrogation debt on which the Default Judgment was based, and then to acquire PREI’s certificates in satisfaction of the debt appear to have been effectively PREI’s funds.

31. What was not returned pursuant to the Return Transfer Agreement was a new H class of certificate which had been issued by the Fund to M-JWK while it was the holder of PREI’s certificates. Durnont relies on this certificate issue, and another in November 2019 to another portfolio company called Alfa B, in support of its allegations of fraud, asserting that they were a secret dilution of PREI’s interest in the Fund.

32. On 22 July 2019 PSPT, which Durnont alleges is owned and controlled directly or indirectly by Władysław and Michael, commenced proceedings in the High Court of England and Wales against PREI alleging breach of the SSA and claiming 4,119,527 euros. Default judgment was obtained on 1 November 2019 and on 29 January 2020 PREI was ordered to pay PSPT approximately 4.2 million euros. On 17 April 2020 there was a further bailiff sale to enforce the PSPT judgment and PREI’s last remaining certificates were acquired by another portfolio company (M2 Alfa Park 5 Sp) and soon thereafter PSPT was liquidated.

33. Durnont says that PREI and Durnont were not aware of the PSPT Claim and that in any event PREI was disabled from defending itself in those proceedings because of the deadlock on the Board. Durnont alleges that the PSPT Claim was another judgment procured by fraud as part of the fraudulent plan to expropriate PREI’s certificates.

34. In summary Durnont says that PREI is the victim of a fraudulent plan to manufacture a purported debt of 16 million euros and through the steps subsequently taken to use that purported debt to divest PREI of its assets which were worth (Durnont says) 100 million euros in 2015.

35. Durnont seeks to establish the following claims in these proceedings: a. Liability to PREI, alternatively to Durnont directly, on the part of each of D1 to D5 for breach of the Polish Civil Code and in particular Article 415 and 422 (“ the Polish law claims ”); b. Liability to PREI on the part of Władysław and Michael for breach of fiduciary duty to PREI under Cypriot law (“ the Fiduciary Duty claims ”); c. Liability to PREI on the part of Fazita for breach of the SSA which is governed by English law (“ the SSA claim ”); and d. Setting aside of the Default Judgment and restitution or compensation to PREI for the benefits received by M-JWK, Władysław and Michael for harm caused to PREI (“ the Default Judgment claim ”). C. Procedural history

36. The claim was issued on 25 April 2022. At the same time Durnont issued an application for permission to bring a derivative claim on behalf of PREI and to serve it out of the jurisdiction. On 15 September 2022 Mr Justice Meade granted Durnont first stage permission to continue these proceedings under CPR 19.14(4) and leave to apply for permission to serve out of the jurisdiction. On 7 June 2023 Tom Smith KC sitting as a Deputy High Court judge granted Durnont permission to amend, second stage permission to pursue the claims in the APOC and permission to serve the Amended Claim Form on the Defendants out of the jurisdiction. Tom Smith KC gave his detailed reasons in a reserved judgment; see Durnont Enterprises Limited v Fazita Investments Limited [2023] EWHC 1294 (Ch) .

37. On 17 June 2022 M-JWK commenced its own proceedings against PREI, Durnont, Sazia, Jan Jaroszewicz, Kim Steimler, Peter Gram and Ola Rothe. The declaratory relief sought includes declarations that PREI was indebted to M-JWK in the amounts claimed in the M-JWK Claim, that the Default Judgment was lawfully obtained and is valid and binding on PREI. In 2023 the parties agreed to stay those proceedings pending the outcome of this jurisdiction dispute. D. Service out of the jurisdiction – principles

38. There is no dispute as to the applicable principles which should govern the determination of a defendant’s application under CPR Part 11 to challenge the grant of permission to serve out of the jurisdiction. The parties cited to me without criticism my decision in Okuashvili & ors v Ivanishvili & ors [2025] EWHC 829 (Ch) and the summary below is largely borrowed from that judgment, although I have added some further observations about the nature of the inquiry in relation to a pleaded case.

39. On a defendant’s application under CPR Part 11, the original without notice grant of permission “ leaves no footprint ”; Briggs, Civil Jurisdiction and Judgments, 7 th ed (2021) para 27.07. On the defendant’s application, the burden remains on the claimant to show the court that the grant of permission is justified: Navig8 Pts Ltd v Al-Riyadh Co [2013] EWHC 328 (Comm) ; [2013] 2 CLC 461 at [10]. To justify the grant of permission by the Court to serve out of the jurisdiction under CPR r.6.36 and 6.37, each claimant must show that each of their claims against each defendant satisfies the four requirements set out below: Altimo Holdings and Investments Ltd v Kyrgyz Mobil Tel [2011] UKPC 7 , [2012] 1 WLR 1804 at [71] per Lord Collins. D.1 Serious issue to be tried

40. The first requirement is that there must be a serious issue to be tried on the merits. This means that there must be a real, as opposed to fanciful, prospect of success on the claim. A mini-trial is to be avoided; Lungowe v Vedanta Resources Plc [2019] UKSC 20 , [2020] AC 1045 at [9] to [16], Okpabi v Royal Dutch Shell Plc [2021] UKSC 3 , [2021] 1 WLR 1294 at [20] –[23]. The analytical focus is on the particulars of claim (where there are some) and whether, on the basis that the facts there alleged are true, the cause of action asserted has a real prospect of success ; Okpabi at [22].

41. The purpose of focussing on the pleading and the pleaded facts is to ensure the scope of the inquiry is proportionate and a mini-trial is avoided; that is clear from the discussion in Okpabi at [20]-[23]. If it becomes apparent, prior to, or even during a jurisdiction hearing, that the pleading does not properly capture the intended case, the affected party should amend; per Bright J in Magomodev v TPG Group Holdings (SBS) LP [2025] EWHC 59 (Comm) at [202]. If a defect in a claim can be cured by amendment it may not be just to strike out the claim at such an early stage of proceedings; see e.g. Qatar Airways Group QCSC v Middle East News FZ LLC [2020] EWHC 2975 (QB) at [158].

42. The object of the inquiry is to determine whether the causes of action asserted by the claimant have a real prospect of success. The object of the inquiry is not a search for a perfect pleading, nor is it the place to resolve complaints about pleading style or lack of clarity or a lack of non-critical particulars which can be obtained by Part 18 Request if the claim continues. For example, in Qatar Airways Saini J accepted a revised pleading produced on the day of the hearing which satisfied “ the basic pleadings requirements, although it is far from perfect and easy to follow ”; see Qatar Airways at [148]. D.2 Good arguable case that it passes a gateway

43. The second requirement is that there must be a good arguable case that the claim falls within one of the jurisdictional gateways in CPR PD 6B paragraph 3.1. A “ good arguable case ” in this context means that in respect of each claim, each claimant has “ the better of the argument ” than the foreign defendant that the claim falls within a gateway. If there is a dispute of fact (including a dispute of foreign law), the Court will take a view on the material available if it can reliably do so. If it cannot, there is a good arguable case if there is a plausible evidential basis for it; Brownlie v Four Seasons Holdings Inc [2018] 1 WLR 192 at [7]. D.3 England is the appropriate forum

44. The third requirement is that the courts of England and Wales must be clearly or distinctly the appropriate forum for the trial of the claim. The “ appropriate” forum means that in which the case may be tried more suitably for the interests of all the parties and the ends of justice: Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 at 476C, Lungowe at [66]. In determining the appropriateness of the forum, the Court looks at connecting factors to determine with which forum the action has the most real and substantial connection ( Spiliada at p. 478A). These include not only factors affecting convenience or expense, but also factors such as governing law, the place where the parties reside or carry on business, and where the wrongful acts and harm occurred ( Spiliada p.478A-B). The risk of multiplicity of proceedings giving rise to a risk of inconsistent judgments is only one factor but it is an important one ( Lungowe at [69]). In applying these connecting factors to cases involving multiple defendants their relative status and importance in the case should be taken into account, such that greater weight is given to the claims against those who may be described as a principal or major party or chief protagonist; JSC BTA Bank v Granton Trade Limited [2010] EWHC 2577 (Comm) at [28], Limbu v Dyson Technology Ltd [2024] EWCA Civ 1564 at [22].

45. In respect of the defendants in respect of whom a claimant needs permission to serve out of the jurisdiction, the burden is on the claimant to show that England is clearly the more appropriate forum. Those defendants who have been served by the claimant as of right and contend that the Court should nevertheless not exercise its jurisdiction to try the claim because England is not the appropriate forum ( forum non conveniens) have the burden of showing that there is another available forum that is clearly more appropriate. In a mixed service in and service out case, the Court has to look holistically and in the round at the question of appropriate forum to identify the single jurisdiction where the claims against all the defendants may most suitably be tried; Limbu at [33].

46. In this case there is a dispute as to whether Fazita and M-JWK have been served as of right which I have to resolve. D.4 In all the circumstances, the court should exercise its discretion to permit service out

47. Finally, the Court retains a discretion to refuse to permit service out even if the above requirements are satisfied. It may do so, for example, where a particular anchor defendant has only been sued in order to enable a claim to be brought against another defendant: Erste Group AG (London) v JSC (JMV Red October) [2015] EWCA Civ 379 , [2015] 1 CLC 706 at [150]. E. Polish Law Claim - serious issue to be tried.

48. For the purposes of this hearing Durnont relied on the expert evidence of Joanna Bogdanska while the First to Fifth Defendants relied on the expert evidence of Prof. Uw Krzysztof Koźmiński.

49. There were areas of disagreement between them but they were agreed that Article 415 of the Polish Civil Code sets out a fault based tortious liability. It was common ground between the experts that as a matter of Polish law the following conditions need to be established by Durnont: a. unlawful conduct amounting to a tort; b. damage; c. fault; and d. an adequate causal link between the unlawful conduct and the damage. Under Article 422 a person who aids and abets the direct perpetrator of a tort is liable to the same extent. A person who benefits from the tort may also be liable, even if the person does not participate in the tort.

50. Ms Bogdanska’s evidence is clear that if a Defendant was knowingly involved in a fraudulent design to expropriate PREI’s assets then the conditions of Article 415 or Article 422 are likely to be satisfied in respect of that Defendant. E.1 Polish Law claim against Władysław and Michael – is there a serious issue to be tried?

51. Mr Hayman, in both his skeleton argument and his oral submissions, submitted there was no serious issue to be tried in the Polish law claim against Władysław and Michael. His submissions fell into several broad categories. Pleading criticisms

52. First, there were a series of technical objections to the pleading, or points of construction, notwithstanding that there is little doubt as to the core case Durnont advances.

53. Into this category fell a contention that Durnont should have pleaded a positive case on the validity of the M-JWK Claim, that it should therefore be assumed that the M-JWK Claim was a valid claim under Polish law, and that Durnont cannot rely on Article 422 or a doctrine of abuse of legal personality mentioned by Ms Bogdanska in her report against his clients because the Article and the doctrine are not mentioned in the pleading against Władysław and Michael.

54. I do not accept that Durnont was required to plead a positive case that the M-JWK Claim was based on an invalid debt. Ms Bogdanska’s evidence suggests that ostensibly lawful actions (such as a valid M-JWK Claim) as part of an unlawful conspiracy can still give rise to liability under Polish law under Art 415 and/or Art 422. The pleading identifies that it is asserting liability under the Polish Civil Code and pleads the facts and attribution of knowledge said to give rise to a liability under Article 415 which is expressly pleaded. I am satisfied that the pleading discloses a cause of action against Władysław and Michael under Article 415 of the Polish Civil Code. Although liability under both Article 415 and 422 is expressly asserted against Ms Bandurska, Article 422 is not mentioned in relation to the other Defendants. It is not clear to me from the expert evidence whether Art 422 confers a separate cause of action, or simply a means of establishing liability under Article 415. I do not need to resolve now whether on this pleading the Claimant will be able to rely on Art 422 against the other Defendants.

55. Mr Hayman paused his submissions on whether there was a triable issue to ensure Mr Purchas and Mr Dawid had sufficient time for their submissions and to reflect on a number of queries raised by me. In his resumed submissions, he did not pursue a number of points in his skeleton argument and focussed on the allegation (in paragraph 52 of the APOC) that “The Default Judgment was only obtainable by M-JWK because of the agreement of PREI not to file a defence and counterclaim, a position it adopted on the basis that an exit for shareholders was imminent and in light of the assurances and representations provided by [Władysław] and/or [Michael] as to the proper resolution of the differences on the Board and that they would maintain the status quo as regards the Certificates until after the exit of Durnont and other shareholders who were affected by the dispute". His submission was that in relation to the resolution of the differences on the Board the representation was not sufficiently pleaded or had not been breached. I do not accept that this is the right way to approach paragraph 52 of the APOC (see below). But if it were, the former seems to me to be a matter at best of particularisation – the gist of the allegation is clear that Durnont and PREI were lulled into not defending by assurances that Władysław and Michael would hold the position until the exit for the other shareholders. That allegation is clearly a matter for trial – in circumstances where the share certificates now no longer belong to PREI, regardless of whether at the time of the Default Judgment they were in the possession of M-JWK pursuant to the disputed Collateral Agreement, there is a real prospect of establishing a breach of this assurance by Władysław and Michael if they made it.

56. I do not, however, accept that it is right to approach this issue as if it was an allegation of misrepresentation under English law. The relevance under Polish law is whether PREI’s failure to defend the first proceedings broke the causal link between the unlawful conduct of the Defendants and the damage ultimately suffered by PREI (Koźmiński 2 at para 20-27, Bogdanska 2 at 5.12.2). I do not see why it is necessary to plead an explicit representation which PREI relied on, or to prove that it is untrue. It is a matter for trial precisely what is required to break the causal link – Bogdanska says that it requires a conscious and voluntary assumption by PREI of a risk of losing its assets if it did not. In my judgment paragraph 52 pleads sufficiently an alleged good reason why the causal link is not broken.

57. In any event, although Mr Hayman described paragraph 52 as “ the central complaint ” underpinning the Art 415 claim, that is not correct. The central complaint is that there was a fraudulent plan to expropriate PREI’s assets. The Article 415 claim would continue even if these words in paragraph 52 had not been pleaded. They are really an answer to a defence that the causal link was broken, which would ordinarily be found in the Reply. Early determination of expert evidence and factual disputes

58. The second category comprised submissions inviting me to accept as correct statements made by Professor Koźmiński which, it was said, had not been directly contradicted by Ms Bogdańska or alternatively, to resolve disagreements between the experts at this early stage.

59. Within this category fell, for example, Ms Bogdańska’s opinion that Władysław and Michael could be liable under Article 415 if they had used M-JWK “as a screen”, and Professor Koźmiński’s contrary view that the actions of M-JWK and Ms Bandurska were not “unlawful” for the purposes of Article 415. Which expert is correct is a matter for the trial judge, and there is no sound basis for making such evaluative findings now. There is, on the basis of the expert evidence, a serious issue to be tried on the Polish law claims against Władysław and Michael.

60. Thirdly it was submitted that the evidence is so clear that I should conclude that some of the pleaded factual contentions will fail. It was submitted the allegation that Władysław and Michael were able to control the portfolio companies and M-JWK through Ms Bandurska was unarguable. This seemed primarily based on Ms Bandurska’s evidence that she was the controlling mind of the portfolio companies and acted independently. However that evidence is clearly disputed by Durnont. Durnont has pleaded that Ms Bandurska is controlled or influenced by Władysław and Michael, that she has been put and kept in place by Władysław and Michael who control JWK and that she has taken steps consistent with the expropriation of PREI’s assets for their benefit. This is a disputed issue which requires trial and is not suitable for summary determination.

61. I conclude that, subject to the abuse of process argument I consider below, there is a serious issue to be tried as to whether Władysław and Michael are liable to PREI and/or Durnont for breach of the Polish Civil Code. E.2 Polish Law claim against M-JWK and Ms Bandurska – is there a serious issue to be tried? Is Article 416 sufficiently pleaded

62. The APOC asserts at paragraph 65(a) that Władysław and Michael, through their control or influence over M-JWK and Ms Bandurska (amongst others) perpetrated the alleged fraud. The APOC at paragraph 66(v) asserts that M-JWK is liable for the acts of Władysław and Michael in perpetrating the alleged fraud through it. The APOC at paragraph 66 (vi) asserts that M-JWK is also liable for the tortious acts of Ms Bandurska while she acted on behalf of M-JWK.

63. The experts agree that the actions and intentions of Władysław and Michael cannot be directly attributed to M-JWK because neither of Władysław and Michael had a formal role under its constitution. Ms Bogdanska’s evidence, however, is that as Ms Bandurska was a member of M-JWK’s management board, M-JWK is liable under Article 416 of the Polish Civil Code for Ms Bandurska’s tortious actions.

64. Mr Purchas’ first point is that properly construed, APOC paragraph 66(vi) (and the rest of this section of the APOC in relation to M-JWK and Ms Bandurska) does not expressly refer to Article 416 and must be referring to some other Polish law concept. In my judgment APOC paragraph 66(vi) pleads the effect under Polish law of Art 416 although it may be wide enough to encapsulate other applicable Polish law concepts. That is clear enough for this stage of proceedings. What meaning should be given to “in the premises” in the pleading?

65. The APOC at paragraph 67 asserts that Ms Bandurska at least suspected the fraud Władysław and Michael were perpetrating and gives particulars. At paragraph 68 it is asserted that she acquiesced and failed to stop or inform PREI of the wrongdoing of Władysław and Michael. Paragraph 69 then pleads that “ in the premises ” Ms Bandurska is liable to PREI pursuant to Article 415 and 422 of the Polish Civil Code.

66. Mr Purchas submitted that the Article 415 claim against Ms Bandurska was bound to fail. This submission was premised on an extremely narrow reading of the reference to “ in the premises ” in paragraph 69 as only referring to matters pleaded in paragraphs 67 to 69 as a whole. The only relevant plea in those paragraphs was that she concealed from PREI details relating to the bailiff sales.

67. Mr Purchas said there was little disagreement between the experts that the bailiff sales were part of an enforcement process operated through the State Treasury and that as a member of M-JWK’s governing body Ms Bandurska had a duty to act in the best interests of the company (including, Mr Purchas said, by enforcing the Default Judgment) and to preserve the company’s confidentiality. The short answer to this submission is that even on that narrow reading of the pleading Ms Bogdanska’s evidence is that a duty of confidentiality would not protect Ms Bandurska from a claim under Article 415, or justify her acting in bad faith. There is therefore a serious issue to be tried.

68. The slightly longer answer applies also to Mr Purchas’ complaint that paragraphs 67 to 69 contain insufficient detail of how Ms Bandurskais liable under Article 422. It seems to me that the APOC uses a common, if not necessarily advisable, drafting technique of using the words “ in the premises ” to capture the facts that have been pleaded in all the preceding paragraphs.

69. If read in that way it is beyond sustained argument that there is a serious issue to be tried as to whether Ms Bandurska is liable under Article 415 or 422. She is the controlling mind of all the portfolio companies, including M-JWK and PSPT who are alleged to be at the centre of the alleged fraud (the alleged elements of which are pleaded), it is alleged that Władysław and Michael have perpetrated this fraud through her and it is alleged that (as a minimum threshold which seems sufficient under Polish law) she at least suspected their wrongdoing. M-JWK and Ms Bandurska may say that if that is the way the pleading is to be read then it is not as clear as it could or should be what facts are relied on against which Defendants, but that is a matter that can be clarified by Part 18 requests if this claim progresses. No pleaded case on valuation

70. Mr Purchas says that there is no pleaded case that any of the Defendants interfered with the valuation by the Polish bailiffs of the certificates. That is correct but whether they did or did not is not an essential element of the fraud which is alleged. The fraud which is alleged is that the bailiff sales were part of the process by which the Defendants deprived PREI of its assets. There is also no dispute that M-JWK received the benefit of a statutory 25% reduction on the valuation of the certificates because it purchased them through the bailiff auction, and so acquired them for less than the valuation. Limitation

71. The basic limitation period for a claim under Article 415 is 3 calendar years. The parties agree that the relevant date under Polish law in this claim is 31 December 2018. There is a twenty year limitation for claims based on criminal conduct. Criminality is pleaded against Władysław and Michael but not against M-JWK or Ms Bandurska. Causes of action where time has started to run before 31 December 2018 against M-JWK or Ms Bandurska are therefore time barred.

72. There is no agreement between the experts on a number of aspects of the Polish law of limitation and how it might apply here. According to Ms Bogdanska time starts to run when the injured party could reasonably have learned (i) of the damage to the injured party (ii) the identity of the person liable for redress and (iii) that the injured party could establish “ the cause and effect relationship ”. The Defendants say that by 31 December 2018 the default judgment had been obtained and the Bailiff sales had taken place, and PREI and Durnont knew this. However Durnont says that PREI still owned all the certificates held outside the structure. The value of the certificates which had been acquired by M-JWK were within the structure and thus ultimately the full value remained with PREI. Therefore, Durnont says, they had not yet suffered damage and time had not started to run.

73. Mr Purchas’ submission was that under the terms of the structure a distribution by the Fund in respect of the certificates would result in a small amount of 1 or 2% leaving the structure and therefore that damage had been occasioned as soon as M-JWK purchased the certificates. I am not convinced that is the correct analysis of the structure, but in any event there would then arise a question as to whether this was damage for the purposes of Polish limitation and whether this was limitation as to the 1 or 2% of the value of the certificates sold to M-JWK said to have been lost, or 100% of the value of those certificates. Mr Purchas accepted that the Polish experts did not descend to that level of granularity and (even if this was a limitation point which was not affected by the other areas of dispute between the experts as to Polish law) it is not possible for me to conclude at this stage that there is no serious issue to be tried that there remains a claim which is not time barred. E.3 Polish Law claim against Fazita– is there a serious issue to be tried?

74. Fazita has not applied to strike out the Art 415 claim against it or for summary judgment. Mr Dawid submitted that if the applications of the other Defendants inviting the court to conclude that there is no serious issue to be tried in relation to the Polish law claims were successful, then the claim against Fazita was also bound to fail and the Court should dismiss the claim against Fazita or decline jurisdiction. As appears above, there is a serious issue to be tried on the Art 415 claims against all the Defendants. Subject to the abuse of process argument below, the applications of the other Defendants on this issue have not succeeded and nor does Fazita’s informal application to ride on their coattails. F. The Default Judgment claim – serious issue to be tried The pleaded case

75. Durnont’s pleaded case is in essence that (a) the default judgment was part of a fraudulent course of conduct on the part of Władysław and Michael which was fraudulently facilitated by Fazita, M-JWK and/or Ms Bandurska (APOC para 53(a)) (b) PREI agreed not to file a Defence on the basis of assurances and representations of an exit for all its shareholders, a resolution of board differences, and maintenance of status quo in the interim (APOC para 52) and (c) PREI did not know at the time of the Defendants’ intention to expropriate its assets. Durnont seeks the setting aside of the Default Judgment and restitution or compensation to PREI for the benefits received by M-JWK, Władysław and Michael for harm caused to PREI. The relevant principles

76. In Royal Bank of Scotland plc v Highland Financial Partners LP [2013] CLC 596 Aikens LJ summarised the legal principles to be applied if one party alleges that a judgment must be set aside because it was obtained by the fraud of another party. “The principles are, briefly: first, there has to be a ‘conscious and deliberate dishonesty’ in relation to the relevant evidence given, or action taken, statement made or matter concealed, which is relevant to the judgment now sought to be impugned. Secondly, the relevant evidence, action, statement or concealment (performed with conscious and deliberate dishonesty) must be ‘material’. ‘Material’ means that the fresh evidence that is adduced after the first judgment has been given is such that it demonstrates that the previous relevant evidence, action, statement or concealment was an operative cause of the court’s decision to give judgment in the way it did. Put another way, it must be shown that the fresh evidence would have entirely changed the way in which the first court approached and came to its decision. Thus the relevant conscious and deliberate dishonesty must be causative of the impugned judgment being obtained in the terms it was. Thirdly, the question of materiality of the fresh evidence is to be assessed by reference to its impact on the evidence supporting the original decision, not by reference to its impact on what decision might be made if the claim were to be retried on honest evidence.”

77. That passage was cited with approval by the Supreme Court in Takhar v Gracefield Developments [2020] AC 450 . Takhar is authority for the proposition that in a case where the evidence of fraud relied on was obtained by the litigant after the first action, the litigant’s claim to set aside the judgment or settlement of the first action is not an abuse of process even though the evidence of fraud could have been discovered with reasonable diligence in advance of the conclusion of the first action. Lord Sumption who gave one of the leading judgments in Takhar had expressed a provisional view as to the position in a case where fraud had been raised unsuccessfully in the earlier proceedings. In a passage which was obiter dicta he said: “ If decisive new evidence is deployed to establish the fraud, an action to set aside the judgment will lie irrespective of whether it could reasonably have been deployed on the earlier occasion unless a deliberate decision was then taken not to investigate or rely on the material.”

78. In Park v CNH Industrial Capital Europe Ltd [2022] 1 WLR 860 the Court of Appeal considered the application of the Highland principles to a default judgment. Mr Park, as director of the company through which he ran his farming business, entered into hire-purchase agreements with a finance company to finance the purchase of farm equipment. By mistake the finance company entered the details of a company which did not exist instead of the details of Mr Park’s company. When the error was spotted, after there had been a default, the finance company obtained Mr Park’s signature to a deed of rectification which provided that all references in the agreement to the non-existent company were references to him personally. When the finance company sued Mr Park personally he filed a hand written defence pointing out that the liability was his company’s and not his. However he later failed to file a pre-trial check list or to comply with an unless order and his defence was struck out. His application for relief from sanctions failed and the finance company obtained a default judgment against him. Mr Park brought a new action to set aside the default judgment, alleging that it had been procured by fraud and that he had been tricked into signing the deed of rectification. His evidence was that he was only presented with the final page of the document to sign and was told that it was a document to release any claim over some of the equipment to enable it to be sold. He would never knowingly have signed the deed of rectification, as the party to the hire purchase agreements was always intended to be his company and not Mr Park himself.

79. On an application by the finance company, the county court judge struck out the new action as an abuse of process on the ground that the facts on which it was based were known to Mr Park at the time of the original action. The Court of Appeal allowed Mr Park’s appeal.

80. Andrews LJ gave the judgment of the Court which concluded that the Highland principles were satisfied. She observed that a party who seeks to set aside a judgment for fraud must establish that both he and the court were deceived by the party in whose favour judgment was entered. Andrews LJ said that every request for a default judgment necessarily carries an implied representation of entitlement to judgment on the case set out in the particulars of claim. She observed that the Court had been deceived by the false statements in the Particulars of Claim and that this was an operative cause of the default judgment being entered.

81. The question which then arose was whether the judge’s decision that Mr Park’s claim to set aside the judgment for fraud was an abuse of process because he had known the relevant facts before the judgment was entered. The Court of Appeal concluded that the judge below had failed to follow Takhar , or more specifically the obiter comments of Lord Sumption in Takhar , and had reached the wrong conclusion.

82. In Finzi v Jamaican Redevelopment Foundation Inc [2023] UKPC 29 , the Privy Council also approved the Highland principles. The Privy Council reviewed Takhar and while not questioning the correctness of the decision in Park , disapproved the analysis in Park of the obiter comments of Lord Sumption in Takhar . The correct test for whether a claim to set aside a judgment or settlement for fraud is an abuse of process was stated to be thus: “The Board thus considers that, where a claimant relies on evidence not adduced in the original proceedings to allege that a judgment or settlement in those proceedings was obtained by fraud, the burden is on the claimant to establish (1) that the evidence is new in the sense that it has been obtained since the judgment or settlement, or (2) if the evidence is not new in this sense, any matters relied on to explain why the evidence was not deployed in the original action. Furthermore, where the evidence is not shown to be new in this sense, the claim is likely to be regarded as abusive unless the claimant is able to show a good reason which prevented or significantly impeded the use of the evidence in the original action.”

83. The Privy Council nevertheless confirmed that the decision in Park was correct: “ In Park, it was significant that Mr Park had attempted to raise the issue of fraud in the original proceedings but was prevented from doing so because a procedural default had resulted in an order debarring him from defending the claim. Furthermore, to enter a default judgment in this situation, the finance company had had to represent to the court that the facts stated in its particulars of claim were true. The Court of Appeal made positive findings that (1) the particulars of claim contained statements which the finance company knew to be untrue and (2) when the finance company represented to the court that it was entitled to enter judgment in default based upon the untruthful representations in its particulars of claim, it must have known that it was not entitled to do so (see paras 43-52). The default judgment which Mr Park was seeking to have set aside was therefore one which the Court of Appeal expressly found was obtained by dishonestly deceiving the court. In these circumstances bringing an action to set aside the judgment clearly could not be regarded as an abuse of the court’s process. On its facts, therefore, the conclusion reached by the Court of Appeal in Park, even though not the reasoning derived from Lord Sumption’s dicta in Takhar, was entirely justifiable.” F.1 The Default Judgment claim against M-JWK and Ms Bandurska – is there a serious issue to be tried?

84. Mr Purchas says that there is no serious issue to be tried against M-JWK or Ms Bandurska that the default judgment should be set aside for fraud. The Defendants say that the expert evidence supports their contention that as a matter of Polish law, M-JWK validly subrogated to the Bank’s debt and that the M-JWK Claim and Default Judgment are valid.

85. Mr Purchas, whose submissions on this issue were adopted by Mr Hayman, says that the pleaded allegations do not allege any deception of the court. In my view that adds an unnecessary gloss to the Highland principles. The question is whether there is conscious and deliberate dishonesty in the manner in which the matter was put before the court which caused the court to make the judgment it did. Although the cases have focussed on dishonesty in relation to the evidence given, or action taken, or concealment of information during the course of proceedings, there is a realistic argument that seeking a default judgment as part of a fraudulent plan is capable of satisfying that test. Such a fraudulent plan would raise the issue of whether the proceedings and the application for default judgment in furtherance of that plan undermined the integrity and coherence of the legal system and engaged the illegality principle; see Lewis-Ranwell v G4S Health Services (UK) Ltd and others [2026] UKSC 2 ; [2026] 2 WLR 187 at [112] to [120]. There is a realistic argument that the fraudulent plan (if proved) is conscious and deliberate dishonesty which has caused the court to make the judgment it did.

86. In any event, there is a realistic argument that the alleged debt was fraudulently generated by discharging the Bank’s debt and that the debt on which the default judgment is based is invalid or is offset by a cross claim under Polish law in respect of the dishonesty. There is a realistic argument that by issuing a Claim Form verified by a Statement of Truth and then seeking default judgment, M-JWK was dishonestly representing to the Court, and deceiving it, that there was a legitimate debt which PREI needed to pay.

87. Mr Purchas’ next point is that as a matter of law any dishonesty by Władysław and Michael cannot be attributed to M-JWK under Polish law. The short answer to that point is that, as discussed above, Ms Bandurska’s knowledge and actions are attributed to M-JWK, and Durnont’s pleaded case is that Władysław and Michael perpetrated this fraud through her and her control of M-JWK. The fact that Władysław and Michael’s actions and knowledge are not directly attributed to M-JWK is not an answer to this claim.

88. Mr Purchas also submitted that there was no new evidence, or at least no new evidence not merely “ going in the same direction ” ( Takhar at [34] and [35]) as the matters which PREI knew at the time of the default judgment, within the first limb of Finzi . It does seem from the evidence filed in the jurisdiction dispute at the time of the first proceedings that PREI believed the default judgment was a dishonest attempt to seize greater control of PREI and/or its assets. What is unclear is what evidence there was at that time to support that belief – there are merely bald statements of that belief in the witness statements. There is a realistic argument that there is new evidence from the events which occurred after the default judgment leading to the expropriation of PREI’s assets, that the default judgment was itself obtained as part of a plan to fraudulently expropriate PREI’s assets. Whether that is merely evidence going in the same direction as the matters which PREI knew at the time of the default judgment requires a much closer examination of what PREI knew, which cannot be done at this stage.

89. Mr Purchas says that PREI made a conscious and deliberate decision not to rely upon the evidence at trial. Neither Takhar nor Finzi decides that a conscious and deliberate decision not to rely on evidence at the time of the first proceedings inevitably makes an attempt to do so in subsequent proceedings an abuse of process. Nor does Finzi say that the only way of showing that subsequent proceedings are not an abuse of process is by showing that the litigant was prevented or significantly impeded from deploying that evidence in the earlier proceedings. There clearly needs to be something significant which makes the subsequent attempt to deploy evidence more than merely an attempt to relitigate the issue or to have a second bite at the cherry and which overrides the imperative for finality in litigation. There is in my judgment a realistic argument that the assurances and representations of Władysław and Michael which persuaded PREI not to defend the proceedings could constitute a sufficient good reason for not deploying those matters in defending the default judgment particularly if those representations were dishonest and false.

90. I conclude that there is a serious issue to be tried in relation to the claim to set aside the default judgment for fraud and to seek restitutionary relief or compensation from those who it is alleged have benefitted from it. F.2 Default judgment claim as it relates to Władysław and Michael – is there a serious issue to be tried?

91. The claim to set aside the default judgment and for restitution of all benefits flowing from it is brought against M-JWK as the party who obtained the default judgment and against Władysław and Michael as the individuals, as part of whose fraudulent plan to expropriate PREI’s assets, the default judgment was obtained. Mr Hayman says Władysław and Michael are not proper defendants to the claim to set aside default judgment, but they clearly are as they need to be bound by the decision to set aside the default judgment if restitution is sought from them of benefits they have received from it. G. Abuse of Process - are the proceedings an abuse of process unless and until the Default Judgment is set aside?

92. Mr Purchas (supported by Mr Hayman) submitted that the default judgment was a final judgment for these purposes and unless and until that judgment had been set aside it was an abuse of process to attempt to raise in these proceedings matters which were, or should have been raised in those proceedings. This he said included the Polish law claims relating to M-JWK’s subrogation to the Bank’s debt. He relied on the well known passage in Lord Diplock’s speech in Hunter v Chief Constable of the West Midlands Police at 541B which said that it is an abuse of process to issue new proceedings which mount a collateral attack on a previous final decision where the intending claimant had a full opportunity of contesting the previous decision.

93. Mr Hayman also submitted that there could be no claim against his clients for unjust enrichment arising from the Default Judgment until the Default Judgment had been set aside; see Gibbs v Lakeside Developments Ltd (CA) [2018] EWCA Civ 2874 , [2019] 4 WLR 6 at [10]-[21].

94. Mr Purchas accepted that this was a point about timing. He accepted that if the Default Judgment was set aside, as Durnont seeks to do by these proceedings, then there would be no abuse of process in Durnont bringing a claim based on the alleged impropriety of M-JWK’s actions in repaying the Bank and subrogating to its debt against PREI. There would also be no abuse in Durnont bringing a claim for restitution arising from the Default Judgment. His point is that until the validity of the Default Judgment is determined it is an abuse of process to raise the issue. There is no authority relied on for that point.

95. This claim is not a collateral attack on the Default Judgment. Durnont seeks to set the Default Judgment aside for fraud, and if successful then it seeks to litigate the Polish law and other claims in respect of which there is presently a res judicata . That is a legitimate direct challenge to the validity of the Default Judgment and the raising of claims consequent and conditional on its success. I do not see anything in this case which makes that conduct an abuse of process. At the very least there is a serious issue to be tried as to whether Durnont’s conduct is not an abuse of process.

96. In Tinkler v Esken Ltd [2023] EWCA Civ 655 , Mr Tinkler brought a claim to set aside the judgment of Judge Russen on the basis that it had been obtained by fraud. Leech J rejected Mr Tinkler’s claim. Mr Tinkler appealed asserting that the approach of Leech J was mistaken in that he heard the new evidence and then considered whether Judge Russen’s findings could stand in the light of them. While upholding Leech J’s decision the Court of Appeal made clear that the only focus of a claim to set aside a judgment for fraud is whether the judgment was procured by fraud. In a decision which preceded the Privy Council decision in Finzi by a month, Vos LJ said: “The judgments in Flower show, as Lord Sumption in Takhar also made clear, that it is the fraud and the materiality that need to be proved (see also Lord Buckmaster in Jonesco v. Beard [1930] AC 298 at pages 300-1). It must be shown that the judgment was obtained by the fraud, and that the court was induced to make a potentially wrong judgment by the fraud. The party that lost as a result of the fraud must prove the fraud “wholly free from … any of the matters originally tried” Later he said: “ The factual issues tried by Judge Russen ought only to have been re-considered in detail if the fraud action had succeeded before the judge, if Judge Russen’s judgment was set aside, and when a new trial of those issues was ordered”.

97. Here there were no factual issues tried and there are no findings of the Court granting default judgment. If the default judgment is set aside there is no new trial to be ordered. There is no principled reason why it is not open for the court to go on to consider the claims and remedies consequential upon the default judgment being set aside. Whether the issue of fraud should be determined as a preliminary issue is essentially a case management issue – I see no abuse of process in raising the consequential issues in the same claim. H. The SSA claim against Fazita- a serious issue to be tried?

98. The relationship between the parties is, at least in part, governed by the SSA. Under the SSA, the parties to it agreed the terms upon which the Bank would subscribe for convertible bonds, and the terms upon which the joint venture between them would be conducted. Certain of the provisions of the SSA also regulate the governance and management of the Company.

99. Durnont seeks to bring a claim against Fazita for breach of the SSA.

100. Clause 24.1 of the SSA provides that: “ Each of the parties (other than [PREI]) undertakes to the others that he will exercise all powers and rights available to him as a director, officer, employee or shareholder in [the Company] (or in any other Group Company) in order to give effect to the provisions of this Agreement and to ensure that [PREI] complies with its obligations under this Agreement.”

101. Durnont says that on the true construction of clause 24.1, each shareholder undertook to the other shareholders in PREI, including Durnont and PREI itself that it, or any person or entity appointed by it controlled or influenced by it or acting on its behalf in the capacity of director, officer, shareholder or employee of any entity within the Fund and/or holding assets of the Fund: (1) would act in good faith in the best interests of the joint venture and of the members of PREI; and (2) would comply with their fiduciary duties and other duties arising by virtue of their position as director, officer or shareholder of any entity within the Fund.

102. Alternatively, it is said that these terms were implied terms of the SSA. Further or alternatively, it is said that on the true construction of the SSA, the shareholders agreed to act honestly and transparently in their dealings with the Company and its assets. Alternatively, that this was an implied term of the SSA.

103. Fazita has applied to strike out this claim, alternatively for summary judgment dismissing it. The Court may strike out Particulars of Claim under CPR rule 3.4(2)(a) if it appears to the Court that, even if the facts pleaded are assumed to be true, they “ disclose no reasonable grounds for bringing […] the claim ”. Under CPR rule 24.3, the Court may give summary judgment against a claimant on the whole of a claim or an issue if Durnont “ has no real prospect of succeeding on the claim […] or issue ” and “ there is no other compelling reason why the case or issue should be disposed of at a trial ”. The test is materially the same as for striking out, save that the Court is not required to assume the truth of the pleaded facts : Allsop v Banner Jones [2021] EWCA Civ 7 at [7].

104. In EasyAir Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15] Mr Justice Lewison summarised the relevant principles: “ The correct approach on applications by defendants is, in my judgment, as follows: i) The court must consider whether [the claimant] has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman [2001] 2 All ER 91 . ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]. iii) In reaching its conclusion the court must not conduct a “mini- trial”: Swain v Hillman. iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]. v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550 . vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co Ltd [2007] FSR 63 . vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725 .”

105. Mr Dawid says the relevant factual matrix is pleaded at paragraphs 15 to 17. Those paragraphs assert that this structure was carefully designed so that PREI did not have a direct interest in, or control of, the portfolio companies which were to be controlled by Władysław and Michael and entities owned or controlled by them. It is asserted that it was intended and understood that Władysław and Michael would exercise that control for the benefit of PREI and were trusted to do that. Mr Rothe gives evidence as to the long standing nature of what he says was the joint venture from the late 1990s, how this was based on a division of responsibility, and that it was based on what he says was a “ trustworthy business relationship ” between Mr Steimler and Mr Gram and Władysław Jaroszewicz and a “ close personal friendship ” between Mr Steimler and Władysław Jaroszewicz.

106. Under the articles of association Fazita and Sazia on the one hand and Durnont on the other have effectively a veto as to decision making at shareholder level and their appointed directors have effectively a veto over decision making at director level. On the face of it PREI has been structured on the basis and expectation that the parties will cooperate with each other. If they do not then the company will be deadlocked Clause 11.8 of the SSA purports to regulate Board meetings and 11.8(g) varies the quorum for Board meetings to 50% of the Board rather than the 2 required by the Articles of Association. Mr Dawid suggested that on one reading of clause 11.8 of the SSA, and depending on the number of directors appointed, there existed a possibility of one side or the other changing with the Bank’s cooperation the quorum provision in clause 11.8, but that loophole (if it exists) does not undermine the intention apparent from the SSA and the Articles of Association. I doubt whether any such variation could override the deadlock provisions in the Articles of Association, but it is not necessary to decide the point. .

107. If that is the context, namely a longstanding joint venture relationship based on trust, and a structure where PREI can only operate by mutual co-operation, and which relies upon trust in Władysław and Michael for PREI’s control of the portfolio companies, then there is a realistic argument that this is a relational contract in which a duty of good faith is readily implied. In Yam Seng Pte Ltd v International Trade Corp Ltd [2013] 1 All ER (Comm) 1321 Leggatt J said (at [142]): “Such ‘relational’ contracts, as they are sometimes called, may require a high degree of communication, co-operation and predictable performance based on mutual trust and confidence and involve expectations of loyalty which are not legislated for in the express terms of the contract but are implicit in the parties’ understanding and necessary to give business efficacy to the arrangements. Examples of such relational contracts might include some joint venture agreements, franchise agreements and long-term distributorship agreements ”

108. There is also a realistic argument that Fazita has breached that duty of good faith. Durnont’s primary claim for breach is based on the contention that where Clause 24.1 refers to each party exercising all powers and rights available to it as a director, officer, employee or shareholder in PREI to comply with the SSA, this extends to the conduct of directors appointed by that party. In my judgment there is an argument with a real prospect of success that this is correct. If so, then it is clearly arguable that Fazita has breached the SSA by virtue of the allegedly fraudulent conduct of Władysław/Michael.

109. There is also an argument that Fazita has independently breached the SSA. There is a realistic argument that Fazita has breached the SSA by not seeking to remove Władysław and Michael as directors of PREI if it was on notice of the alleged fraud. The APOC pleads, and it is not disputed, that Fazita joined with Władysław in obtaining an injunction in Cyprus against PREI and Durnont and others to prohibit the implementation of a resolution of the Board which would have allowed PREI to defend the M-JWK Claim. Very little has been said as to why this was done - in theory Fazita had the same interest as Durnont and PREI in resisting M-JWK’s claim. It is not clear what the directors of Fazita understood or knew about the proceedings or who gave instructions on behalf of Fazita in relation to the proceedings. If Durnont establishes the alleged fraud then Fazita is arguably in breach of the SSA for its role in hampering PREI’s defence of the first proceedings. It is also alleged that Fazita was a conspirator in the alleged fraud and that Fazita concealed the bailiff sales from PREI. Mr Dawid complains that it is not pleaded how Fazita could have known about the bailiff sale but no evidence has been filed by Fazita as to its state of knowledge and the facts alleged in the APOC have to be treated as true.

110. Mr Dawid sought to raise other arguments against these conclusions. I do not think Durnont’s case is any less arguable because there are 19 minor shareholders in PREI who are not parties to the SSA. I do not see why there could not be a joint venture between some but not all of the shareholders. Nor does clause 8.9 of the Share Purchase Agreement The Share Purchase Agreement is part of the suite of documents executed with the SSA and is defined as forming part of the entire agreement in the SSA by clause 31 of the SSA. By the Share Purchase Agreement by the Bank acquired its shares in PREI and received warranties from the parties to it . affect the arguability of Durnont’s claim. That provision stated that PREI was not a member of a joint venture but Durnont’s case is that there was a joint venture between some of the shareholders in PREI.

111. Mr Dawid submitted that the Court should “ grasp the nettle ” at this hearing and determine the question of construction of clause 24.1. I decline to do so. I do not have all the evidence necessary for the proper determination of this question. I have assumed that the facts stated in the APOC are true but the factual matrix as found by the trial judge may be different. I am however satisfied that there is a serious issue to be tried as to the SSA claims. I. Breach of fiduciary duty by Władysław and Michael – a serious issue to be tried?

112. Paragraph 73 APOC pleads that the conduct of Władysław and Michael which had already been referred to in the pleadings amounted to a breach of their fiduciary duties as directors of PREI. Paragraph 74 pleaded that those breaches were deliberate and in the knowledge that they were contrary to the interests of PREI and its shareholders, and therefore dishonest.

113. Władysław and Michael say that the pleadings do not provide appropriate particularisation of which of the acts or omissions of Władysław and Michael which are pleaded in paragraphs 33 to 65 are said to amount to a dishonest or deliberate breach of fiduciary duty. I do not agree. Władysław and Michael know with some clarity the case they have to meet. It is alleged that they have orchestrated a fraudulent plan to expropriate PREI’s assets for their personal benefit, and that this constitutes a breach of their fiduciary duties as director and alternate director of PREI. If they genuinely need to pin down which factual assertions relate to which of the claims against them, they can do so in due course by an appropriate request. J. Full and frank disclosure Principles

114. The relevant principles are not in dispute. I summarised them in Okuashvili & ors v Ivanishvili & ors [2025] EWHC 829 (Ch) as follows: “84. An applicant for an order on a without notice application must make full and frank disclosure of all material facts; Brinks Mat Ltd v Elcombe [1988] 1 WLR 1350 at 1356G. The material facts are the facts which might reasonably be taken into account by the judge in deciding whether to grant the application; MRG (Japan) Ltd v Engelhard Metals Japan Limited [2003] EWHC 3418 at [23]. It is for the court to determine what is material according to its own judgment and not by the assessment of the applicant or his legal advisors; Brinks Mat at 1356H. If the court considers there to have been material non-disclosure it is not an answer that the applicant in good faith took a different view; MRG at [24]. The applicant must make proper inquiries before making the application. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries; Brinks Mat at 1356H. The duty is not confined to the applicant’s legal advisors but rests upon the applicant itself; Fundo Soberano de Angola v Dos Santos [2018] EWHC 2199 at [53]. Although expressed as a duty of disclosure, the ultimate touchstone is whether the presentation of the application is fair in all material respects; Fundo Soberano at [52].

85. In an application for permission to serve out of the jurisdiction, the focus of the inquiry is whether the Court should assume jurisdiction over a dispute. The Court needs to be satisfied that there is a serious issue to be tried; that there is a good arguable case to hear it; and that England is clearly the appropriate forum. Beyond this, the Court is not concerned with the merits of the case; MRG at [26]. There is no duty to disclose facts which could not on any reasonable view affect the judge in deciding those questions; MRG at [30].

86. A failure to comply with the duty of full and frank disclosure on applications for permission to serve out is very serious – an individual or entity has been subjected to the Court’s jurisdiction and exposed to costs without an opportunity to be heard; The Libyan Investment Authority v JP Morgan Markets Ltd [2019] EWHC 1452 at [120]. The Court has a discretion: (a) to set aside the order for service and require a fresh application; or (b) to treat the claim form as validly served and deal with non-disclosure if necessary by a costs order; see NML Capital Limited v Republic of Argentina [2011] UKSC 31 : [2011] 2 AC 495 at [136]. Such is the importance of the duty that in the event of any substantial breach the Court inclines strongly towards setting aside the order and not renewing it, even where the breach is innocent; Banco Turco Romana SA (in liquidation) v Cortuk [2018] EWHC 622 at [45]. Where the breach is deliberate, the conscious abuse of the Court’s process will almost always make it appropriate to impose the sanction; Banco Turco at [45]. The sanction operates not only to punish the applicant for the abuse of process but also to ensure others are deterred from such conduct in future; Banco Turco at [45].”

115. To that summary should be added the observations in Mex Group Worldwide Ltd v Ford ( CA) [2024] EWCA Civ 959 , [2025] 1 WLR 975 at [121] that to justify setting aside an ex parte order the breaches must be material and any assessment of the breach must be proportionate. Ultimately in considering whether to discharge the order and/or renew it, the court will always be guided by the interests of justice. Only clear-cut and obviously important breaches which really matter should be relied upon ; Mex Group at [112] and [128]. The alleged failures

116. There are a variety of alleged failures to make full and frank disclosure. I will discuss the individual alleged failures first and consider them cumulatively at the end.

117. Durnont’s expert at the hearing before the Deputy Judge was Mr Pawel Moskwa, an advocate and partner in the firm of MJH Moskwa. Mr. Moskwa’s evidence was prepared as an independent expert with the appropriate declaration to that effect in accordance with the requirements of CPR Part 35. When they were served with these proceedings the solicitors to M-JWK and Ms Bandurska pointed out that Mr Moskwa was not independent, but was Durnont’s lawyer acting for Durnont in a number of claims in Poland. This elicited an apology in a witness statement by Mr Alun-Jones, an acknowledgment that this should have been drawn to the attention of the Deputy Judge and a statement that this was an inadvertent omission which was not deliberate or with malicious intent. It is the Defendants’ position that, while they do not assert that this was a deliberate misleading of the Court by the lawyers, this was nevertheless information which must have been known by Durnont, and it is an egregious failure to give full and frank disclosure which is on its own sufficient to engage the court’s punitive jurisdiction. It is Durnont’s position, which I accept, that although not independent, Mr Moskwa’s evidence was nevertheless honest, impartial and accurate.

118. Mr Purchas also relied upon the failure of Mr Moskwa to identify in his report that the allegation in the Particulars of Claim that the dishonesty of Władysław and Michael could be attributed to M-JWK was not correct under Polish law. That was how the claim appears to have been put to the Deputy Judge at the hearing, although the pleaded case also relies (correctly under Polish law) on the attribution of Ms Bandurska’s knowledge and wrongdoing. This would include an attribution of her knowledge of Władysław/Michael’s dishonesty if that were established. Knowledge of the correct position as to attribution will still have led to the conclusion that there was a serious issue to be tried against M-JWK. There has been a failure to draw attention to a relevant point of Polish law, but it would have made no difference to the Deputy Judge.

119. Mr Purchas also relied upon the absence of any explanation, either by Mr Moskwa or in Durnont’s evidence, that the court bailiff process in Poland was independent, that the bailiffs are independent emanations of the Polish state, and the valuation of the Certificates for the purposes of the auction was undertaken by or on behalf of the bailiffs. These points were important, he says, to show that the bailiff process was not interfered with by Władysław and Michael and that the independent valuation of the certificates casts doubt on Durnont’s assertion that they were worth 100 million euros or the thesis that there must have been a fraud. I do not think there is anything in this point. Again I do not think the evidence of the independence of Court bailiffs is anything other than what an English judge would assume. Mr Purchas accepts that the fact that the bailiff process is an independent process does not mean that it cannot be interfered with or that the valuation is accurate. At the very least the effect of the bailiff auctions is that M-JWK was able to acquire the Certificates at a 25% discount to the valuation. Perhaps the bigger point is that Durnont asserts that M-JWK has bought PREI’s Certificates effectively using PREI’s money as M-JWK was part of a structure almost wholly owned by PREI. I do not consider information about the independence of the bailiff process in Poland was information which needed to be disclosed as part of the duty of full and frank disclosure.

120. Mr Purchas also relied on the absence of any explanation in Mr Moskwa’s expert report that Ms Bandurska’s duties as a member of its management board included acting in its best interests. That seems a similar position to that under English law and would have come as no surprise to the Deputy Judge. There is a dispute as to the significance of this duty under Polish law and whether it absolves Ms Bandurska of wrongdoing in relation to the enforcement of the Default Judgment and the failure to inform PREI of the bailiff sales. Ms Bogdanska says it does not. Mr Purchas contends that it does and provides clear defences for Ms Bandurska, although as far as I can see this is primarily based on Ms Bandurska’s evidence being accepted when she says that she believed she was acting in M-JWK’s best interests. What has happened is that money in the hands of M-JWK which was intended to be used to discharge PREI’s debt to the Bank without creating any liability on the part of PREI to reimburse M-JWK has been applied in a way which has created under the operation of Polish law a debt by way of subrogation to M-JWK. There must in such circumstances be a real question as to whether it was in the best interests of M-JWK to obtain a judgment in respect of that debt and to seek to enforce it. I was shown advice from KPMG which suggested that even after the subrogation there were a number of options for regularising the position as between PREI and M-JWK which did not involve the course taken by M-JWK. There is clearly an issue to be tried here. I do not consider that there is any failure to make full and frank disclosure here.

121. Mr Purchas says that in relation to default judgment the key authorities of Takhar v Gracefield Developments [2020] AC 450 and Park v CNH Industrial Capital Europe Ltd [2022] 1 WLR 860 were not placed before the court and there was no explanation of some of the elements of the test outlined in Highland Partners . In fact Highland Partners was referred to in Mr Riches’ skeleton argument and it is plain from the transcript that the judge had read it in advance of the hearing as he discussed the differences between that case where there had been a decision on the merits and this one where there is a default judgment. Mr Riches confirmed, and Mr Purchas accepted, that the judge was referred to Takhar during the course of the hearing. In his judgment the Deputy Judge cites Highland Partners, Takhar and Park (which he had found from his own researches). He summarised the key elements of the Highland Partners test and applied it. Mr Purchas’ submission of a failure to make full and frank disclosure is therefore technical and without real substance. The judge had the necessary authorities and rightly concluded that there was a serious issue to be tried. Disclosure of Park by Durnont, and leading the judge through the relevant principles in the authorities, may have at best saved the judge some time, but would have made no difference to the outcome.

122. Mr Dawid’s criticism is that the judge should have been told expressly that the provisions of clause 12 of the SSA to which he was referred were stipulated by clause 12.12 to be for the benefit of only the Bank. Clause 12 identifies certain reserved matters which will not be undertaken without both the Bank’s consent and a shareholder resolution with a minimum 90% majority of shareholders voting. Clause 12.7 made the disposal by a portfolio company of a substantial part of its business a reserved matter. The judge was referred to this clause in relation to the disposal of the Bialystok mall where, while it seems the Bank may have known and approved of the proposed sale of the mall, the terms of clause 12 were not otherwise complied with. Mr Dawid’s position appears to be that the effect of clause 12.12 is that only the Bank can complain of a breach of clause 12 and that had this been drawn to the judge’s attention it would have affected his view that it was arguable that this was a relational contract. It is certainly less than clear what the effect of clause 12.12 is on the right of the other parties to complain of a breach. Mr Riches accepts that on reflection it ought to have been drawn to the judge’s attention, and he has apologised for not doing so. However, the significance here was in the failure to comply with clause 12, not who could complain of it. The point being made by Mr Riches was that the failure to comply with it was part of a fraudulent course of conduct pursuant to which the Bank would be secretly bought out from the proceeds of sale of the mall. Further, clause 12 was not material to the issue of whether this was a relational contract – the judge considered that there was nothing express in the SSA which negated it being a relational contract, but that a prima facie case was supplied by the evidence of Mr Rothe.

123. Mr Dawid raised two other points in his skeleton argument. The first is that various points should have been made about Władysław and Michael not being directors of Fazita, or agents of Fazita, or Fazita’s appointed directors under the SSA. These points are not significant. Durnont pleaded the structure of Fazita and the indirect interest of Władysław and Michael in it as beneficiaries of a Jersey trust. Nevertheless Durnont contends that Fazita was Władysław and Michael’s creature and under their de facto control. The pleaded claim is not based on Władysław and Michael having legal control over Fazita, it being clear from the nature of the pleaded structure that it is not. The other points are also not significant. Władysław has acted, and Fazita has held him out, as Fazita’s appointed director of PREI. I do not consider the failure to identify the argument now raised by D1 as to whether he was technically correctly appointed, is a failure to make full and frank disclosure. I do not consider the failure to identify what evidence Durnont had available to prove that Władysław and Michael were Fazita’s agents is a failure to make full and frank disclosure. The facts stated in the pleaded claim are assumed to be true and set the parameters for the judge determining the application for service out. The pleaded claim raises a serious issue to be tried as against Fazita.

124. Mr Hayman raised a further point on which he said there had not been full and frank disclosure. There was before the judge an application for permission to amend the Particulars of Claim to add new paragraphs 62A and 62B pleading the events surrounding the claim which had been brought by PSPT and the default judgment it obtained. That application was supported by a witness statement of Mr Alun Jones who at paragraph 36 said that the PSPT fraud was simply a further example of the Defendants’ fraudulent action and did not add any new cause of action, but that if it did CPR 17.4 would apply and the amendment should be permitted as arising out of the same or substantially the same facts as already in issue. No relief is sought in the APOC in respect of the matters pleaded in paragraphs 62A and 62B. The judge’s order of 8 June 2023 gave Durnont permission to amend. It also gave the Defendants permission to set aside or vary the order under CPR Part 11 or CPR 23.10.

125. Mr Hayman says that paragraphs 62A and 62B introduced new allegations of breach; either of Article 415 or breach of fiduciary duty and that it is at least obviously arguable that they raise a new cause of action. Mr Hayman referred to Diamandis v Wills [2015] EWHC 312 where at paragraph 48 Mr Stephen Morris QC summarised the analysis of Longmore LJ in Berezovsky v Abramovich [2011] 1 WLR 2290 as to what amounts to a new cause of action . That summary identified that an amendment to plead new or different loss from the same cause of action and same breach did not amount to a new cause of action but new loss arising from a different cause of action or a different breach might do.

126. There are a number of problems with Mr Hayman’s submission. Firstly, it is made as a ground for setting aside the judge’s order in its entirety for a failure to make full and frank disclosure. Yet it is unclear to me what it is that it is said was not disclosed to the judge in the witness statement of Mr Alun Jones. Secondly, the judge’s order gave the Defendants permission to apply to set aside or vary the order and they have done so. This is the hearing of their application. Yet no application has been made to set aside the order for permission to amend and to disallow the amendments as not satisfying the test in CPR 17.4. Władysław and Michael’s position in their skeleton argument and oral submissions appears to be, in the alternative, if the judge’s order for service out of the jurisdiction is not set aside then the amendments should be disallowed, presumably for a failure to make full and frank disclosure, and Durnont made to reapply “ so that the limitation issues can be properly argued ”. That is flawed – this hearing was the hearing at which those limitation issues needed to be argued out, and they have not been. Mr Hayman has simply sought to establish that it is at least arguable that paragraphs 62A and 62B raise a new cause of action.

127. The final problem is that it seems to me that Mr Alun Jones’ analysis was correct. Paragraph 62A and paragraph 62B plead further steps which have been taken as part of the implementation of a fraudulent plan to expropriate PREI’s assets. It is the fraudulent plan and its implementation which constitute the breach of Art 415 or fiduciary duty, not any particular individual steps. So the amendment does not plead a different cause of action or a different breach. Moreover, no separate relief is sought in respect of the matters pleaded in paragraph 62A and 62B. No new or different loss is said to have occurred. Paragraphs 62A and 62B therefore do not raise a new cause of action, and if they did they would arise out of the same or substantially the same facts.

128. In conclusion most of the alleged breaches of the duty of full and frank disclosure are not breaches of the duty of full and frank disclosure at all, or are trivial failures which made no difference to the order the judge made. The most significant is the failure to identify that Mr Moskwa was not an independent expert. I accept that this was a failure to disclose information which was material. However, I am also satisfied that Mr Moskwa’s evidence was nevertheless impartial and accurate and provided a proper underpinning for the judge’s decision. In this case it would be a disproportionate and unjust result to set aside the orders made by the judge because of the alleged failures to make full and frank disclosure taken together and in the exercise of my discretion I decline to do so. K. Gateways

129. Fazita is an anchor Defendant for Durnont. The SSA claim against Fazita does not require permission for service out of the jurisdiction. Fazita accepts that if there is an arguable case in respect of the SSA claim then the Article 415 claims against it fall within the gateway in CPR PD6B paragraph 3.1 (4A) (a further claim against Fazita arising out of the same or closely connected facts). I have rejected the Defendants’ contention that there is no arguable case in respect of the SSA Claim. Władysław and Michael have not sought to argue that in these circumstances they are not necessary and proper parties to each of the SSA Claim and the Art 415 claim for the purposes of the PD6B paragraph 3.1 (3) gateway (subject in respect of the Article 415 claim to their contention that England is not the appropriate forum).

130. M-JWK and Ms Bandurska raised in oral submissions, but not in their skeleton argument, a dispute that there was a common thread running through the claims against Fazita and the claims against them. The common thread seems to me to be the alleged conspiracy. The real issue to be tried is whether the Defendants, led by Władysław and Michael, acted in concert to execute a plan to expropriate PREI’s assets. On Durnont’s case the actions of M-JWK and Ms Bandurska in implementing that conspiracy are breaches of the SSA and Article 415 by Fazita. M-JWK and Ms Bandurska are therefore necessary and proper parties to the claims against Fazita. The same core facts, witnesses and contemporaneous documents underpin both the SSA and the Polish law claims (as well as the Default Judgment and Fiduciary Duty claims); trying them together is therefore reasonable and just.

131. It is not necessary to consider Durnont’s fallback argument that the Article 415 claims fall within the wording of the exclusive jurisdiction clause in the SSA.

132. As I understood Mr Dinsmore’s submissions, if I find, as I have, that Fazita is an anchor Defendant for all the Defendants, Durnont’s alternative contention that M-JWK was an anchor Defendant in respect of the default judgment claim, does not arise. It is not clear from their skeleton arguments and oral submissions whether the Defendants accept that position. It is not clear whether they contend that the claim against Władysław, Michael and M-JWK in respect of the default judgment depends upon there being a claim against M-JWK to set aside the default judgment which itself can be served out of the jurisdiction. For this reason I go on to consider Durnont’s alternative case in respect of M-JWK.

133. Durnont’s primary case before me was that permission to serve out of the jurisdiction on M-JWK was not required in respect of the Default Judgment claim because M-JWK had submitted to the jurisdiction in bringing the M-JWK Claim and obtaining Default Judgment in it. The Defendants dispute this, on the basis that the Default Judgment claim is a separate cause of action which is brought in separate proceedings.

134. When M-JWK brought the proceedings which resulted in the Default Judgment it submitted to the jurisdiction of the courts of England and Wales in respect of all matters incidental to the claim and the judgment and orders it obtained; see Vik v Deutsche Bank [2018] EWCA Civ 2011 at 55 per Gross LJ. This is why counterclaims which could be brought against a claimant within the jurisdiction can be brought against a claimant not within the jurisdiction, even if permission to serve the same as a freestanding claim against that claimant would not pass through any of the gateways in CPR PD6B paragraph 3.1; see Dicey & Morris (16 th ed) at 11-064. Such counterclaims are proper incidents of the litigation in respect of which the claimant has submitted to the jurisdiction. An incident of an order or judgment obtained by a claimant is that an affected party can appeal or apply to set aside or vary in accordance with the law and procedure of this jurisdiction. Applications to vary interim orders, made during the course of proceedings, in accordance with provisions of the CPR like CPR 3.1(7) or CPR 23.8(3), are obviously incidents of the order obtained. They are part of the case management of the proceedings. It is common ground, in relation to an appeal, that a claimant’s submission to jurisdiction is a submission to jurisdiction in respect of an appeal. In my judgment it must also be a submission to jurisdiction in respect of an application to set aside or vary a default judgment pursuant to CPR 13. An application to set aside under CPR 13 is a clear incident of the default judgment process the claimant has used. An application to set aside an order or judgment for fraud is a separate cause of action, and is neither an appeal, nor an application under a specific provision of the CPR. Nevertheless it is just as much an incident of the order or judgment as an appeal or some other application to set it aside or vary it. If our procedural rules dictate that such an application should be made by separate action rather than by an appeal or an application made within the same proceedings that does not affect the fundamental point that it is an application which is properly incidental to the judgment in respect of which the original claimant submitted to jurisdiction. In my judgment M-JWK has submitted to jurisdiction in respect of Durnont’s claim to set aside the default judgment and no permission of the court is required to serve that claim out of the jurisdiction.

135. It is not necessary to consider Durnont’s submission that M-JWK has also submitted to the jurisdiction in respect of the issue which is the subject of the Default judgment claim by bringing fresh proceedings in 2022 seeking a declaration that the Default Judgment is valid.

136. It is not necessary to consider Durnont’s alternative case (accepted by Deputy Judge Tom Smith KC) that the default judgment claim was a claim for restitution which fell within CPR PD6B para 3.1(16).

137. M-JWK is therefore an anchor defendant in relation to the claims against Władysław and Michael and they are necessary and proper parties to the Default Judgment Claim. L. Forum – is Poland or England and Wales the clearly more appropriate forum?

138. This is a mixed service in and service out case and I look at the matter holistically. The Defendants say that Poland is the more appropriate forum and there are clearly significant connections with Poland for the Polish Law claims. There are significant connections with England and Wales in respect of the SSA Claims and the Default Judgment claims. The Fiduciary Duty claims have a greater connection with England and Wales than Poland, because there is a significant overlap with the SSA claim, and because the relevant Cypriot trust and company law is based on, and similar if not the same, as English law.

139. There are two factors which I consider carry significant weight in determining the appropriate forum.

140. The first is that all these claims should be tried in the same jurisdiction. There may be different claims but there is in substance one dispute and it is undesirable to attempt to isolate claims which can be tried in one jurisdiction and others which can be tried elsewhere. That will inevitably lead to increased cost, time, complexity and the risk of inconsistent judgments.

141. The second factor is that there is only one jurisdiction which can hear the Default Judgment claim. Only this Court can set aside the judgment made in the M-JWK Claim. There will therefore have to be proceedings here about a central part of the dispute between the parties and involving the key Defendants – Władysław and Michael. The Default Judgment lies at the heart of the alleged conspiracy and Władysław and Michael are the alleged ringleaders. Added to that is the fact that the SSA Claim is subject by the SSA (to which Fazita, Durnont and PREI are parties) to the exclusive jurisdiction of this Court, and while that is not conclusive, it weighs heavily in favour of this being the appropriate jurisdiction to try the SSA claim.

142. There is no insuperable obstacle to all the various facets of this dispute being tried in England and Wales. There may be difficult issues of Polish law to resolve, but with the assistance of appropriately qualified Polish law experts, the Court ought to be able to deal with that fairly. It was suggested by Mr Purchas that Durnont’s claims involved criticising the Polish court bailiff process, or trespassing on issues on which the Polish courts regarded themselves as having exclusive jurisdiction such as determining the validity or invalidity of decisions of the bodies of the Fund. However, those objections did not withstand scrutiny. There is no criticism of the Polish court bailiff process. Durnont does not seek to establish that any decision of the bodies of the Fund is invalid.

143. Taking these considerations into account I conclude that the clearly more appropriate forum in which Durnont’s claims may be tried in the interests of all the parties and the ends of justice is England and Wales. M. Concluding remarks

144. In summary, the Defendants’ various applications to strike out the proceedings, or for reverse summary judgment, or to dispute jurisdiction, or to set aside permission to bring a derivative claim, all fail and are dismissed.

145. I should like to end by noting that I was pleased to be addressed by Mr Dinsmore on Durnont’s case on gateways, forum and certain issues relating to the SSA and jurisdiction. In light of the concession referred to in paragraph 3 I did not hear from Mr Samuels in relation to the derivative claim but I was pleased to see he had been entrusted with that part of the intended submissions. The intelligent deployment of junior advocates, in accordance with the 8 November 2023 Practice Note 39PG.5 from the Lady Chief Justice, Master of the Rolls and the Heads of Division, has benefits for the parties and their legal teams, as well as for the junior advocates concerned, and is to be encouraged.