29th April 2021
The Defendant appeals against the order of Birss J (as he then was) dated 30 March 2020 whereby he allowed the Claimant’s appeal from the order of Chief Master Marsh dated 23 July 2019.
The action which the Chief Master dismissed was a claim issued on 11th October 2018 by Zavarco in which it claims €36 million owed by Mr Nasir. This debt arises because Mr Nasir was allotted 360 million shares in Zavarco of €0.10 each on its incorporation and they remain unpaid. Mr Nasir’s case (amongst other things) was that he was not obliged to pay for those shares with cash but rather that it was agreed that the par value would be satisfied by transfer to Zavarco of shares in another company (“ZB”). ZB stands for Zavarco Berhad, a Malaysian company. However in a judgment dated 14th November 2017 following proceedings brought in 2016 the judge (Mr Martin Griffiths QC) rejected Mr Nasir’s case about that. The judge held there was no agreement that Mr Nasir’s shares would be paid for otherwise than in cash and that Mr Nasir took the shares on the terms of the Memorandum and Articles of Association and no other terms. The judge found that Mr Nasir was obliged to pay for the shares in cash. This meant that under the Articles, Zavarco would be entitled to forfeit the shares as long as they complied with certain steps in relation to Mr Nasir. These were to serve on him a valid call notice requiring the unpaid sum to be paid, and, assuming the sum was not paid after 14 days, to serve a notice of forfeiture. The judge held that the call notice and notice of forfeiture sent by Zavarco were valid.
Birss J did not find that the Claimant succeeded on any of its grounds of appeal but allowed the appeal in his order of 30 March 2020 on a ground that had not been pleaded, that merger does not extinguish a successful claimant’s cause of action. Rather, the Judge held that it merely prevents the reassertion of the same `right’ on which judgment was given.
Lower Court Judgment: