Court of Appeal considers the test for setting aside a notice of discontinuance

The Claimants sought to enforce a New York Convention award in their favour both in the UK and in other jurisdictions. In the proceedings in England, the Defendant sought to set aside the order granting permission to enforce the award. The court directed that the Defendant's claim that the award was obtained by fraud should proceed to trial. In so doing, the court found that there was prima facie evidence of fraud. The Claimants then served a notice of discontinuance and the Defendant applied under CPR r38.4 to have the notice set aside.

CPR r.38.4 gives no guidance as to the circumstances in which a court will set aside a notice of discontinuance. However, prior case law has established that abuse of process is not a necessary or exclusive criterion which has to be satisfied, and the judge in this case re-confirmed that point. He set aside the notice of discontinuance and the Court of Appeal has now allowed an appeal from that decision.

The Court of Appeal agreed with the judge that there was no need to establish abuse of process and that the discretion conferred by CPR r38.4 "is a discretion expressed in general, unqualified terms and there is no ground for limiting it by reference to implied gateways or restrictions". However, it found that the Defendant did not have a legitimate interest in continuing the proceedings. The proceedings had been brought in order to enforce the award against the Defendant's assets in England – there was no other connection with this jurisdiction. That purpose had now ceased and so "a very strong case" (and possibly exceptional circumstances) would be required to show a continuing interest. No such interest could be demonstrated on the facts (although the Court of Appeal indicated that if it could be shown that a finding in England would create an issue estoppel in other countries where enforcement proceedings were pending, that might have satisfied the continuing interest test).

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