Porter Capital Corporation v. Zulfikar Masters  EWCA Civ 5
Following a lengthy trial (so long ago as 2013), Charles Fussell & Co LLP is pleased to announce that our client has enjoyed significant success on appeal.
We acted for our client in the defence of a claim by a US factoring company, Porter Capital Corporation (“Porter”), under a guarantee made under Connecticut law by the client of the debts of a pharmaceutical business in the USA in which he had made a substantial investment. That business had gone into insolvency in the USA and Porter made a claim under its guarantee. The underlying factoring agreement was difficult to understand and Porter’s actual factoring practice over a number of years had differed from what that agreement appeared to provide.
It had been necessary to make wide-ranging disclosure requests of Porter and to involve a forensic accountant simply to understand how the claim had been calculated. To complicate matters further, the factoring agreement was made under the law of the state of Connecticut. Although that law is broadly similar to English law, there is a crucial difference in that the courts of that state will, unlike English courts, admit (in certain circumstances) evidence of performance of contracts as an aid to interpretation, which became a major source of contention at the trial. The case had gone to trial in 2013 and one aspect of the first instance decision has been widely-reported: the trial judge refused to impose pre-emptive sanctions for any failure to make a payment on account pursuant to his judgment.
We successfully persuaded the Court of Appeal to stay execution of that payment until the conclusion of the appeal.
The matter finally reached the Court of Appeal in December 2015 after an earlier hearing was cancelled because of lack of judicial personnel to hear the appeal. Lord Justice Davis expressed concern that the matter had taken so long to be heard – a concern which will no doubt be familiar to other practitioners.
The Court of Appeal overturned a number of aspects of the first instance judge’s decisions in our client’s favour, in particular relying on expert evidence of the law of Connecticut to defeat Porter’s claim for compound interest. All of these factors are likely to have a very significant impact on the final outcome. The payment on account remains stayed.
Iain Pester (formerly of 11 Stone Buildings, but now of Wilberforce Chambers) represented the client at first instance and on appeal.