Neutral Citation Number: [2004] EWHC 1266 (Comm)

Case No: Case No: 2003 Folio 1049
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 28/05/2004

Before :

THE HONOURABLE MR JUSTICE LANGLEY
- - - - - - - - - - - - - - - - - - - - -
Between :

	IRVIN DYER	Claimant	
	- and -		
	(1) PICLUX S.A.
(2) H H MAXIMILIAN VON HABSBURG	Defendants	

- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -

Ms S. Prevezer QC and Mr J. Collins (instructed by Messrs DM Solicitors Ltd) for the Claimant
Mr S. Males QCand Mr J. Kenny (instructed by Messrs Hopkins & Co) for the Defendants

Hearing date: 24th May 2004
- - - - - - - - - - - - - - - - - - - - -
Judgment

The Hon. Mr Justice Langley: 
The Applications.
1.	The Claimant (Mr Dyer) seeks a summary judgment on his claim on the basis that the Defendants (Piclux and Mr von Habsburg) have no real prospect of successfully defending the claim. Piclux and Mr von Habsburg also seek summary judgment on the basis that Mr Dyer has no real prospect of succeeding on his claim.
The Claim.
2.	The claim against Piclux is made under the terms of a Share Sale Agreement dated 4 August 2001 for payment of the balance of the price said to be due for Mr Dyer’s shares in Medrom S.A. (a company incorporated in the Grand Duchy of Luxembourg). Mr Dyer owned 25 shares which represented 25% of the issued share capital of Medrom. Mr von Habsburg owned 50 shares and a Mr Hahn also owned 25 shares. Piclux was a corporate vehicle controlled by Mr von Habsburg. The claim against Mr von Habsburg is made as guarantor of the obligations of Piclux under the Share Sale Agreement.
The Supply Contracts/MOH Deal.
3.	The background to the Share Sale Agreement is not in issue. In December 2000 Medrom had concluded two contracts with the Ministry of Health of Romania for the supply of medical equipment. The contracts were each signed on behalf of Medrom by Mrs Petruta Dyer the wife of Mr Dyer. The contracts (referred to as “the MOH Deal”) were of considerable value. The contract which was denominated in Euro was for equipment valued at €30m. Part of that equipment came to be described as “The Radiology Portion” of the contract. The contract denominated in US$ was for equipment valued at about $10m. That equipment and the balance of the Euro contract came to be described as “the Residual Portion” of the contracts. However, not long after the contracts were concluded, they were (to quote Mr Hopkins, the solicitor for the Defendants) “effectively put on ice” following a change of Government in Romania. 
4.	The Share Purchase Agreement was entered into at a time when Medrom was “under financial pressure” and the MOH Deal was still on ice. To quote Mr Dyer, the value of the MOH Deal to Medrom “turned, to a large extent, on the security of payment by the Romanian Government”. Plainly, also, the value of Medrom depended to a great extent on the MOH Deal. Each of the contracts (which were expressly subject to English law) provided that they would only come into force upon fulfilment of a number of conditions including approval by “the related Export Credit Agency” or “Ex-Im Bank”, “Issuing of the L/C” and “The issuance of the Sovereign Guaranty by the Ministry of Finance” of Romania (my emphasis).
5.	Mr Hopkins describes the contracts as ones whereby the Romanian Government paid for the equipment through a “buyer credit” arranged by Medrom itself. The buyer credit involved arranging a national export guarantee by the relevant government agency (Ex-Im bank in the case of the USA) and a credit arrangement between a bank and the Ministry of Health in Romania whereby the bank would lend the price of the equipment to the Ministry on the security of the national export guarantee and the sovereign guarantee of the Romanian Government. To quote Mr Hopkins again:
“In practice, the deal would be completed when the Romanian Government delivered its sovereign guarantee to the merchant bank which was providing the credit. On receiving that guarantee, the merchant bank would open a letter of credit in favour of Medrom and Medrom would ship the goods.”
 Medrom would receive payment under the letter of credit on presentation of the shipment (and other) documents.
The Share Sale Agreement.
6.	The Agreement named an “Escrow Agent”, and further provided that:
“2.1	With effect from the date hereof [Mr Dyer] … shall sell …and transfer … the shares to [Piclux]….
2.2	The Sale Price for the … Shares … shall be discharged by the payment of US$ 200,000 … on the execution of this Agreement and the delivery to [Mr Dyer] of a Promissory Note by [Piclux] in the form of the draft Promissory Note set forth in the Second Schedule hereto.
2.3	It is hereby agreed that in consideration of [Mr Dyer] entering into this Agreement  at the request of [Mr von Habsburg], [Mr von Habsburg] will use his best endeavours to guarantee to [Mr Dyer] the due and prompt payment of each payment of the Sale Price as and when the same lawfully falls due for payment by [Piclux] under that … Promissory Note.
2.4	 As security for the due payment by [Piclux] to [Mr Dyer] pursuant to the Promissory Note, [Mr von Habsburg] shall lodge with the Escrow Agent undated but signed cheques in the amounts expressed to be payable by [Piclux] under the Promissory Note and [Mr von Habsburg] hereby irrevocably authorises and instructs the Escrow Agent to date and deliver the relevant cheque to [Mr Dyer] … in discharge of [Mr von Habsburg’s] obligation under this Agreement should [Piclux] default in payment of such amount when such payment becomes lawfully due by [Piclux].
2.5	Completion … shall take place … on the execution hereof. On Completion [Piclux] shall deliver to [Mr Dyer] the sum of US$ 200,000 and a duly executed Promissory Note … and [Mr Dyer] shall [in effect cease to have any interest in or influence over Medrom].”
7.	Clause 5 contained restrictive covenants agreed to by Mr Dyer and Clause 8.11 was an English Law clause.
The Promissory Note and the Construction Issue.
8.	It is the wording of the Promissory Note referred to in the Share Sale Agreement which gives rise to the major question on which the parties each contend they have a case strong enough to justify a summary judgment.
9.	The wording (so far as material) reads:
“For value received, we Piclux S.A. … hereby promise to pay to the order of Irvin Dyer … the following amounts subject to the satisfaction of the relevant condition precedent set opposite the relevant amount as set out in the Table below.
Table
Condition Precedent	Payment	
Payment 1
Subject to the precondition of the issue of the Sovereign Guarantee by the Romanian Government in respect of the Residual Supply Portion of the MOH Deal, payment to be made 21 days thereafter.	US$107,000	
Payment 2
Subject to the precondition of the issue of the Sovereign Guarantee by the Romanian Government in respect of the Radiology Supply Portion of the MOH Deal, payment to be made 21 days thereafter.	US$450,000	
Payment 3
Subject to the satisfaction of preconditions to Payments 1 and 2, payment to be made nine months after the date of the Promissory Note.	US$375,000	
Payment 4
Subject to the satisfaction of preconditions to Payments 1 and 2, payment to be made eighteen months after the date of the Promissory Note.	US$375,000	

No liability for payment of the relevant payment shall arise unless and until the relevant precondition for same shall have been satisfied.
Provided Always that should Piclux SA default in payment on the due date for any such amount as set out above interest at the rate of 15% per annum shall become payable by Piclux SA on any such amount in arrears calculated from the due date for payment until the actual date of payment as well after as before any judgment in any court.
For the purposes of this Promissory Note the following expressions shall have the following meanings:-
“MOH Deal” ….
“Radiology Supply Portion” means the Radiology portion of the MOH Deal.
“Residual Supply Portion” means the portion of the MOH Deal other than the Radiology Supply Portion.
“Sovereign Guarantee” means the guarantee of the Romanian Government guaranteeing payment to the Company of monies due to the Company pursuant to the Company’s MOH Deal.
This Promissory Note shall be construed and governed by the laws of the Grand Duchy of Luxembourg.”
10.	The words I have underlined in the Table give rise to the major question. The question is when does “the issue of the Sovereign Guarantee” take place in the circumstances which in fact occurred and which are summarised below. I shall refer to this as “the construction issue”.
11.	The Promissory Note itself was signed and dated 4 August 2001 by Piclux and delivered to Mr Dyer. Neither party submits that Luxembourg Law is relevantly different from English Law. There is no dispute that the sum of US$200,000 referred to in Clause 2.2 of the Share Sale Agreement was duly paid, nor that the Sovereign Guarantee for the Residual Supply Portion was issued. On 1 July 2001 the first payment of US$107,000 was made. Mr Dyer’s claim is for the three further payments totalling $1.2m less a sum of $85,000 paid on account in about April 2003. The principal sum claimed by Mr Dyer is therefore $1.115m.
The Cheques.
12.	There were attached to the Share Sale Agreement at completion cheques signed by Mr von Habsburg intended to represent the security Mr von Habsburg had agreed to provide pursuant to Clause 2.4 of the Agreement. However, although there was nothing on the face of the cheques to indicate that they were anything other than personal cheques, Mr Dyer suspected they might in fact be corporate cheques. He raised the matter with Mr von Habsburg in early January 2002 and was told that the cheques were indeed drawn on a company called Picker Imaging Espana. Mr Dyer says Mr von Habsburg agreed to change the cheques for personal cheques.
13.	On 5 February 2002 Mr Dyer’s solicitors wrote to Mr von Habsburg threatening proceedings for breach of clause 2.4 if the cheques were not replaced with personal cheques. They also raised two other matters said to have been agreed: a change in the escrow agent and variations to the restrictive covenants in the Share Sale Agreement.
14.	On 26 February, Mr von Habsburg’s solicitors replied saying Mr von Habsburg had instructed them “to confirm that he will contact the existing Holding Agent and substitute the cheques within the next 7 days”. The letter also records agreement to change the escrow agent and to vary the restrictive covenants.
The Addendum.
15.	Mr Dyer’s solicitors drew up a Deed of Addendum to the Share Sale Agreement. It is the case of Piclux and Mr von Habsburg that they suspect the signatures on this Addendum may have been the subject of a forgery by or procured by Mr Dyer. Indeed, as will be seen, the allegation of forgery has been expressly made, albeit Mr Males QC, who appeared for the Defendants, rightly did not seek to sustain the allegation on the present state of the evidence but rather submitted that should the Defendants lose on the construction issue there were matters which the Defendants had not had the opportunity to investigate about the Addendum and which they should be allowed to investigate before the court could properly conclude on Mr Dyer’s application. I shall refer to this as “the Addendum Issue”.
16.	I must therefore set out the available evidence in some detail.
17.	In the Particulars of Claim dated 15 March 2004 Mr Dyer pleaded the Addendum “dated 26 April 2002” in support of a claim that Mr von Habsburg was in breach of one of its provisions (clause 3) that personal cheques would be substituted for the corporate cheques to be held by the escrow agent. By a proposed amendment to the claim (which was permitted without objection at the hearing of the present applications) reliance was also placed on the letters to which I have referred (paragraphs 13 and 14) exchanged between solicitors in February 2002 as themselves constituting an agreement to exchange the cheques. That was because the validity of the Addendum itself had by then already been called into question.
18.	Mr Dyer exhibited the Addendum dated 26 April 2002 on which he relied to his first witness statement dated 6 April 2004. I have also seen in court the original of this document which contains a handwritten signature of Mr Dyer and two signatures purporting to be signatures of Mr von Habsburg (one for Piclux and one personal) which are in a pale blue colour. The document itself, prepared by Mr Dyer’s then solicitors, is headed “Draft 3: 17.04.2002” and dated “26th April”. The substance of the agreement it records is to amend the restrictive covenants, change the escrow agent, and to require Mr von Habsburg to lodge personal cheques with the new agent. All these matters were ones to which Mr von Habsburg had agreed by his solicitors’ letter dated 26 February 2002.
19.	In his first witness statement Mr Dyer said he signed the Addendum in Bucharest, sent it to Medrom for signature by Piclux and Mr von Habsburg, and that he had received the signed Addendum from Medrom in Luxembourg.
20.	Mr von Habsburg’s solicitors (Hopkins & Co) had written seeking a copy of the Addendum when it was first referred to in correspondence by Mr Dyer’s solicitors. A copy was supplied on 17 March 2004. Hopkins & Co wrote in reply on 19 March:
“Our clients have serious concerns whether apparent signatures which appear next to the names of HH Maximillian von Habsburg and Piclux S.A. are in fact genuine.”
21.	It was Mr Hopkins of Hopkins & Co who signed a witness statement on 7 May 2004. He stated that the statement was based on information obtained from Mr Hahn and Mr von Habsburg.
22.	In this statement Mr Hopkins said (paragraph 35) that “a possible Addendum” had been discussed in early 2002 and that Mr Dyer’s solicitors had produced “a draft version”. The statement continued:
“The Defendants have in their possession a draft 1 and a draft 3 – both unsigned. However, as far as the Defendants were concerned, these negotiations never came to anything. Neither of the Defendants ever signed any addendum.”
23.	The two drafts were exhibited to the statement. The first was “Draft 1: 28.02.2002” and the date was left blank. It contained only amendments to the restrictive covenant. The second one was “Draft 3: 17.04.2002” and the date was again blank, but it contained the same terms as the signed Addendum produced by Mr Dyer. Both were wholly unsigned. 
24.	Mr Hopkins’ witness statement continued:
“37.	However Mr von Habsburg tells me that this supposed signature is a forgery. I made this clear to Stephenson Harwood when I inspected the “original” of the document on 31 March 2004. It appears to be simply a crude and fraudulent attempt to alter the terms of the Share Sale Agreement.
38.	No explanation has been given by Mr Dyer in his witness statement as to how these forged signatures came to be appended to the draft Addendum. In those circumstances, the Defendants infer, and ask the Court to infer, that Mr Dyer is responsible for the forgery and that Mr Dyer must have perpetrated this forgery sometime before Stephenson Harwood wrote their letter to Mr von Habsburg dated 8 October 2003.
39.	The consequences of that forgery are obviously a matter for legal argument, but it is Mr von Habsburg’s case that the forgery discharges him from any liability he might otherwise have had as guarantor under the Share Sale Agreement.”
25.	Thus it was alleged that:
i)	Neither Piclux nor Mr von Habsburg had “ever signed any addendum”;
ii)	The signatures on the Addendum produced by Mr Dyer were “a crude and fraudulent attempt” to alter the terms of the Share Sale Agreement; and
iii)	Mr Dyer must have been responsible for the forgery.
26.	Mr Dyer signed a second witness statement on 19 May 2004 in response to Mr Hopkins. He produced a fax received at his office, sent from Medrom’s office on 24 April, consisting of a fax from Mr von Habsburg’s private office in Madrid to Mr Hahn at Medrom attaching the 17.04.2002 Draft 3 of the Addendum. The Addendum was undated but signed by Mr von Habsburg once apparently on behalf of Piclux. As Mr Dyer understandably said, given that one of the express purposes of the Addendum was to record Mr von Habsburg’s personal obligation to provide personal cheques, he saw this as “another attempt to obfuscate and delay”. Mr Dyer said he was 
“very annoyed and telephoned his wife Petruta who, then, was still managing director of Medrom. I told Petruta to ask MvH to provide a properly executed document signed by MvH personally as well as by MvH on behalf of Piclux. Further, not least because I was, by now, thoroughly distrustful of MvH’s continuing failure to provide the personal cheques notwithstanding numerous undertakings on his behalf to do so, I asked that MvH supply evidence of his authority to sign on behalf of Piclux.
On 25 April a further fax came from Medrom’s office to my office. This time it comprised a document which appeared, to my eye, to have MvH’s signature (with which I was familiar from conducting business with him for several years) appended next to both Piclux and MvH names.
Around 26 April I received, from Petruta, the original of the above document ….”
27.	Mr Dyer produced a copy of the further fax to which he referred with a copy of the Addendum apparently signed twice by Mr von Habsburg and, once again, showing that it had been faxed from Mr von Habsburg’s private office in Madrid to Medrom at 09.20 on 25 April and from Medrom to Mr Dyer’s office at 11.53 the same day. This Addendum is dated and looks to be the same as the one produced by Mr Dyer with his first witness statement. The fax also contained a two-page document in French setting out the power of Mr von Habsburg to act for Piclux on his sole signature.
28.	On Friday 21 May, 3 further witness statements were served on behalf of the Defendants addressing the Addendum Issue. The first statement was from Mr von Habsburg. It reads (as far as material) as follows:
“1.	I am a businessman and a shareholder in Medrom SA and Piclux SA. I confirm that I read and approved Mr Hopkins’s first statement before it was filed and I still believe the facts that he sets out to be true. I have now read Mr Dyer’s 2nd Statement and I have been asked to comment on it.
2.	I remember signing the single-signature version of Addendum [pp247-253] and as I recall I sent it to Horst Hahn, for his review. As I recall, it was not my intention that it should be sent to Mr Dyer. It was an internal document.
3.	I did not sign against my name because I was not happy with the terms of the Addendum insofar as they applied to me personally. My signature against Piclux’s name still required formal execution by way of a countersignature and I was at the time I sent the single-signature version of the Addendum to Mr Hahn in discussions with my co-directors about whether Piclux should execute the Addendum or not.
4.	I had never seen the double signed version of the Addendum before this dispute arose at the end of last year. I did not sign that version of the Addendum. I did not authorise its being signed on my behalf. I cannot imagine who could have caused my signature to be placed on that document other than Mr Dyer. I also noted that the signatures appear to be exactly the same. I have put one of the versions on top of the other and it appears that the alledged signatures are identical in every respect which confirms my belief that they are not natural.
5.	I recall and so does my secretary that unsigned drafts of the Addendum were being faxed between my office in Madrid and Medrom in Bucharest for Medroms review. I have asked my secretary Carolina Cuevas if she signed the Addendum and she confirmed that not and there is noone else who could have. No version of the Addendum baring my 2 signatures left my Spanish office. I can only conclude that these were added later.
6.	I think it odd that had I properly executed the addendum on behalf of Piclux and myself that we were not quickly pressed to action items stated in the addendum.
7.	I do have a stamp with a facsimile bearing my signature which I keep for submitting tender documents in my absence in my offices of Madrid and in the offices of Medrom in Bucharest and Luxembourg. I think it is likely that such a stamp was used without my authorization.”
29.	Thus Mr von Habsburg did sign the addendum at least once and the signatures on the copy on which Mr Dyer relies are no longer crude forgeries but probably come from a genuine stamp. That evidence is not consistent with Mr Hopkins’ evidence: see paragraph 25(i) and (ii). Nothing is said about who controls the stamps. No explanation is offered for the faxes from Madrid or for Mr Hahn sending on the Addendum to Mr Dyer. Nor is any explanation offered for why Mr von Habsburg should have had any unhappiness about the terms of the Addendum insofar as they applied to him personally or at all. He had agreed to them.
30.	The second of the three statements was made by Mr Hahn. So far as material, it reads as follows:
“2.	I remember seeing the version of the Addendum with Mr von Habsburg’s signature appearing once, against the name of Piclux SA. I cannot remember whether the version that I saw had any fax legend on it or not.
3.	I do not recall its being sent by fax to Mr Dyer.
4.	I would certainly be very surprised if ( as would appear from the documents produced) it had been faxed to Mr Dyer from Medrom’s office with no coversheet. Relations between Medrom and Mr Dyer were very bad at this time; we would certainly have used a coversheet to pass on any documents.
5.	Furthermore I cannot imagine why documents of this kind would be forwarded via Medrom to Mr Dyer. Mr Dyer had his own address and fax. Any documents that Mr von Habsburg had wanted to send on he would have sent directly.
6.	I do not recall having seen - or heard of – the version of the Addendum with Mr von Habsburg’s signature appearing twice in April 2002 or at any time before this dispute arose in 2003.
7.	 I repeat my earlier remarks that I cannot imagine why it would be sent out without a coversheet nor can I imagine why it would be sent to Mr Dyer via Medrom.
8.	I am also surprised to see the document from Luxembourg about Piclux [p 261]. I know this was produced for Mr Dyer’s benefit at the time of the signing of the Share Sale Agreement. I cannot imagine why Mr Dyer would want another copy. Nor do I know where the second copy is supposed to have been provided from.
9.	If these faxes to Mr Dyer are genuine documents, then I find it difficult to imagine who could have sent them. I know that it would be easy for anybody in Romania with a little incentive to find the necessary help needed even among our employees.”
31.	I would make the following comments, in agreement with Ms Prevezer QC’s submissions, about this evidence:
i)	Unlike Mr von Habsburg, Mr Hahn does not confirm that he read and approved Mr Hopkins’ first witness statement;
ii)	There can, as will be seen, be no doubt that the single signature version of the Addendum was faxed by Medrom to Mr Dyer. None of the copies of the Addendum to which Mr Hahn (or Mr von Habsburg) refers are produced.
iii)	The language used (“I do not recall”) is not strong.
iv)	As will also be seen there was in fact, to Mr Hahn’s knowledge, a good reason for “ the document from Luxembourg” to be sent to Mr Dyer. The reference is to the two page document stating Mr von Habsburg’s powers to act for Piclux.
v)	The final paragraph 9 involves a serious implication of fraud not only against Mr Dyer but some other unnamed person at Medrom.
32.	The third statement was made by Mrs Dyer, who is “the manager” of Medrom. So far as material her statement reads:
“2.	Mr Dyer says that he spoke to me sometime around the 22 April 2002 and asked me to get Mr von Habsburg to provide another fully signed version of the Addendum. I do not recall any such conversation.
3.	More specifically at around this time, I was working on a national charity appeal of which President I am, and I was not working in the office, as I do every year during Easter period when the fundraising campaign takes place. In fact, on 25 April 2002, I know that I was not at the office at all because I was appearing on a television chat show for the charity fundraising event and I was at the studio all day.
4.	Mr Dyer says that I provided him with the original copy of the signed Addendum. I do not recall doing any such thing. I would not have taken documents home from the office. If Mr von Habsburg had wanted to send an original document to Mr Dyer he would have sent it directly to him. Mr von Habsburg knew Mr Dyer’s address perfectly well, because it was our office between 1999 and 2001.
5.	 At around this time, I was there were tense negotiations concerning the exit by Mr Dyer from Medrom SA. Bearing in kind my difficult position as Mr Dyer’s wife (although relations between us were very bad at the time) and simultaneously an employee, I had decided not to have any involvement with these negotiations. My husband, as well as the shareholders of Medrom SA were perfectly aware of this fact.”
33.	The language used is again “I do not recall”. There is nothing of obvious significance in the dates to which reference is made nor in the fact that documents would not be taken home from the office.
34.	Finally, in the course of the hearing, a small clip of documents was produced which had been provided by letter dated 21 May 2004 by Hopkins & Co to Mr Dyer’s solicitors. The documents were print-outs of an e-mail exchange on 24/25 April 2002. They show that on 24 April 2002 Mr Dyer’s then solicitors had been sent by fax by him (or someone acting for him) a copy of the Addendum bearing the single signature of Mr von Habsburg and the solicitors had mailed Mr Dyer in reply to point out that the Addendum had not been and needed to be signed personally and that assurance was needed that Mr von Habsburg alone could execute the Addendum so as to bind Piclux. Mr Dyer had then e-mailed Mr Hahn on 25 April at 21.26, with a copy to his wife, saying:
“Please find attached comments from my solicitor re the amendment with MvH and Piclux. Max failed to sign and date the amendment in the correct manner. The agreement must be dated and he should sign personally the document. In addition Max should confirm that he is able to sign solely on behalf of Piclux. Horst I would greatly appreciate it if you would help expedite this matter so that we can place this unfortunate situation behind all of us and get on with the other business which is more productive ”
35.	The e-mails were produced by Hopkins & Co to question Mr Dyer’s evidence that he received the Addendum with the two signatures on 25th April. Why, then, it was asked was he still seeking two signatures on 25 April at 21.26? But Mr Dyer’s evidence was that he had received the original copy of the Addendum with two signatures from his wife “around 26 April” which is not inconsistent with this e-mail exchange, albeit the faxed version of the document appears to have been sent to his office on the morning of 25 April.
36.	Nonetheless what is of much greater significance to my mind, and as Ms Prevezer submitted, is the fact demonstrated by the e-mails that both Mr Hahn and Mrs Dyer knew about the Addendum bearing a single signature, knew two signatures were required, and knew authority for Mr von Habsburg to sign for Piclux was required all of which is consistent with the faxed copy bearing two signatures and enclosing proof of the authority but is not consistent with Mr Hahn’s witness statement and at the least suggests that Mrs Dyer’s statement is less than the whole truth.
The MOH Deal and the Sovereign Guarantees.
37.	It is Mr Dyer’s case that on 27 October 2003 the Romanian Government issued a Sovereign Guarantee in respect of the Radiology Supply Portion of the MOH Deal and delivered it to Raiffeisen Bank SA as escrow agent for the MOH Deal.
38.	It is Mr Dyer’s evidence that when he was told by the Ministry of Health of the issue of the Guarantee he arranged to meet Mr Hahn in Bucharest on 5 November 2003 and they agreed that the conditions for payment of the Promissory Note had been fulfilled and also agreed the dates for the payments to be made to Mr Dyer and certain set-offs against the payments. Mr Dyer’s evidence is fully supported by:
i)	A Copy of the Sovereign Guarantee, stamp dated 27 October 2003, which is addressed to Medrom and states “we hereby issue this separate and unconditional guarantee for payment” of the relevant Promissory Notes (my emphasis) and
ii)	An e-mail sent on 8 November 2003 by Mr Hahn to Mr Dyer thanking him for their meeting on 5 November “whereas I represented the interest of Mr von Habsburg in respect of the Share Sales Agreement from 4 August 2001”, and stating “The meeting was pre-empted by the issuance (my emphasis) of the Sovereign Guarantee of the second portion on the 27th October 2003 and therefore all conditions precedent of the promissory note of the share sales agreement are fulfilled for payment”. The e-mail also referred to “a basic agreement” as to the timing and amounts to be paid to Mr Dyer on his behalf and to Mr Dyer’s lawyers drawing up a final deed to record the agreement. This e-mail was copied to Mrs Dyer and to Mr von Habsburg.
39.	However, when Mr Dyer sought payment, Piclux asserted that the Sovereign Guarantee had not been issued and Mr Hahn, in a further e-mail addressed to Mr von Habsburg, Piclux and Mr Dyer, sought to refute his e-mail sent on 8 November both as regards his authority to represent Mr von Habsburg and as regards the issue of the Sovereign Guarantee because the Guarantee “is still held by the Escrow Agent pending satisfaction of outstanding preconditions and … I mistakenly believed that the mere dating of the Sovereign Guarantees constituted its issuance. I fully accept that the Guarantees will only issue once they have been released from the Escrow Agreement by the Escrow Bank ….”
40.	The reference to the Sovereign Guarantee being held by the Escrow Agent (Raiffeisen Bank) is explained in Mr Hopkins’ witness statement. Mr Hopkins says that at the time the MOH Deal was revived “in late 2001” the credit rating of the Romanian Government had improved to the point that it was no longer necessary to have (and so to pay for) a national export guarantee. The consequence was that payment to Medrom was secured by use of a bank as an “escrow agent” to hold Promissory Notes backed by a Sovereign Guarantee to be released to Medrom against the shipping documents for the equipment. The Notes and Guarantee could then be discounted by Medrom to any bank willing to pay for them. There is no letter of credit from the Bank and no payment made by the bank. Mr Hopkins describes this new arrangement as a “seller credit” in contrast to the “buyer credit” (paragraph 5). Mr Hopkins says that at the time of the MOH Deal the financing contemplated was a buyer credit with no comparable escrow agent at all and the Share Sale Agreement was entered into in that context, that is on the basis that the Sovereign Guarantee would be held by the Bank providing a letter of credit. 
41.	In commercial terms both a seller credit and a buyer credit produce payment or its equivalent only on proof of shipment. The sovereign credit risk is taken by the bank in a buyer credit but by the seller (or the discounting bank) in a seller credit. In both cases the Sovereign Guarantee is key to the credit and so the supply. Indeed it was its “issuance” which brought the MOH Deal itself into force: paragraph 4.
42.	Mr Hopkins also said that although payment for the Residual Portion of the MOH Deal was finalised in about June 2002 it was not until 2003 that the Romanian Government entered into a credit arrangement “that would allow the sale of the Radiology portion” to proceed. The original Credit Agreement made between Medrom and the Ministry of Health in June 2003 provided for credit to be made available by Medrom (as “Seller/Lender”) only once (amongst other matters) the Escrow Agent had received Promissory Notes from the Ministry of Health and “Payment Guarantees issued by the Sovereign Guarantor” in respect of the Notes (my emphasis).
43.	Attached to the Credit Agreement was an escrow agreement to be entered into by the Ministry, Medrom and Raiffeisen Bank (the “Escrow Agent”) whereby the Ministry and Medrom appointed the Bank to serve as escrow agents on the terms that the Ministry would deliver to it the original Promissory Notes and “the original Payment Guarantees” to hold in safekeeping “on behalf of” Medrom and the Ministry and to release them to Medrom against shipping documents for the equipment.
44.	Mr Hopkins says that deliveries of the equipment were rescheduled (extended) by agreement leading to the first Amendment of the Credit Agreement in August 2003.
45.	In late 2003 the Promissory Notes and the Sovereign Guarantees were delivered to the bank. The Guarantees were indeed addressed to Medrom, recorded that they were issued (“we hereby issue”) in favour of Medrom for payment of the Promissory Notes and were signed and sealed on behalf of the Romanian Ministry of Finance. In addition, and as required by the Credit Agreement, a legal opinion was provided confirming the validity of the Guarantees.
46.	On 8 December 2003, the Bank wrote to Mr Hahn at Medrom to confirm that it had received all the documents required to meet the conditions precedent to the Credit Agreement including “4 Payment Guarantees … issued by the Guarantor in your favour” (my emphasis). That was a reference to the Sovereign Guarantees.
47.	Mr Hopkins says two of the guarantees have been released to and, one assumes, realised by Medrom but two still remain with the Bank and delivery of the remaining goods has been rescheduled again.
The Luxembourg Court Order.
48.	The Defendants also submit that as a result of an order obtained by Mrs Dyer in Luxembourg “any obligation that Piclux might previously have owed to make payment to Mr Dyer has been suspended”. I shall refer to this as the Luxembourg Court Order issue.
49.	In February 2004, Mrs Dyer obtained an interim order from the courts in Luxembourg attaching any monies due from Piclux to Mr Dyer. In April 2004 a similar order was obtained in respect of any monies owed by Mr von Habsburg to Mr Dyer. The order was sought by Mrs Dyer in support of the community of property which exists between husband and wife under Romanian law.
50.	The effect of the Luxembourg court order is, to quote the Luxembourg avocats instructed on behalf of the Defendants, to “forbid Piclux and HH Maximilian von Habsburg to pay out any money to Mr Dyer” until the Romanian court decides on community property or further order of the Luxembourg court.
THE CONSTRUCTION ISSUE
51.	The short question is what do the words “the issue of the Sovereign Guarantee by the Romanian Government in respect of the Radiology Supply Portion of the MOH Deal” mean where they appear in the wording for “Payment 2” in the Table (set out in paragraph 9 of this judgment) which formed part of the Share Sale Agreement. The commercial context was the completed sale of Mr Dyer’s shares and the value to Piclux (and so of the shares) of the MOH Deal should it be activated. Performance of the MOH Deal (and so payment for it) once the relevant credit documents were provided would be a matter within Medrom’s control and one over which Mr Dyer would have no influence. Further, at the time of the Share Sale Agreement, there was no question of the Sovereign Guarantee being held in escrow because there was no escrow agreement. But it was to be held by the financing bank to be effective only when the letter of credit was called. The words therefore fall to be construed on that basis. In the case of both buyer and seller credit transactions once provided to the bank or escrow agent the Guarantee could not be cancelled or withdrawn and remained available against due production by Medrom of the shipping documents for the equipment.
52.	It was Mr Males’ submission for the Defendants that the Guarantees were only “issued” when the Escrow Agent delivered them to Medrom and not, as Ms Prevezer for Mr Dyer submitted, when they were delivered to the Escrow Agent by the Romanian Government.
53.	The basis for Mr Males’ submission was that the delivery in escrow of a deed has the consequence in law that the deed is not executed, is not a deed and is not effective for any purpose. That proposition was derived from cases about stamp duty which considered when duty was payable on a “deed”: see, for example, Terrapin International Ltd v I.R.C. [1976] 1 WLR 665. Accordingly, it was submitted, that when the Sovereign Guarantees were delivered to the Escrow Agent: “ They are not contracts. They are not deeds. They guarantee nothing. They give rise to no legal rights or obligations. They are not effective for any purpose. They are merely bits of paper”.
54.	The high point of this submission came with the reference to the decision of the Court of Appeal in Baring v Commissioner of Inland Revenue [1898] 1QB 78. The headnote neatly summarises the decision: “A security is not issued within the meaning of the Stamp Act, 1891, s.82, sub-s 1(b)(i), until it becomes a legally effective instrument”. The facts were simple. Bonds were to be issued by a new railway company incorporated in the USA. The bonds were to be valid only when a duly signed certificate was indorsed upon them. The bonds to be delivered in the United Kingdom were certificated in England and then delivered. The Court of Appeal decided the bonds were issued in the United Kingdom and so chargeable to duty. The decision has nothing to do with escrow agreements and is wholly unsurprising. 
55.	In my judgment Mr Males’ submission goes nowhere. Not only do I think the importation of principles relating to the Stamp Acts into commercial contracts for the sale of shares to be inappropriate, but the question is when were these Guarantees issued so as to trigger the payments to Mr Dyer not whether or for what purposes they might be “executed” or effective or available to be called upon.
56.	I think it beyond realistic argument to the contrary that the Guarantees were issued when they were signed and sealed by the Romanian Government and delivered to Reiffeisen Bank:
i)	That was the time when the MOH Deal came into force and Medrom had the assurance of payment it required to perform the MOH Deal;
ii)	Performance thereafter lay in Medrom’s hands and the Guarantees could not be cancelled or withdrawn;
iii)	Mr Dyer had no control over the performance of Medrom (nor for example the rescheduling of deliveries) and it would be commercially absurd for him to agree that payment for his shares should depend on the timing or full completion of the MOH Deal by the very company in which he was selling his shares and over which he would have no influence. The contract could have provided expressly that he should only be paid when Medrom was paid if he had agreed as much but it did not.
iv)	The word “issued” connotes the delivery in accordance with the agreement of the duly completed guarantees to a third party on terms where it will stand as security.
v)	The word “issued” has to be construed in a context in which there was no relevant provision for an escrow agent but I do not think the change from a seller credit to a buyer credit affects the matter, save that the word has to be, as I think it readily can be, construed so as to apply to both and in particular the buyer’s credit contemplated at the time it was used. It would, I think, be a strange consequence, that the better the security provided by the Government Guarantees because of the perceived improved security of Romania the riskier became the chances of Mr Dyer being paid for his shares.
vi)	The word ‘issued’ or ‘issuance’ has been used in the sense I consider it to have not only in the Share Purchase Agreement itself (paragraph 4), but also by the Romanian Government in the Guarantee itself: paragraphs 38(i) and 45; by Mr Hahn: paragraph 38(ii); in the Credit Agreement: paragraph 42; and by the Escrow Agent, Raiffeisen Bank: paragraph 46. They could, of course, all be wrong. But I think they were plainly reflecting what they believed was agreed and commercial reality.
THE ADDENDUM ISSUE
57.	I am prepared to assume in favour of the Defendants that if they had a real prospect of establishing that Mr Dyer had forged or caused to be forged Mr von Habsburg’s signatures on the Addendum then either by way of the principles summarised in Chitty on Contracts, 29th Edition, para 44-099 or because that would of itself provide some “other compelling reason” why there should be a trial a summary judgment in favour of Mr Dyer would not be appropriate.
58.	But I am quite unable to conclude that the Defendants have shown any such real prospect. Nor do I think any reasonable basis has been shown for suggesting that given further time they could do so. My reasons are:
i)	Mr von Habsburg plainly did agree to the terms set out in the Addendum which makes it an improbable subject of forgery;
ii)	Mr von Habsburg did, on the evidence, sign it for Piclux and his reasons for suggesting he did not sign or authorise its signature personally are vague and unconvincing;
iii)	The documents which do exist are wholly supportive of Mr Dyer’s account of events. Mr Hahn’s recollection, to put it at its lowest, has been shown to be false and I think Mr von Habsburg’s and Mrs Dyer’s evidence has been shown to be, again at its lowest, less than complete;
iv)	Far from the Defendant’s allegations being strengthened by further evidence the reverse has been the case. There has, I think, been ample time for the matter to be addressed both before and since Mr Hopkins saw fit to assert a crude forgery by Mr Dyer in his witness statement dated 7 May. The further evidence has simply exposed that assertion as one which should not have been made. The issue has been live since at least mid-March: paragraph 20.
THE LUXEMBOURG COURT ORDER ISSUE
59.	There is nothing in the Court Orders nor in the letters from the Luxembourg lawyers to suggest that the attachment orders have the effect of “suspending” any debt or payment owed by either Piclux or Mr von Habsburg to Mr Dyer let alone making any sum not “payable”. Indeed it would be remarkable if such orders had such an effect. Mrs Dyer should be as interested as Mr Dyer in Mr Dyer establishing that he is owed the money he claims.
60.	I agree with Ms Prevezer that the effect of the Orders can at most be on the process of execution of any judgment this court might order in favour of Mr Dyer, but not on its ability to enter such a judgment if it thinks fit to do so. Mr Males was not inclined to pursue this submission very far. Rightly so.
CONCLUSION
61.	None of the suggested defences to Mr Dyer’s claim have, in my judgment, any real prospect of success for the reasons I have sought to express. Mr Dyer is entitled to summary judgment against Piclux for the principal sum he claims. He is also entitled to contractual interest. 
62.	Mr Males also, and again rightly in my judgment, accepted that the obligation on Mr von Habsburg to provide cheques to secure the payment by Piclux of sums due under the Share Sale Agreement was itself properly to be construed as an obligation to provide personal cheques. In the circumstances as I find them to be Mr Dyer should, and would but for Mr von Habsburg’s breach of contract, have been in a position to draw on those cheques. Mr Dyer is also entitled to judgment against Mr von Habsburg accordingly and on the guarantee contained in the Share Sale Agreement.
63.	I shall leave it to the parties to agree, if they can, the precise terms of the order to be made when this judgment is handed down. On that occasion I will also consider any ancillary matters which arise and cannot be agreed.