NASIR v Zavarco plc 2025 UKSC 5, 2025 A.C. 738 originated from a dispute as to whether Nasir had effectually discharged his €36 million debt to Zavarco. This debt was owed under Zavarco’s articles of association, as the price for Nasir’s subscription for certain shares in the company. Initially, each party sought their own declaration to clarify the legal position. After trial, a judge declared that (1) Nasir had not discharged the debt which had fallen in arrears; and (2) on that account, his shares became forfeitable to Zavarco. No appeal ensued. Nasir was unmoved by the declaration, however, which prompted Zavarco, upon forfeiting the shares, to bring a second action, this time claiming in terms an order that Nasir do pay the debt so declared. (Under the articles, Nasir “remains liable” for the price of the shares despite their forfeiture: at 7.) Nasir replied that this second action was barred by the doctrine of merger: that Zavarco’s cause of action for recovering the debt had merged in, and become extinguished by, the judgment in the first action, even though that was a purely declaratory judgment. This argument found favour with the Chief Master but failed before the judge and the Court of Appeal. A unanimous Supreme Court led by Lord Hodge has now dismissed Nasir’s final appeal. Zavarco’s payment claim may thus proceed.
Jonathan LT Chu (Tue,) studied this question.