Durnont Enterprises v Fazita Investment: fraud, jurisdiction and derivative claims in Polish real estate dispute

In Durnont Enterprises Limited v Fazita Investment Limited & Ors [2026] EWHC 405 (Ch), Mr Justice Rajah dismissed all applications by the first to fifth defendants to strike out the proceedings, obtain reverse summary judgement, challenge jurisdiction, and set aside permission to bring a derivative claim on behalf of Polish Real Estate Investment Limited (PREI).

PREI was a Cypriot joint venture vehicle holding all the certificates in a Polish closed-end investment fund — the Alpha Real Estate Fund — which in turn owned a portfolio of Polish property-holding subsidiaries. Durnont, the claimant, held 27.94% of PREI's shares on behalf of two Norwegian investors. The first defendant, Fazita, held 19.65% and represented the interests of the second and third defendants, Władysław and Michael Jaroszewicz.

Durnont alleged that Władysław and Michael orchestrated a fraudulent scheme to expropriate PREI's assets. The alleged mechanism involved manufacturing a purported debt of approximately €16 million owed to the fourth defendant, M-JWK — a portfolio company effectively owned through the Fund by PREI — which then obtained default judgement against PREI in the English courts in March 2017. Polish bailiff sales followed, through which M-JWK acquired PREI's fund certificates at a statutory 25% discount to their assessed value. Durnont's case was that assets worth approximately €100 million were stripped from PREI using PREI's own funds.

Serious issue to be tried

The court found a serious issue to be tried on all four heads of claim: the Polish Civil Code claims under Articles 415 and 422 against the first to fifth defendants; breach of fiduciary duty under Cypriot law by Władysław and Michael as directors of PREI; breach of the Share Subscription Agreement (SSA) by Fazita; and setting aside of the default judgement for fraud with consequential restitutionary relief.

On the SSA claim, Rajah J held there was a realistic argument that the SSA constituted a relational contract in which a duty of good faith was readily implied, drawing on Yam Seng Pte Ltd v International Trade Corp Ltd [2013]. The joint venture structure, which could only operate by consensus and depended on trust in Władysław and Michael for PREI's control of the underlying portfolio, supported that characterisation. The claim that Fazita breached the SSA — both through the conduct of its appointed director and by actively impeding PREI's defence of the M-JWK proceedings — raised issues fit for trial.

On setting aside the default judgement, the court applied the principles from Highland Financial Partners and confirmed by the Privy Council in Finzi v Jamaican Redevelopment Foundation Inc [2023] UKPC 29. Rajah J held there was a realistic argument that seeking default judgement in furtherance of a fraudulent plan constituted the requisite conscious and deliberate dishonesty, potentially engaging the illegality principle considered in Lewis-Ranwell v G4S Health Services [2026] UKSC 2.

Jurisdiction and forum

The court held that M-JWK, by bringing the original proceedings which resulted in the default judgement, had submitted to the jurisdiction of the English courts in respect of any application to set that judgement aside, even by separate action. England and Wales was the clearly appropriate forum: only the English court could set aside the default judgement; the SSA contained an exclusive English jurisdiction clause; and trying the claims in multiple jurisdictions risked inconsistent judgements and disproportionate cost.

Full and frank disclosure

The defendants argued for the service-out order to be set aside partly on the basis that the claimant's Polish law expert at the original without-notice hearing was not independent — he was Durnont's own Polish lawyer. Rajah J accepted this was a material non-disclosure but declined to set aside the order, finding the expert's evidence was nonetheless impartial and accurate, and that a proportionate approach to the interests of justice did not warrant such a drastic sanction.

The judgement offers a useful analysis of the interaction between the Finzi abuse of process test and derivative claims, alongside the extent of a foreign claimant's submission to jurisdiction when enforcing a default judgement obtained in England.

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