Commercial Court finds prompt application and arguable defence justified setting aside judgment
Default judgment dispute proceedings have resulted in the High Court setting aside a judgment entered against a defendant in a complex commercial claim concerning an agency arrangement for the sale of cashmere products to Marks & Spencer.
Mr Christopher Hancock KC handed down judgment on 2 September 2026 in the Commercial Court in Inner Mongolia King Deer Cashmere Company Limited v Haian Ma [2026] EWHC 2256 (Comm). The application concerned Mr Haian Ma, also known as Harry Ma, who sought to set aside a default judgment entered against him on 12 July 2024, together with various freezing orders.
The underlying dispute concerned Mr Ma’s role as UK agent for Inner Mongolia King Deer Cashmere Company Limited (IMKD), which manufactured cashmere products in China for sale to Marks & Spencer. Mr Ma said his agency operated under an Exclusive Agency Agreement, under which his remuneration was the difference between the price at which products were sold to Marks & Spencer and the price at which IMKD supplied them to him.
IMKD had purported to terminate the agreement in September 2014. Mr Ma argued that the termination was a repudiatory breach and that he would have earned about $19 million in commission during the remaining term. He also advanced an alternative claim for compensation under the Commercial Agents (Council Directive) Regulations 1993.
The immediate issue before the court, however, was whether the default judgment should be set aside.
Under CPR 13.3, the court may set aside or vary a default judgment where the defendant has a real prospect of successfully defending the claim or where there is some other good reason for doing so. The court must also consider whether the application was made promptly. The judgment confirmed that the Denton criteria apply to applications to set aside default judgments.
The court rejected IMKD’s argument that the relevant delay should be calculated from the date by which Mr Ma was required to serve his defence. Instead, the relevant starting point was the date the default judgment was entered.
That meant the relevant period of delay was 18 days. Mr Ma’s solicitors had learned of the default judgment on 16 July 2024, and the application to set it aside was issued on 30 July 2024. The court concluded that the application had been made promptly.
The court also considered the circumstances surrounding Mr Ma’s failure to file a defence, including evidence concerning his health and difficulties accessing emails while in China. It accepted that he had been suffering from health problems, while finding that the majority of the 18-day period was attributable to his newly instructed solicitors needing to gather information and prepare the defence.
Mr Ma also had an arguable defence. The court considered that this, combined with the short delay and the circumstances in which his new lawyers had to prepare the case, outweighed the other matters relied upon by IMKD.
Mr Ma had also paid the costs of the earlier section 9 application with interest. The court considered that those costs had therefore been made good and should not result in him being denied the opportunity to defend the proceedings.
Mr Hancock KC concluded that the other circumstances relied upon by IMKD were insufficient to outweigh the fact that Mr Ma had an arguable defence and had applied promptly. He therefore proposed to set aside the default judgment.
The court will hear counsel on whether conditions should be imposed under CPR 13.1 and will also address the other applications made by the parties.