No “Compelling Reasons” Threshold for Strike-Out After Grovit Abuse: Discretion Governed by the CPR Overriding Objective
1) Introduction
In Blackberry Ltd v Optiemus Infracom Ltd [2026] EWCA Civ 1004, the Court of Appeal (Civil Division) dismissed an appeal against a Commercial Court decision which (i) found that the claimant had committed “Grovit abuse” by deliberately leaving proceedings dormant for almost four years, but (ii) refused to strike out the claim as an abuse of process, instead permitting it to continue subject to conditions (notably, an interest restriction and a costs order).
The decision is significant for its clear rejection of a supposed rule that, once Grovit abuse is established, a claim must be struck out unless the claimant shows “compelling reasons” to the contrary. The Court of Appeal held that the correct approach under the CPR is a two-stage analysis: (1) whether there is abuse (an evaluative decision), and (2) if so, what sanction is just and proportionate under the overriding objective (a broad discretion).
The dispute arose from a 2017 contract under which the claimant software company alleged unpaid royalties/minimum royalties (USD multi-millions) against the defendant handset supplier. Proceedings were served in India in December 2019 under the Hague Service Convention; the defendant did not acknowledge service or file a defence. An automatic stay arose under CPR 15.11 in July 2020. The claimant waited until July 2024 to apply to lift the stay and seek summary judgment. The defendant applied to strike out for abuse of process.
2) Summary of the Judgment
- The Court of Appeal endorsed the judge’s framework distinguishing:
- Whether there was Grovit abuse; and
- If so, whether strike-out was the appropriate, proportionate response.
- It held there is no legal test that strike-out must follow absent “compelling reasons”; the court’s discretion is exercised under the CPR overriding objective and proportionality.
- It upheld the first instance judge’s decision that the claimant’s near four-year stasis was abusive (after pandemic-related service difficulties ceased to justify inactivity), but that strike-out was (by a narrow margin) disproportionate given the circumstances, including limited concrete prejudice and the availability of lesser measures (interest and costs conditions, case management tools).
- It rejected challenges to the judge’s evaluation of prejudice (witness attrition, accounting provisions, termination-notice arguments, and interest on amended claims) and confirmed that a defendant’s own disengagement can be relevant at the discretionary sanction stage.
- Because the appeal failed on strike-out, it also failed on lifting the CPR 15.11 stay (the defendant accepted the issues were closely linked).
3) Analysis
3.1 Precedents Cited and Their Influence
Grovit established that commencing and maintaining litigation with no intention to bring it to a conclusion can be an abuse of process. The Court of Appeal in the present case treated Grovit as the foundation for identifying the “species” of abuse, but emphasised that Grovit did not impose a rigid, default strike-out rule; it said strike-out would “frequently” be appropriate “if justice so requires”.
Board of Governors of the National Heart and Chest Hospital v Chettle (1998) 30 HLR 618 and the “compelling reasons” debate
The defendant argued that Chettle created (or confirmed) a legal rule that once Grovit abuse is found, the claim must be struck out unless “compelling reasons” exist. The Court of Appeal rejected that reading, holding:
- the relevant Chettle passage was a conclusion on the facts, not a rule of law;
- extracting “compelling reasons” as a binding legal threshold was an impermissible elevation of case-specific language into doctrine; and
- the CPR’s post-1999 case-management framework is inconsistent with importing a hard-edged overlay onto a broad discretion.
Watford Control Instruments Ltd v Brown [2024] EWHC 1125 (Ch) and Lloyd v Hayward [2024] EWHC 2033 (Ch)
The Court of Appeal preferred the approach in Lloyd (which declined to follow Watford) and agreed that the discretion at stage two is governed by the overriding objective and proportionality, not by a “compelling reasons” threshold.
Alibrahim v Asturion Fondation [2020] EWCA Civ 32, [2020] 1 WLR 32 (Practice Note) (“Asturion”)
Asturion was treated as authoritative for the two-stage structure: first decide whether the conduct is abusive; then decide what response is proportionate. Although the relevant discussion of lesser sanctions in Asturion was technically obiter, the Court of Appeal found it persuasive and consistent with the CPR’s architecture.
Purdy v Cambran [1999] CPLR 843 and Asiansky Television plc v Bayer Rosin [2001] EWCA Civ 1792 (and Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926)
These cases were relied upon to reinforce that, under the CPR, the court should avoid rigid pre-CPR strike-out taxonomies and instead make a broad, justice-and-proportionality evaluation, mindful of alternative sanctions and the effect on other court users.
Arbuthnot Latham confirmed the seriousness of wholesale disregard of rules and that abuse analysis can avoid limitations-driven constraints that applied to want-of-prosecution doctrine under Birkett v James. The Court of Appeal used these authorities principally to locate Grovit abuse within abuse-of-process principles rather than prejudice-based want-of-prosecution rules.
Pliego v Astor Asset Management 3 Ltd [2026] EWCA Civ 940
The Court of Appeal used Pliego (a case about “privilege hunting”) to underline a general principle: even for serious abuses, the court’s response depends on all the circumstances and must be proportionate; there is no principled basis for a special, presumptive strike-out rule for Grovit abuse when other grave abuses do not attract such a default.
While not in dispute on appeal, Denton framed the approach to lifting the CPR 15.11 automatic stay by analogy with relief from sanctions principles; the Court of Appeal’s dismissal of the strike-out appeal effectively sustained the continuation of proceedings under that approach.
3.2 Legal Reasoning
(A) The two-stage structure: abuse first, sanction second
The Court of Appeal endorsed the trial judge’s structure:
- Abuse stage (non-discretionary evaluative decision): whether the claimant made a deliberate decision not to progress the case, and whether the reasons objectively justified the resulting delay in light of its length.
- Sanction stage (discretionary): if abuse is found, the court chooses a response that best gives effect to the overriding objective, considering proportionality and available alternatives.
(B) Rejection of “compelling reasons” as a legal test
The core doctrinal holding is that the CPR does not accommodate a rigid rule requiring “compelling reasons” to avoid strike-out once Grovit abuse is found. Instead:
- the court’s discretion is broad and exercised under CPR 1.1 and CPR 1.2;
- the seriousness of the abuse is a factor in the balance, not a gateway to a special test;
- introducing “compelling reasons” would create arbitrary silos between (i) Grovit abuse, (ii) other abuses, and (iii) breaches of rules/orders (where flexibility and alternative sanctions are orthodox).
(C) Appellate restraint on discretionary case management
Although the Court of Appeal accepted the case was “borderline”, it emphasised that differing reasonable outcomes are possible on the same facts. Absent an identifiable error of principle, consideration of irrelevant matters, failure to consider relevant matters, perversity, or other recognised appellate bases, the first instance discretionary outcome should stand.
3.3 Impact
- Clarification of doctrine: The decision significantly strengthens the position that there is no “compelling reasons” threshold governing whether to strike out for Grovit abuse. References in earlier authorities to “compelling reasons” are not to be treated as laying down a binding test.
- Practical consequences for litigants:
- Claimants who deliberately pause proceedings risk an abuse finding, but should expect the court to consider proportionate alternatives (interest conditions, costs sanctions, tight directions, unless orders) where these adequately protect the court’s process.
- Defendants cannot safely “do nothing” and later treat their own inactivity as irrelevant at the sanction stage; under CPR culture, the court may weigh overall party conduct when choosing a proportionate response.
- Case management and resources: The judgment reinforces that protecting the court’s process includes deterrence, but deterrence operates within proportionality—consistent with the CPR’s emphasis on flexible, tailored remedies.
4) Complex Concepts Simplified
- “Grovit abuse”: using the court’s process for something other than obtaining a decision—typically by starting/maintaining a claim while deliberately not progressing it, often with an eye to reviving it later if advantageous.
- Abuse of process vs mere delay: even “inordinate and inexcusable” delay is not automatically abuse; the hallmark is the claimant’s deliberate decision not to progress proceedings, assessed against the objective adequacy of the reasons and the length of the delay.
- Strike-out (CPR 3.4(2)(b)): a draconian sanction removing a party’s statement of case (including, in practice, the claim). Even if abuse is established, strike-out is not automatic; the court must choose a just and proportionate response.
- Overriding objective (CPR 1.1): requires justice at proportionate cost, including expedition, fairness, resource allocation for other court users, and enforcement of compliance with rules/orders.
- Automatic stay (CPR 15.11): where no defence is filed within the specified period, proceedings can become stayed automatically; continuation requires an application (here treated through Denton-style relief from sanctions analysis, unchallenged on appeal).
5) Conclusion
Blackberry Ltd v Optiemus Infracom Ltd [2026] EWCA Civ 1004 confirms that, under the CPR, the consequence of Grovit abuse is not governed by a special “compelling reasons” threshold. The court must first identify abuse, then apply a broad, overriding-objective-based discretion to select a proportionate response. While Grovit abuse remains inherently serious and can justify strike-out, this case underscores that lesser measures—particularly where concrete prejudice is limited and fair trial remains possible—may properly vindicate the court’s process without extinguishing substantial claims.