The Supreme Court Excludes The Doctrine Of Merger From Declaratory Judgments

In a landmark decision handed down in February 2025, the UK Supreme Court in Nasir v Zavarco PLC [2025] UKSC 5 unanimously held that the common law doctrine of merger does not apply to declaratory judgments.

The case was heard on appeal by a five-judge panel comprising Lord Hodge, Lord Hamblen, Lord Leggatt, Lord Stephens, and Lady Rose. The core issue was whether the doctrine of merger—which traditionally bars further relief on a cause of action once judgment has been given—extends to purely declaratory judgments.

The Court unanimously concluded that it does not. This decision marks a significant clarification of the doctrine’s boundaries and has important implications for litigants seeking declaratory relief.

Background of the dispute

The dispute involved whether Nasir had to pay for 360 million shares in Zavarco Plc after transferring them to a Zavarco subsidiary. Zavarco obtained a High Court declaration that the shares were unpaid and could be forfeited, which it then did before suing Nasir for the unpaid value. Nasir argued the claim was barred by the doctrine of merger, as the issue had already been addressed in the earlier declaratory judgment. The Chief Master agreed, but both the High Court and Court of Appeal overturned that decision, holding that merger does not apply to declaratory judgments. The Supreme Court upheld this view, confirming that Zavarco’s claim could proceed.

Legal reasoning

The doctrine of merger means that once a court gives its judgment, the original legal claim is effectively wrapped up into that judgment and can’t be pursued again. In English law, this means if a court rules on a claim, that claim is considered settled and can’t be brought again for more remedies. While the facts behind the case remain, the right to ask the court for anything further on that issue is gone.

In the Supreme Court ruling, Lord Hodge explained that this doctrine helps uphold the principle that legal disputes should eventually come to an end. He compared it to the idea of res judicata, which also stops the same issue being litigated more than once.

[17] The doctrine of merger was developed as a means to promote finality in litigation and to prevent duplicative and vexatious litigation. Unlike the standard defence of res judicata in the form of cause of action estoppel, which prevents the contradiction of an earlier judgment as to the existence or non-existence of a cause of action, merger was designed to make a litigant seek his or her remedies in one action by extinguishing a cause of action when judgment has been given on it.

The Supreme Court gave several reasons why the doctrine of merger shouldn’t apply to declaratory judgments:

• First, when the merger rule was developed, courts weren’t yet giving out declarations on their own. There’s no past case where this rule was applied to a purely declaratory decision – it’s only ever been used for judgments that require someone to do or pay something.
• Second, there are valid reasons someone might want a court to make a declaration before asking for further action. For example, it makes sense to first confirm that shares were forfeited before suing for the money owed.
• Third, allowing someone to get a declaration without blocking their right to later ask for compensation doesn’t lead to unnecessary or repeated trials.
• Fourth, the merger rule has been criticised for being too strict and sometimes unfair.
• Fifth, modern courts have better tools – like case management powers – to stop repeated or abusive lawsuits. So, there’s no need to stretch the merger rule to cover declaratory judgments.

The Supreme Court has drawn a clear line: the doctrine of merger only applies to coercive judgments – those that order payment or action – not to declaratory judgments. Since a declaration simply confirms legal rights without creating new obligations, it doesn’t wipe out the original claim. This ruling sharpens the boundaries of the merger doctrine and sets a key precedent.

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