Source: https://abs.in.th/doc-f2-plain-4-or-5-num-single-spacing
Timestamp: 2017-08-23 21:25:24
Document Index: 376485289

Matched Legal Cases: ['EWCA ', 'art.81', 'art 30', 'art 27', 'art 27', 'art 30', 'art 27', 'art 23', 'art 23', 'art.26', 'art 20', 'art 20']

JULY 2008 REED SMITH RS SHIPPING BULLETIN 1 ARBITRATION .................................................................................... 2 1.1 ENFORCEMENT ........................................................................... 2 1.2 S 66 ARBITRATION ACT – APPLICATION TO SET ASIDE .................... 2 2 COSTS .............................................................................................. 4 2.1 SECURITY FOR COSTS AGAINST COMPANIES ................................. 4 3 EU ................................................................................................... 5 3.1 FOB CONTRACT .......................................................................... 5 3.2 LINER / TRAMP SERVICES ............................................................ 5 4 JURISDICTION. .................................................................................. 6 4.1 BRUSSELS REGULATION – ARTICLE 27 .......................................... 6 4.2 CJJA S 25 / FREEZING ORDER / NY PROCEEDINGS.......................... 6 4.3 CONCURRENT PROCEEDINGS ....................................................... 7 4.4 EXCLUSIVE JURISDICTION CLAUSE ............................................... 8 4.5 ROME REGULATION ..................................................................... 8 5 MISCELLANEOUS ............................................................................... 9 5.1 BAILMENT .................................................................................. 9 6 PRACTICE ....................................................................................... 10 6.1 AMENDMENT – PARTICULARS OF CLAIM ...................................... 10 6.2 AMENDMENT – PARTICULARS OF CLAIM (2) .................................. 10 6.3 CONSENT ORDER ...................................................................... 10 6.4 DAMAGES – ASSESSMENT .......................................................... 11 6.5 DISCLOSURE – CROSS EXAMINATION ON AFFIDAVIT – LITIGATION PRIVILEGE ............................................................................... 11 6.6 ENFORCEMENT ......................................................................... 12 6.7 FREEZING ORDER – NON-DISCLOSURE ........................................ 12 6.8 JUDGMENT DEBTOR – INFORMATION ........................................... 13 6.9 SERVICE OUTSIDE JURISDICTION – CPR 6.20 ............................... 14 6.10 STAY OF PROCEEDINGS ............................................................ 15 7 SHIPPING........................................................................................ 16 7.1 COLLISION – NEGLIGENCE ......................................................... 16 7.2 DEMURRAGE ............................................................................ 16 7.3 FREIGHT RATE ......................................................................... 17 7.4 FRUSTRATION .......................................................................... 17 7.5 LAYCAN – COA ......................................................................... 19 7.6 OFF HIRE ................................................................................. 19 7.7 REDELIVERY ............................................................................ 20 7.8 RIGHTSHIP APPROVAL............................................................... 20 7.9 RULE B ATTACHMENTS .............................................................. 20 7.10 SALVAGE / STOWAGE – DISPARITY PRINCIPLE ............................. 21 8 US ................................................................................................. 23 8.1 CLEAN AIR ACT ........................................................................ 23 4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN 1 ARBITRATION 1.1 ENFORCEMENT In R v V – Lawtel 16.7.08 the parties had entered into a consultancy agreement to advise and assist the applicant’s subsidiary in its negotiations with a Libyan national oil company, with the purpose of obtaining for the applicant’s subsidiary the approval of certain development plans. The claim concerned the applicant’s liability for further payments under the agreement. In arbitration, the applicant had contended unsuccessfully that the agreement was unenforceable on the grounds that it was not supported by consideration, that there was a breach of fiduciary duty, and that the agreement was illegal under Libyan law and contrary to English public policy. The tribunal held that the applicant had failed to establish that the agreement or the company’s performance of it were illegal under Libyan law. The tribunal also held that the agreement and the company’s performance under it did not violate English public policy. The applicant submitted that, since the contract was governed by English law and the arbitration was a domestic arbitration and the curial law was English law, the English court was entitled to go behind the facts as found by the arbitrators. The Commercial Court held that there was no conflict with public policy on the face of the award. On the contrary, the suggested violation of English public policy had been rejected by the tribunal, which concluded that the agreement was enforceable. On the face of it, therefore, there was no basis for challenging the award under s.68(2)(g) Arbitration Act 1996 or its enforcement under s.81. As regards contracts for the purchase of personal influence, it was only if performance of the contract would be contrary to the domestic public policy of the country of performance that it would not be enforced in England. The tribunal had concluded that the agreement was not in violation of the relevant provisions of the Libyan penal code. Accordingly the tribunal concluded that the contract was legal and enforceable in Libya. There was plenty of material before the tribunal that the contract was not illegal under Libyan law. The arbitrators expressly found that the contract was not illegal. The court would have concluded that neither the agreement nor the enforcement of the award made under it were contrary to English public policy principles. 1.2 S 66 ARBITRATION ACT – APPLICATION TO SET ASIDE In Colliers International Property Consultants and another v Colliers Jordan Lee Jafaar SDN BHD – Butterworths Law Direct 3.7.08 an order was made pursuant to s 66 Arbitration Act 1996 stating that a final arbitration award made in London against the Defendant should be entered as a judgment in the terms of the award. The Defendant applied: (i) to set aside that order; and (ii) for an extension of time to make an application under s 68 of the 1996 Act, challenging the award on the grounds of serious irregularity. The Defendant argued that the proceedings before the judge had been flawed on the basis that: (i) the claim form and the witness statement in support of the claim had not been signed; (ii) the Claimants had failed in their obligations of disclosure to the court when making an application without notice, in particular by failing to inform it that the claim form -2- 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN was to be served on the Defendant out of the jurisdiction; (iii) the form of the order had been defective; and (iv) the order had not been properly served on the Defendant in Malaysia because the documents had been incomplete. The Commercial Court judgment illustrates what evidence is necessary in support of such an application. As regards the procedural irregularities, the failure to sign the claim form and witness statement, and the omission of some pages from the exhibits that had been served on the Defendant in Malaysia, the court held that the proper remedy was to afford the Claimants seven days to serve the claim form and to get the statement duly verified by a statement of truth. The irregularities alleged were that the award in question had been obtained by fraud or that it was contrary to public policy, thereby bringing the case within s 68(2)(g) of the 1996 Act. The evidence before the court did not identify any fraud on the tribunal or any other conduct which had misled the tribunal. The strict requirements for a s 68 challenge had not been satisfied. The court found that there was no material non-disclosure on the without notice application. The claim form and supporting evidence stated that, if the court was not prepared to grant the order summarily, permission should be given to serve out of the jurisdiction in Malaysia, and an address there was given. Therefore the omission of express words that in all probability the order would be served in Malaysia was not a material non-disclosure. The draft order had led the judge to order that the Defendant had 14 days to apply to set it aside, rather than 24 days, which was appropriate for a claim served in Malaysia. However, no steps had been taken to enforce the judgment so no prejudice had been suffered. The service in Malaysia was not improper. The absence of copies of the exhibits to the witness statement did not invalidate service because CPR r.62.18(8) provided that service had to be effected as if the order were an arbitration claim form, ie all that was required was that the order be served. -3- 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN 2 COSTS 2.1 SECURITY FOR COSTS AG AINST COMP ANIES In Jirehouse Capital & Anor v Stanley Sherwin Beller & Anor – Lawtel 30.7.08 the Court of Appeal held that the power of the court to make orders for security for costs against "companies" under CPR r.25.13(2)(c) was without distinction and included unlimited companies and those having only an individual member. A distinction was drawn between this and the reference to limited companies under s 726 Companies Act 1985. The Court also considered the meaning of ‘reason to believe’ in CPR 25.13(2)(c). -4- 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN 3 EU 3.1 FOB CONTRACT In Uzinterimpex JSC v Standard Bank Plc [2008] EWCA Civ 819 the Claimant had sold the cotton FOB against payment under a letter of credit to the buyer, who in turn had entered into an advance payment guarantee with the Defendant. The buyer had managed to take control of the cotton without supplying the documents required under the letter of credit, and had passed the proceeds of the sub-sale on to the Defendant. The Court of Appeal held that no terms would be implied; the documents by which undertakings were given by banks and other financial institutions in support of international commerce should operate in accordance with the terms which appeared on their face. A further argument also failed that by taking control of the goods, the buyer accepted delivery under the contract and waived any discrepancies in the documents. The buyer did not obtain delivery under the contract but outside the contract and contrary to its terms. The seller’s argument that the proceeds of sale remained their property which could be recovered from the respondent, if permissible, was not sound. 3.2 LINER / TRAMP SERVICES European Commission guidelines on the application to maritime transport services of EC rules on restrictive trade practices (art.81) have now been published. As from October 2008, liner companies will have to assess themselves whether their business practices comply with competition rules; the guidelines will help maritime operators understand the implications of this change and provide details on market definition, information exchange and operational cooperation agreements between tramp operators, so called pool agreements. Copies of the guidelines are available from http://ec.europa.eu/comm/competition/antitrust/legislation/maritime/guidelines_ en.pdf Full details are provided in Marjorie Holmes’ client alert. 08-108 - Shipping - Maritime G... -5- 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN 4 JURISDICTION. 4.1 BRUSSELS REGULATION – ARTICLE 27 In Underwriting Members of Lloyd's Syndicate 980 and others v Sinco SA – Butterworths Law Direct 29.7.08 the claimants were the members of three Lloyd's syndicates for various years of account between 1999 and 2006. The Defendant was a Greek company carrying on business as a motor insurance broker. The syndicates issued proceedings against the Defendant in England in January 2007, but did not serve the claim form on the Defendant or tell the Defendant that they had issued it. In April 2007, the Defendant began proceedings against the syndicates in Greece and served them on the syndicates. The case was listed for trial in February 2009. The syndicates all challenged the Greek court's jurisdiction, relying on the English jurisdiction clauses. In March 2008, the Defendant applied for a stay pursuant to the Brussels Regulation, pending determination by the Greek court of its jurisdiction. The issues were (i) whether, once the English court had been seised with the issue between the parties in accordance with the claim form in the English action, it was also seised of the dispute in relation to the alleged breach of the exclusive jurisdiction clauses, pursuant to art 30 of the Brussels Regulation; and (ii) whether the cause and object of the jurisdiction clause claim in the English action was the same as that of the claims made in Greece, including the jurisdiction dispute, and should be stayed pursuant to art 27 pending the Greek court's determination as to whether it had jurisdiction over the Greek action. The Commercial Court held that the test in art 27 was whether the cause and object of the two sets of proceedings were the same and between the same parties. Article 27 did not completely eliminate the risk of irreconcilable judgments, as shown by the fact that in assessing whether the claims had the same object and cause, the defence was disregarded. If the proper approach was to look at the proceedings as a whole, and to ask what was the central, or essential, issue in the respective actions, the substantive claims advanced and the issues were different. The Greek action involved claims arising outside contract and founded on tort or statute. The English actions were founded on contract. The English proceedings were instituted first. The question was whether the claim for breach of contract in the jurisdiction clause claim should be separated from the claims of other breaches of the same contracts. It was not enough that one issue - jurisdiction - could arise in both action, and therefore the syndicates' argument as to art 30 would not be accepted. On the art 27 ground, the application would be dismissed. 4.2 CJJA S 25 / FREEZING ORDER / NY PROCEEDINGS In E.T.I. Euro Telecom International Nv v (1) Bolivia (2) Empresa Nacional de Telecomunicaciones Entel SA – Lawtel 28.7.08 the Court of Appeal held that the English court did not have jurisdiction under the Civil Jurisdiction and Judgments Act 1982 s.25 and the Civil Jurisdiction and Judgments Act 1982 (Interim Relief) Order 1997 to make a freezing injunction in aid of attachment proceedings in New York themselves said to be in aid of an -6- 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN ICSID arbitration. The foreign proceedings to which s.25 of the 1982 Act and the 1997 Order refer were proceedings on the substance of the matter. The application of s.25 of the 1982 Act to foreign substantive proceedings was confirmed by many references in decisions on s.25 of the 1982 Act. The notion of substantive proceedings might have to be given a liberal interpretation to ensure international judicial co-operation. On any view the English proceedings were not in aid of, or related to, any substantive proceedings in New York, however liberally those expressions were interpreted. The New York attachment proceedings constituted interim relief to protect assets pending the outcome of the ICSID arbitration. They were directed solely at assets in New York, and proceedings in England directed at assets in England could not be ancillary to the New York attachment. It was also held that arbitration proceedings were not “proceedings" for the purposes of s.25 and the 1997 Order. It was plain that arbitration was not intended to be included in s25(3)(b) of the 1982 Act. 4.3 CONCURRENT PROCEEDINGS In UBS AG and another v HSH Nordbank AG – Butterworths Law Direct 4.7.08 the parties had entered into a transaction involving different agreements for different aspects of an overall relationship, with different terms as to jurisdiction, some of which were governed by New York law and some by English law. A dispute arose and proceedings were commenced by the Claimants in England and by the Defendant in New York. The Defendant applied for an order that the English courts had no jurisdiction to try the claim which the Claimants sought to make. Consideration was given to art 23 of Council Regulation (EC) 44/2001. The Defendant submitted, inter alia, that the court could and should stay the proceedings in favour of the New York claim. It further submitted that the dispute related to parts of the relationship not containing an English jurisdiction clause, and in order to respect the parties' choice, it should be concluded that the dispute did not fall within the English jurisdiction clauses; and that the series of contracts between the parties made it clear that different aspects of the relationship were governed by different contracts containing different provisions as to law and jurisdiction. The Claimants submitted that it could not do so, or that if it could it should not do so, and that the English jurisdiction clauses were exclusive. The application would be allowed. The court only had jurisdiction under the Regulation if the art 23 precondition was met: namely that there was a dispute which fell within the contractual scope of a relevant jurisdiction clause. The fundamental question was as to the contractual meaning of the English jurisdiction clauses. The contracts in which the English jurisdiction clauses were found did not stand on their own. The case was one where the parties had entered into different agreements for different aspects of an overall relationship, with different terms as to jurisdiction. They had done that despite the fact that many different aspects of the various contracts were -7- 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN intertwined and interwoven. In order to limit the scope, and to ensure that the clauses had meaning, it was clear that each such clause focused upon matters directly relating to the contract in which it was found. The fact that the Claimants stated that the English jurisdiction clauses were exclusive compelled the conclusion. Accordingly, it was manifestly incompatible with a non-exclusive New York jurisdiction clause for a matter falling within it also to be the subject of an exclusive English jurisdiction clause. The English jurisdiction clauses were insufficiently wide to cover the dispute set out in the New York complaint. 4.4 EXCLUSIVE JURISDICTION CLAUSE In (1) ACP Capital Ltd (2) ACP Mezzanine Ltd v (1) IFR Capital Plc (2) Ing Bank NV – Lawtel 25.7.08 the applicant companies applied for the counterclaim of the first Defendant, save in respect of a part, to be stayed on the ground that the claims in the counterclaim arose under an agreement which contained an exclusive jurisdiction clause in favour of Jersey. The Defendant submitted that the Jersey jurisdiction clause in the advisory services agreement had been superseded by English jurisdiction clauses in the subsequent financing agreements between the parties. The applicant submitted that the jurisdiction clause in those other agreements could not have been intended to qualify or detract from the Jersey jurisdiction clause in the advisory services agreement. The Commercial Court held that the jurisdiction clauses in the later contracts did not abrogate or qualify the clause in favour of Jersey in the advisory services agreement. The issue was not the construction of the ambit of a single clause but the effect of a number of clauses in a series of contracts carefully drafted with the assistance of lawyers. In the counterclaim the allegations were of breaches of the advisory services agreement and of agreements other than the syndication strategy letter. The court therefore stayed the counterclaim, save for a part, on the ground that the claims in it arose under an agreement containing an exclusive jurisdiction clause in favour of Jersey. 4.5 ROME REGULATION Regulation 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) (593). [2008] OJ L177/6. came into force on 24.7.08. The Regulation sets out the law applicable to contractual obligations and shall apply to contracts concluded after 17.12.09, except for art.26 which shall apply from 17.6.09. -8- 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN 5 MISCELLANEOUS 5.1 BAILMENT In Kamidian v Holt and others – Butterworths Law Direct 30.6.08 the claim was for damage to a bailed chattel, namely an egg clock, alleged by the Claimant to be a Faberge, while in transit between England and Delaware where the clock was displayed at a Faberge exhibition. The Commercial Court held that the assistant curator of the exhibition was not liable to the Claimant as there was no bailment to him – (1) he did not receive the clock into his own possession (2) he did not agree to take possession of the clock, to look after it and to return it. He assumed no responsibility at all. The bailee's consent is fundamental to bailment. However, the bailment to the company which arranged the exhibition was on express contractual terms, which had been breached, causing loss and damage. -9- 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN 6 PRACTICE 6.1 AMENDMENT – PARTICULARS OF CLAIM In Davies & Ors v Jones & Anor : Lidl UK Gmbh & Anor v Davies & Ors – Lawtel 10.7.08 the respondent applied to amend the particulars of claim after the expiration of the limitation period to include a claim for breach of trust and a claim that the appellant was aware of the contract and held a retained sum under a constructive trust. The judge allowed the amendment and ordered the respondent to pay the appellant's costs. The Court of Appeal held that the judge had correctly held that a new cause of action could not be added by amendment after the limitation period had expired unless it arose out of the same, or substantially the same, facts as originally pleaded. It was clear that the claim for breach of trust arose out of the averments in the appellant's defence. There was no basis on which to interfere with the judge's decision on costs. It was normal for the applicant to pay the costs for an application to amend. 6.2 AMENDMENT – PARTICULARS OF CLAIM (2) In Kynixa Ltd v Hynes and others – Butterworths Law Direct 15.7.08 judgment was handed down on the issue of liability in favour of the Claimant against each Defendant for breach of contract and against the first and second Defendants for breach of fiduciary duty. Following the sending of the draft judgment to the parties, the Claimant's solicitors invited the judge, inter alia, to make certain further findings concerning the first and second Defendants. The Claimant contended that the evidence relating to that alleged breach of duty only crystallised after cross-examination of one of the witnesses. Further the alleged breach was clearly identified in the Claimant's closing submissions and no submission had been advanced by the Defendants regarding it. The Queen’s Bench court held that it was settled law that the court had power to permit an amendment which was sought after judgment had been given but before an order recording that judgment had been drawn up and sealed. However, before permitting such an amendment, the court had first to decide whether there were exceptional circumstances or strong reasons for taking an unusual course. It held that the Claimant should include its pleading on the issue in the statement of case on quantum. It seemed a wholly unnecessary waste of paper to amend the existing particulars of claim. The first and second Defendants could then respond appropriately when they served their defences. The costs of and incidental to that amendment were reserved for consideration after the trial on quantum. 6.3 CONSENT ORDER In Jason Kingsley Drummond v Pool Design Ltd – Lawtel 2.7.08 the Claimant sought an extension of time for service of particulars of claim. It submitted to the court a consent form - 10 - 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN that had not been signed by all of the Defendants, which the judge sealed. A Defendant which had not seen or signed the consent form, applied for the order to be set aside or discharged. The TCC held that the order should not be set aside in circumstances where the Claimant had not misled the court into believing that all the Defendants had been served. The court exercised its discretion under CPR r.3.1(2)(a) to extend the time for compliance with serving the particulars of claim. 6.4 DAMAGES – ASSESSMENT In Transafrik International Ltd v Venus Corporation Ltd – Butterworths Law Direct 22.7.08 it was held that the burden of proof in the assessment of damages remained on the party seeking to establish its entitlement to damages. Where the assessment was opposed, it was open to the defending party to take any proper points on the recoverability of the damages claimed, to cross-examine as to the substance of the damages claimed and to deploy its own evidence, subject to complying with court orders, as to the service of witness statements and expert reports. 6.5 DISCLOSURE – CROSS EXAMINATION ON AFFIDAVIT – LITIGATION PRIVILEGE In (1) West London Pipeline & Storage Ltd (2) United Kingdom Oil Pipelines Ltd (Claimants) v (1) Total UK Ltd (2) Total Downstream Oil Storage Ltd (3) Hertfordshire Oil Storage Ltd (Defendants) & Tav Engineering Ltd (Third Party) & Motherwell Control Systems 2003 Ltd (Fourth Party) – Lawtel 23.7.08 the Commercial Court heard an application by Part 20 Defendants to obtain specific disclosure of documents in the possession of the main Defendants/Part 20 Claimants. The issue was whether the court could go behind an affidavit claiming litigation privilege. It was held that privilege had not been established by the affidavit. (1) Litigation privilege protected communications at the stage when litigation was pending and which were made for the sole or dominant purpose of obtaining legal advice or conducting the litigation. (2) It was permissible to go behind an affidavit of documents, including one claiming privilege, for the purpose of determining the dominant purpose of the documents for which privilege had been claimed. If the court was not satisfied that the affidavit established the right to withhold inspection, the court could: (a) order inspection; (b) order a further affidavit; (c) inspect the documents itself; or (d) order cross-examination of the person swearing the affidavit, although that was reserved for extreme cases where there was no alternative. The weight of authority was that cross-examination could not be ordered in the case of an affidavit of documents. In the light of the overall approach in the CPR, in an extreme case where there was no alternative relief, it might be just to order such cross-examination rather than concluding, without such examination, that the evidence before the court did not - 11 - 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN establish a legal right to withhold inspection and ordering inspection. That in turn, however, should only be contemplated if it could be done without impinging to any material extent on the issues in the action, and only after the court had considered whether the position could be addressed by ordering further evidence to be produced on oath, or by inspecting the documents. (3) In the present case there were grounds for going behind the affidavit because it did not, on its face, establish privilege. The appropriate remedy was for a fresh affidavit to be sworn. 6.6 ENFORCEMENT In Kruk v British Seafood [2008] EWHC 1528 the Claimant had delivered a consignment of frozen fish to British Seafood at Grimsby. The Claimant obtained judgment in Poland to the effect that he was entitled to payment for the shipment. The main thrust of the Defendant’s argument, both in Poland and in the present proceedings, was that it had not been notified of the Polish proceedings, nor of the resulting judgment. The Polish judgment to be enforced had since been appealed. There was no stay of the entire appeal. The Queen’s Bench court thought that by dealing with the application immediately, a stay could be granted, should the outcome be that the judgment had been properly registered. It was held that the relevant principles were these: (a) What mattered most under Article 34.2 was not form but function; whether the defending party had been given a proper opportunity to contest the proceedings prior to the entering of judgment. (b) The mere fact that service has been found to be good in one State was not binding on the court of registration in another State and the court must always bear in mind that challenges made after the event were more difficult to sustain. (c) However, the court's findings relating to the service in one State may be taken into account in the other, because all the circumstances relevant to questions of service (including whether non-service was the defendant's fault) were to be taken into account by the court in considering the application of Article 34.2. Applying those principles to the facts of the present case, the Defendant had not made out any ground for setting aside the registration under Article 34.2. 6.7 FREEZING ORDER – NON-DISCLOSURE In (1) Fiona Trust (2) Holding Corp & Ors V Yuri Privalov & Ors – Lawtel 23.7.08 the applicants applied for summary judgment on certain issues raised in the defence of certain of the respondents. The first issue was a "non-disclosure complaint" alleging that the applicants had failed to make proper disclosure in that they had not disclosed that they had accepted certain impugned transactions. The second issue was a "non-investigations complaint" alleging that the applicants had failed to disclose that it had engaged agents who, in carrying out extensive investigations into the respondents, had used unlawful methods of investigation. It was argued that, in the light of previous judgments in the proceedings given by HHJ Mackie QC and Steel J, and what was said by them about the allegations of non- disclosure, it was not open to the respondents to continue to rely upon the allegations of non-disclosure in defence of the equitable claims against them. - 12 - 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN The Commercial Court held that the judgments relied upon did not debar the respondents from pleading and relying upon the non-disclosure allegations in order to resist the claims for equitable relief. However, on the facts there was no real prospect of the non-disclosure complaint constituting, or even contributing to, misconduct that would be a basis for withholding the equitable relief sought as (a) there was no pleaded allegation that the applicants deliberately withheld information that should have been disclosed, still less of positively misleading the court.; (b) there was no allegation that the non-disclosure had affected the course of the proceedings at their interlocutory stages; (c) the alleged non- disclosure would not affect the way in which the claim for equitable relief would be pursued and presented at trial, and its nature was such that it could never have done. Further, there was no sufficient connection between the investigation complaint and the equitable relief sought by the applicants to sustain the respondents' contentions. Accordingly, the investigations complaint and the non-disclosure complaint, considered together or separately, fell far short of amounting to a defence to the equitable claims that had any prospect of success. The application was therefore granted. 6.8 JUDGMENT DEBTOR – INFORMATION In Munib Masri (Claimant/Judgment Creditor/Appellant) v (1) Consolidated Contractors (2) International Co Sal (3) Consolidated Contractors (Oil & Gas) Co Sal (Defendants/Judgment Debtors) & (1) Toufic Said Khoury (2) Samer Said Khoury (Addressees/Respondents) – Lawtel 28.7.08 the appellant appealed against an order setting aside a without notice order directing the respondents to attend court and provide information about the means of two companies against which the appellant had an unpaid judgment debt. The companies had been incorporated in Lebanon and the respondents were both resident and domiciled in Greece. R1 had been a director of a corporate director of one of the companies, and R2 had been a director of the other. The appellant had applied for and been granted an order against the respondents under the CPR r.71.2 in order to obtain information to assist in the enforcement of the judgment. The Court of Appeal held that the order under the CPR r.71 had been made in the context of substantive proceedings in which the English court had and continued to have jurisdiction. It was ancillary to the exercise by the court of its substantive jurisdiction. R1 had a substantial connection with the proceedings in England and was not being "sued" within the meaning of Regulation 44/2001. Accordingly, the English court had had jurisdiction under Regulation 44/2001 to make an order under the CPR r.71. It held that Regulation 1206/2001 did not apply because there had been no request by the English court for the taking of evidence in another Member State. The examination of a director of a judgment debtor under the process in the CPR r.71 was outside the scope of Regulation 1206/2001. Where a judgment debtor had submitted to the jurisdiction of the Member State in which judgment had been given, it made sense to provide for the obtaining of information about the assets of the judgment debtor by an appropriate process in that jurisdiction. - 13 - 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN It also held that there was no reason why the CPR r.6.30(2) should not apply to an order made under the CPR r.71, especially given CPR r.71's close connection to the underlying action and its purpose. An order under the CPR r.71 could either be served out of the jurisdiction without permission or, where permission to serve the original claim form out of the jurisdiction had been required, with permission of the court. Given its natural and ordinary meaning, "an officer of that body" in the CPR r.71 was not wide enough to include a director of a corporate director of a judgment debtor. The reference to "that body" meant the judgment debtor. Accordingly, there had been no jurisdiction to make an order against R2. 6.9 SERVICE OUTSIDE JURISDICTION – CPR 6.20 In Cherney v Deripaska – Butterworths Law Direct 3.7.08 the Commercial Court considered the appropriate test under CPR 6.20 when exercising its discretion to service outside the jurisdiction. In this case there was inconsistent evidence as to whether an oral agreement was subject to English law and jurisdiction. It was held that the essential test under CPR 6.20 is that the claimant has to satisfy the court that England is the proper place in which to bring the claim. If so, the court has a discretion to permit service out. Even in a case where there is a dispute between two apparently credible witnesses the court should usually, before giving permission, be satisfied that the claimant's contentions about the alleged agreement provide a much better, or at least a better, argument in favour of there being the ground for jurisdiction alleged than of there not being one. In granting permission to serve out of the jurisdiction, the court was exercising an exorbitant jurisdiction over those who were not within its ordinary reach. In those circumstances, the court was justified in applying the good arguable test in that manner in order to avoid the risk of compelling individuals or companies to submit to a jurisdiction to which they ought not in truth to be made subject. Proof on the balance of probabilities would require a finding of fact, not a decision about the strength of arguments, and would probably require the availability of oral evidence and discovery. On the facts, the Claimant had a reasonable prospect of success. He had not, however, established a good arguable case that there was an oral agreement as to English law and jurisdiction. As to forum conveniens, the evidence suggested that the Claimant would not receive a fair trial in the instant case. He would face the risk of assassination or arrest on trumped-up charges. Those factors were all sufficient to make England the forum in which the case could most suitably be tried. Permission would therefore be given for the claim form to be served outside the jurisdiction. - 14 - 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN 6.10 STAY OF PROCEEDINGS In Equitas Ltd v Allstate Insurance Co – Butterworths Law Direct 17.7.08 the Defendant sought a stay of English proceedings on case management grounds, notwithstanding an exclusive English jurisdiction clause, in favour of Texan arbitration not actually involving the Claimant directly. The Commercial Court dismissed the application, holding that the fact that proceedings which it was sought to stay were brought in England pursuant to an exclusive jurisdiction clause was also of relevance in the context of case management powers. The burden on a defendant who sought a stay where a claimant had founded jurisdiction in England as of right was particularly significant where the jurisdiction of the English court was founded on a contractual provision. In the context of forum non conveniens jurisdiction, that was so whether the jurisdiction clause was exclusive or not. At common law, an English court would enforce the exclusive jurisdiction clause unless there was a strong or compelling reason not to do so. Where there was such a clause, in view of the presumption that parties should litigate where they had agreed to litigate, the circumstances in which a case management stay would be possible had to require rare and compelling circumstances. In the instant case, the Defendant had failed to provide a strong or compelling reason for the court not to enforce the jurisdiction clause. - 15 - 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN 7 SHIPPING 7.1 COLLISION – NEGLIGENCE In Krysia Maritime Inc v Intership Ltd – Butterworths Law Direct 1.7.08 the Claimant was the owner of 'KRYSIA', a fast support and intervention vessel. The Defendant was the owner of a dumb barge: 'EUROPA' (the barge). At the material time, the barge was supplying accommodation and other services to a floating production, storage and offloading vessel (FSPO) in the oilfield 'ERHA' approximately 60 miles off the Nigerian coast. On 29.9.06, the KRYSIA was ordered to deliver a cargo of oilfield equipment to the FSPO. The barge was moored on the starboard side of the FSPO. Whilst there, the KRYSIA suffered damage. A diving team subsequently found that the KRYSIA's number 1 port outer propeller had been fouled by a pick up rope and securing wire attached to the aft end of the Yokohama fender secured to the barge. The Claimant issued proceedings alleging that the damage to KRYSIA had been caused by the Defendant's negligence. A number of issues fell to be determined, including: (i) whether KRYSIA's outer port propeller had been initially fouled by the pick up rope or the aft securing wire; (ii) whether the pick up rope had been loose in the water or whether it had been tied to the pad-eye on the deck of the barge; (iii) whether the Defendant was liable for any defects found in relation to the aft fender's securing arrangements or the pick up rope; and (iv) whether the actions (or inactions) of the master of KRYSIA in manoeuvring the vessel immediately before the fouling had been contrary to good seamanship and/or negligent. The Nautical Assessor gave answers to a number of questions posed by the court. It was held that the barge was 70 per cent to blame for the damage and loss caused when a loose or slack rope attached to the aft end of a fender secured to the barge became entangled in the propeller of a support vessel which was manoeuvring alongside. The support vessel was 30 per cent to blame because the inattention or slow reaction of the master had allowed it to get too close to the aft end of the fender. 7.2 DEMURRAGE In London Arbitration 7/09 – 748 LMLN 2 the dispute concerned laytime at the discharge port. Charterers said the NOR had never been accepted, that laytime for two parcels of cargo had to be counted separately, that time should not count during the bunkering operation and that time for discharging did not count until the NOR had been tendered and accepted (clause 47). It was held that if a charterer could prevent laytime running by not accepting a notice it would lead to an absurd result. ‘Accepted’ probably meant ‘not rejected’ in that it was not immediately rejected because the ship was not ready. The deletion of a reversible laytime provision was held to be irrelevant and there was nothing to suggest the parties had in mind anything other than one period of laytime for both parcels of cargo. There were no grounds for preventing time from running whilst the vessel was bunkering and clause 47 was inapplicable as the vessel arrived on demurrage. - 16 - 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN The tribunal also emphasised the importance of complying strictly with the Small Claims Procedure if it is adopted, as the arbitrators agree to a very limited remuneration based on a contained and speedy procedure. 7.3 FREIGHT RATE In London Arbitration 7/08 – 748 LMLN 2 the tribunal considered the meaning of a clause in a charter on the Beepeevoy 3 form providing for freight to be ‘… MS95 for med min flat Lavera….’ The ship discharged at Cartagena and Tarragona, Spain. The dispute concerned the proper calculation of freight in light of the terms that had been agreed and the fact that those discharging ports had been used. The tribunal’s first impression was that if the voyage was to the Mediterranean, then the freight to be paid would be not less than that calculated on the basis of a voyage to Lavera so that if the Worldscale rate for the actual voyage exceeded that for Lavera alone, that higher rate would be paid, but that otherwise – and regardless of whether one or two parts were used – the Lavera rate would be used as the basis for calculation. It held that there was no compelling commercial reason to conclude that the parties had not agreed what they appeared to have agreed. If the owners had wanted to have freight paid on the basis that it always had to reflect the fact of a two-port discharge, and to achieve that by adding something on to the flat Lavera rate, they should have sought a formula which spelt that out. 7.4 FRUSTRATION On Tuesday 22.7.08, the Court of Appeal gave judgment in CTI Group Inc v Transclear - The 'Mary Nour', reported at first instance in the September 2007 bulletin. The facts The parties entered into an fob contract for the sale of a cargo of cement. Both parties knew that the goods would not be shipped by the Sellers themselves, but by a supplier with whom the Sellers had entered into a separate arrangement. Sellers had entered into a non-binding arrangement for the supply of the cement. Buyers were buying the cargo to distribute in Mexico, in breach of a cartel operated by a local company, Cemex. Cemex exerted pressure on the suppliers of the cement in Padang to withdraw their offer of the cargo. When Sellers entered into a similar arrangement with suppliers in Taiwan, Cemex exerted the same pressure, with the result that those suppliers also withdrew their offer. Sellers were therefore unable to provide a cargo to satisfy the contract. - 17 - 751981.00107/4713758 JULY 2008 REED SMITH RS SHIPPING BULLETIN The arbitrators had made a factual finding that the performance of the contract had become commercially impossible as a result of an unprecedented event [at least re the Padang cement], namely the intervention by Cemex to prevent the loading of the cargo. The issue Was the fob contract between Sellers and Buyers frustrated? As Moore-Bick LJ put it - 'it is important, in my view, to recognise that the root cause of the seller's inability to deliver the goods they had contracted to sell was the abuse by Cemex of its commercial position combined with the willingness of suppliers to acquiesce in its demands. The primary question in this case is whether such conduct was sufficient to frus…