News

  • Quadrant Chambers in the Legal 500 2020View More

    Thu, 26 September, 2019

    We are very pleased to be recommended as a leading set in nine different practice areas in the latest legal 500, including three top rankings. We have 117 individual recommendations and 55 barristers recommended across 15 practice areas in this year’s edition. We have 16 new entrants and 18 barristers moving up the rankings.

    We have new recommendations for Caroline PoundsPaul Henton and Ben Gardner in energy and natural resources and for Gemma Morgan in international arbitration. We have new entries in aviation for Emily McWilliams and Koye Akoni. Turlough Stone strengthens our banking recommendations. Tom Bird and Max Davidson are newly recommended in commodities. Guy Blackwood QC is our latest silk to be recommended for commercial litigation. Simon Oakes is in for Pensions, David Semark, Christopher Jay and Emily McWilliams all make this year’s shipping rankings and travel sees new entries for Tim Marland, Mark Stiggelbout and Emily McWilliams.

    We are recommended as a leading set for :

    • aviation - "'the kings and queens’ of aviation"
    • banking & finance - "...invested heavily in the banking and finance arena and now boasts an impressive cohort of well-respected and highly experienced silks and juniors."
    • commercial litigation - "Quadrant Chambers has ‘excellent strength in depth’ and many solicitors report they have ‘not felt the need to look beyond the set for commercial litigation work in the past couple of years’."
    • commodities - "frankly the range of talent available is now so good it is very strong set in terms of maritime law and commodity trade disputes"
    • energy - "simply an excellent set, with a number of strong energy practitioners."
    • insurance & reinsurance - "provides an ‘excellent service’ for insurance work and its expertise spans marine and non-marine cases."
    • international arbitration - "a popular choice for major arbitrations in the commodities, energy, maritime, and infrastructure sectors, and fields a strong cadre of experienced counsel and arbitrators."
    • shipping - "has the ‘strongest consolidated offering of shipping skills at the London Bar’ and offers a ‘very wide range of very able counsel and juniors'"
    • travel - "‘highly regarded’ for cross-border disputes and its members are regularly involved in high-profile aviation and shipping-related mandates."

  • P v D and the dangers of failing to cross-examine witnesses - Paul TomsView More

    Fri, 20 September, 2019

    This article was first published in the Practical Law Arbitration Blog, and can be found here.

    The judgment of Sir Michael Burton in P v D provides a salutary warning to those appearing as advocates in London seated arbitrations of the dangers of failing to cross-examine key witnesses on essential issues. In addition, it provides a salutary warning to arbitrators of the dangers of failing to ensure that “proper” cross-examination is conducted or of rejecting evidence on essential issues which has not been the subject of “proper” cross-examination.

    Facts

    D’s claim in the arbitration was (amongst other matters) for repayment of loans made to P.

    P contended that at a meeting in August 2015 between Mr E of P and Mr D of D, it was agreed that D would not demand repayment until 1 January 2018, which was then extended to 1 January 2020. P also contended that that agreement was confirmed at a further meeting with Mr D in June 2016.

    P, therefore, argued that D was estopped from claiming that the sums loaned were repayable, demand having been made prior to 1 January 2020.

    Both Mr E and Mr D gave written and oral evidence in the arbitration.

    There was no support for the alleged agreement in the documentary evidence. There was some hearsay evidence supportive of Mr E from other witnesses. A Mr J of D was present at the June 2016 meeting. When cross-examined, he said that he had no recollection of there being any discussion about repayment of the loans.

    Against that backdrop, Sir Michael Burton said at paragraph 14:

    “The stage was thus set for a contest of credibility between the two prime participants to be cross-examined in relation to what had been said, if anything, about an extension at the August 2015 meeting, said by P to have been confirmed at the June 2016 meeting”.

    In the event, the advocate for D did not cross-examine Mr E about the August 2015 meeting. In the course of the cross-examination of Mr E, the chairman of the tribunal pointed out to the advocate that he had not yet put any questions in respect of “the core issue”, as it had been described by the advocate for P.

    At paragraph 16 of the judgment, the judge set out the limited exchanges in cross-examination pertaining to the August 2015 meeting which, in fact, were raised by Mr E himself when being cross-examined about the June 2016 meeting.

    Mr D was cross-examined about the August 2015 meeting.

    The award

    In the award, the tribunal noted the following:

    “Mr E was not cross-examined at all on his version of events at this meeting. Whilst we do not expect each and every matter in dispute to be put punctiliously to witnesses in commercial arbitration, the decision not to put Mr D’s account of this potentially significant meeting to him in cross-examination was somewhat surprising”.

    Notwithstanding that observation, the tribunal held that P did not fully succeed in its estoppel argument in that the tribunal held that there was only an estoppel precluding a demand being made before 1 January 2018. The reason why the tribunal rejected P’s case that an estoppel arose preventing a demand before 1 January 2020 was because:

    • There was no agreement or promise extending the period of the loan to 1 January 2020 at the August 2015 meeting. In other words, Mr E’s evidence was rejected.
       
    • If there had been, “at most there was a promise, representation or common assumption that an extension [until January 2020] would need to be incorporated into a wider package which would cover other things as well”. In other words, any such estoppel would have been conditional on matters which were never fulfilled.
       

    The challenge to the Commercial Court

    There is no entitlement directly to challenge or appeal findings of fact contained in arbitral awards under the Arbitration Act 1996 (AA 1996).

    However, P brought a challenge to the award under section 68(2)(a) of the AA 1996, contending that there had been a failure by the tribunal to conduct the proceedings fairly, and to give it a reasonable opportunity of putting its case and dealing with that of its opponent as part of the tribunal’s general duty under section 33 of the AA 1996. P relied upon:

    • The fact that Mr E’s evidence that there was an agreement until January 2020 was not challenged in cross-examination and yet was rejected (ground one).
       
    • The fact that the argument that any common assumption or promise was conditional upon being “incorporated into a wider package…” formed no part of D’s case or Mr D’s evidence and was never put to Mr E (ground two).

    Ground one was an argument that it would not be a fair procedure for a tribunal to determine a core issue as to credibility against a particular witness of a party, unless that witness’ evidence had been directly challenged in cross-examination.

    Ground two was an argument that it would be unfair for the tribunal to determine an issue against a party by reference to a case not argued against it. (The failure to cross-examine also applied equally to ground two).

    The judgement and analysis

    P succeeded on both grounds.

    The court’s reasoning on ground two seems unobjectionable as there is no indication in the judgment that P could reasonably have understood that D was advancing the argument in question or, for that matter, that the tribunal was contemplating deciding the claim on that basis. Furthermore, the finding challenged under ground two was a major area of material primary fact. As Professor Merkin QC and Louis Flannery put it in Arbitration Act 1996 (5th edition):

    “… it may be normally contrary to the arbitrator’s duty to fail to give the parties an opportunity to address them on proposed findings of major areas of material primary facts which have not been raised during the hearing…”

    Given the judge’s conclusion on ground two, it is perhaps unsurprising that the judge reached the conclusion that he did on ground one given how connected the two grounds were. Indeed, at paragraph 34 he acknowledged that the inter-relationship between the two grounds made it much more difficult to determine whether there was an exception on the facts to the principle set down in Browne v Dunn that a party could not impugn the credibility of a witness without cross-examining on the relevant part of his or her evidence.

    Had it been possible to consider ground one in isolation from ground two, the court’s ruling would have been more finely balanced.

    Notwithstanding the judge’s characterisation that Mr E’s evidence as to the meeting of August 2015 was not challenged at all, the advocate for D, in the brief exchanges set out at paragraph 16 of the judgment:

    • Put it to Mr E that his evidence that an extension had been agreed prior to the June 2016 meeting was a “nonsense”.
       
    • In effect put it to Mr E that there was no credible basis upon which the parties would have ever agreed an extension until 2020.  

    Whilst the cross-examination was brief and at the highest level of generality, Mr E’s evidence was challenged. Furthermore, it appears from the judgment that the witness statement evidence of Mr D was such as to restrict the scope of permissible cross-examination, given that his evidence was limited to denying that there was an agreement without condescending to any particular detail of what was in fact discussed. Indeed, in his oral evidence, he said he had no recollection of the August 2015 meeting. Further, Mr E had had the opportunity to set out in detail his account of the meeting in his witness statement and, indeed, a supplemental statement made with knowledge of, and in response to, Mr D’s account.

    Given all of these matters, it may be questioned whether Mr E had not been given sufficient “opportunity of affirming or commenting on the challenge” to his evidence (see Floyd LJ in Edwards Lifesciences LLC and others v Boston Scientific Scimed Inc at paragraph 66).

    Be that is may, the case demonstrates that where, as here, a tribunal is concerned that a particular witness’ evidence on a key issue has not been sufficiently explored in cross-examination, the tribunal will need either to:

    • Make clear to the advocate for the other party both that it would be assisted by further cross-examination and the possible consequences if the evidence was not properly challenged, that is, that the tribunal might be left with no choice but to accept that evidence.
       
    • Assume the burden itself of asking questions of the relevant witness to satisfy itself of the credibility and correctness of that account.

     

            

    Paul Toms

    Paul is an experienced junior barrister practising across a wide range of commercial disputes. He is described as “A delight to work with. He is approachable, astute and commercially minded” (Chambers UK 2018). 

    He appears regularly in the High Court (mainly the Commercial and Circuit Commercial Courts) and in domestic and international arbitrations. He also has twice appeared in the Court of Appeal as sole counsel in addition to several other appearances alongside Queen’s Counsel. In 2017, he appeared in the Supreme Court in The Longchamp, which considered the meaning of Rule F of the York Antwerp Rules. Paul has particular expertise in commercial dispute resolution across a number of commercial sectors including information technology, insurance, energy, international trade, sale of goods, shipping and shipbuilding. As to commodities, he handles a significant number of GAFTA, FOSFA and ANEC disputes. 

    > To view Paul's full profile, please click here.

    paul.toms@quadrantchambers.com

  • Quadrant Chambers shortlisted three times at the Chambers & Partners Bar Awards 2019View More

    Thu, 05 September, 2019

    Quadrant Chambers is very pleased to be shortlisted three times at the Chambers & Partners Bar Awards 2019. We have been nominated for:

    • Shipping Set of the Year
    • Shipping Silk of the Year - John Russell QC
    • Shipping Junior of the Year - Benjamin Coffer

    Best of luck to all of those nominated. The Awards take place on 31 October at the Park Lane Hilton Hotel. 

     

    John Russell QC

    John is an experienced and determined advocate and has acted as lead Counsel in numerous Commercial Court trials, international and marine arbitrations and appellate cases, including in the Supreme Court. He relishes both detailed legal argument and cross-examination of lay and expert witnesses. He will always ensure that a client's case is presented in the most persuasive manner possible, both in writing and orally. John provides advice to a wide range of clients. He combines first rate technical legal analysis with a pragmatic, commercial, problem solving approach to cases. John accepts instructions in many fields of commercial dispute resolution with a particular focus on shipping, commodities, international trade and marine insurance.

    "Very easy to work with and a very good litigator." ..."An excellent advocate whose assessment of cases is invaluable." (Chambers UK, 2019)
    "He’s incredibly impressive, and is someone who always comes up with points that are insightful. He’s incredibly impressive, excellent on his feet and a joy to work with." (Chambers UK, 2018)
    "...Particularly highly rated, he has a sharp mind and provides clear advice...." (Legal 500, 2017)

    To view John's website profile, please click here.

    Benjamin Coffer

    Ben's broad international commercial practice has a particular emphasis on commodities, insurance / reinsurance and shipping. He undertakes the full spectrum of shipping work, including every species of charterparty and bill of lading claim, as well as shipbuilding and ship finance disputes. He has developed a particular specialisim in cases involving carriage of goods under the Hague and Hague-Visby Rules, and has appeared in several of the leading cases on such claims in recent years.  

    His significant recent cases include: The Aqasia [2018] EWCA Civ 276, settling a 90-year dispute as to whether Article IV.5 applies to bulk cargoes; Al Khattiya c/w Jag Laadki [2018] EWHC 389 (Admlty), which concerns the significance of the place of a collision in a forum non conveniens application; The Maersk Tangier [2018] EWCA Civ 778, the leading English case on package limitation for containerised cargoes under the Hague-Visby Rules; Volcafe v. CSAV [2017] QB 915, addressing the inherent vice defence and the burden of proof in cargo claims; The Lady M [2017] EWHC 3348 (Comm), the first modern decision on the meaning of 'barratry' and its effect on the defences availabe under the Hague Rules; and, The Sea Miror [2015] 2 Lloyd's Rep 395, the first case to consider the meaning of a term that cargo is to be loaded and discharged "at the expense and risk of Shippers/Charterers" .

    Ben is described by the directories as “a standout shipping and commodities junior" (Chambers & Partners, 2018), "a rising star" (Legal 500, 2019) and "He is truly the standout rising star for shipping and trading disputes work." (Chambers & Partners, 2019). He is also recognised as a leading junior in the Legal 500 Asia Pacific Guide.

    To view Ben's website profile, please click here.

  • Enforcing Foreign Judgments against States in England : getting it right …. and getting it wrong - Simon Rainey QC and Paul HentonView More

    Mon, 02 September, 2019

    Heiser and Others v Republic of Iran [2019] EWHC 2074 (QB)

    After a seven year jurisdictional battle, on 31 July the Court handed down judgment dismissing claims for recognition and enforcement of a series of US Judgments against Iranian State Defendants totalling over US$512 million (exclusive of interest).  Along the way the Court determined important questions regarding the application of f s. 31 of the Civil Jurisdiction and Judgments Act 1982 (“CJJA”), which sets out the jurisdictional requirements applicable to claims for recognition and enforcement of foreign judgments against state defendants.

    The twin requirements of s. 31(1) CJJA are that: (a) the overseas judgment would have been so recognised and enforced if it had not been given against a State, and (b) that the overseas Court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the UK in accordance with s. 2-11 of the State Immunity Act 1978.  These requirements are cumulative.  The burden of proof is on the Claimants to show they are each satisfied.

    s. 31(1)(a) - Presence

    As regards (a), the Claimants needed to show that the US Judgments would have been enforceable even if not entered against a State, this being a matter governed by English rules of private international law.  As the Judgment explains at para 60, those rules require either that the defendant had a presence in the overseas jurisdiction when the proceedings were instituted; or else some form of submission to the overseas Court.

    This was the first case to hear full argument at the inter partes stage on how the “presence” requirement is to be satisfied in the case of a State Defendant. The difficulty for the Claimants was that, as the Judge explained, State-to-State business is conducted through official channels such as diplomatic missions, consulates and the like, but “no such Iranian presence has been in the United States since the 1980s when the Government of Iran was officially expelled from United States’ territory” (see paragraph 70 at footnote 20).  The Claimants therefore sought to identify entities in the US through which it argued the Iranian State could be found to be “present”, or failing that sought to argue that the requirement of “presence” should be ignored altogether in the case of State Defendants. 

    The Judge had no difficulty rejecting the latter argument, which would have required the Court to simply ignore the express requirement of s. 31(1)(a), by which the requirement of presence was imported- see the various factors at paragraph 70 of the Judgment.  As the Judge explained, in the previous case of Adams v Cape [1990] 1 Ch 433, the Court of Appeal explained how the rules on presence as developed in the context of individual defendants were to be adapted and applied in the context of corporate defendants: the test being whether the company had established and maintained at its own expense a fixed place of business in the place where the Judgments were issued, and carried out the company’s business there for more than a minimal period of time (this being a multi-factorial test on all the evidence).  These requirements therefore similarly had to be adapted and applied in the context of State defendants.

    In adapting the multi-factorial test to State Defendants, the Court was influenced by the definition of a “State” in the UN Convention on Jurisdictional Immunities of States and their Properties, and by the guidance in s. 14(1) of the State Immunity Act 1978 (under which  references to States include agencies and instrumentalities of the State and representatives thereof acting in that capacity, as opposed to separate entities distinct from the executive organs of the Government of the States), as applied by the Privy Council in the case of La Générale des Carrieres et des Mines (Gecamines) v FG Hemisphere Associates LLC [2012] 2 CLC 709 at [29].  In particular, where a separate entity is formed for what on the face of it are commercial or non-sovereign purposes, with its own management and budget, the “strong presumption is that its separate corporate status should be respected, and that it and the State forming it should not have to bear each other’s liabilities”, and it will take “quite extreme circumstances to displace this presumption”.  See paragraph 83 quoting the relevant passages from Gecamines.

    Ultimately, the Claimants’ attempts to show presence failed on the facts.  The Claimants had therefore identified two entities in the US through which they argued the Defendants were “present”; however they had failed to adduce any admissible evidence to rebut the strong presumption which arises from their separate corporate status.  See paragraph 84 of the Judgment explaining that the admissible evidence adduced came “nowhere near the required threshold”.  An attempt to introduce a last-minute argument to the effect that the Iranian government was “present” in the US via its diplomatic mission to the United Nations in New York was rejected as it had been raised far too late and raised any number of new evidential enquiries- see paragraph 89.

    s. 31(1)(b) – State Immunity

    As regards limb (b) of s. 31(1) CJJA, this provides that the US Judgments could not be recognised or enforced unless the US Court would have had jurisdiction over the State Defendants “if it had applied” rules “corresponding to”  those applied in this jurisdiction under the State Immunity Act 1972 (“SIA”).  The difficulty here for the Claimants was that the US Courts had taken jurisdiction in tort claims regardless of the place in which the relevant acts/omissions were allegedly committed.  By contrast, applying rules corresponding to s. 5 of the SIA the State would have been immune from suit in tort claims unless these involved acts/omissions committed within the jurisdiction.  The Claimants therefore advanced various creative arguments on the meaning of “corresponding to” under s. 31(1)(b), and the meaning of “act” under s. 5 SIA.

    Unlike limb (a), limb (b) has been the subject of authoritative guidance from the Supreme Court in the case of NML Capital Ltd v Republic of Argentina [2011] 2 AC 495, which the Judge cited at paragraph 102 and proceeded to apply.  In that case, the Supreme Court held that the natural meaning of “corresponding to” is that: “mutatis mutandis the foreign State would not have been immune if the foreign proceedings had been brought in the United Kingdom”.  As the Judge explained, the Claimants’ submissions were contrary to that guidance, and would have imported so much “elasticity” into s. 31(1)(b) as to effectively disregard the hypothesis which that section requires to be applied- see paragraph 108.

    The Claimants also advanced alternative arguments along the lines that s. 31(1)(b) should be read down under s. 3 of the Human Rights Act 1998 if it did not produce the result which they were contending for, on the basis that such result would be contrary to customary international law and incompatible Art. 6 ECHR (by analogy with the very different case of Benkharbouche v Embassy of Sudan, in which aspects of the SIA relating to State Immunity over employment law claims were held incompatible with Art. 6).  The Judge had no hesitation rejecting that argument.  Amongst other things, the compatibility of s. 5 SIA with Art.6 ECHR had already been established by the European Court on Human Rights in the case of Al Adsani v UK - see para 130.  Moreover, the Supreme Court in Benkharbouche itself had considered that s. 5 was not inconsistent with customary international law in cases involving sovereign acts, since it merely introduced a further restriction to the doctrine of State Immunity in respect of such acts in cases where these were tortious and took place within the relevant jurisdiction- see paragraph 129 of the Judgment.

    The Judge also rejected imaginative arguments based on interpreting the word “act” within the jurisdiction for s. 5 SIA purposes as if it had read “damage” within the jurisdiction; as well as a late attempt by the Claimants to bring the case within s. 3 of the SIA.

    The Service Issues

    Since the proceedings fell to be dismissed on the basis of the State Immunity Issues and non-compliance with the requirements of s. 31 CJJA, the further set of issues before the Judge relating to service technically did not arise. Nevertheless, the Judge went on to decide the issues of whether the English proceedings and default judgment therein had been served within the mandatory requirements of s. 12 SIA.

    In so doing, the Judge gave valuable guidance on the meanings of “transmission” by the English FCO and “receipt at the Ministry” of Foreign Affairs of the State Defendant overseas.  In particular, the Judge held that physical “receipt” connotes more than just the leaving of documents at the Ministry and requires a positive act of assuming possession on the part of the Defendant.  Thus, where the Defendants refuse to receive documents, they cannot be held to have “received” them (see paragraph 236).  The Judgment also corrects a line of ex parte decisions in which the Court had been prepared to grant orders permitting service by email.  The requirements of s. 12 are mandatory, so no such order could be granted by way of alternative service, and service by email cannot be said to be already inherently permitted by s. 12 (see paragraph 239). 

    Simon Rainey QC and Paul Henton acted for the successful defendants, instructed by Mark Howarth and Liz Wild of Eversheds Sutherland. 

    A copy of the judgment can be found here

            

    Simon Rainey QC

    Simon Rainey QC is one of the best-known and most highly regarded practitioners at the Commercial Bar with a high reputation for his intellect, advocacy skills and commercial pragmatism. He has a broad commercial advisory and advocacy practice spanning substantial international contractual disputes, energy and natural resources, trade and commodities, and shipping and maritime law in all its aspects, in arbitration and at all Court levels, including three recent leading cases in the Supreme Court (Bunge SA v Nidera SA [2015] UKSC 43: sale of goods damages; The Global Santosh [2016] UKSC 20: liability for delegated performance and Volcafe v CSAV [2018] UKSC 61; Hague Rules burden of proof). His practice regularly involves substantial high profile and high value commercial disputes, typically involving fraud aspects, and heavy interlocutory stages centred around pre-emptive strike applications such as worldwide freezing injunctions and anti-suit and other injunctive relief, a recent example of which is the hard-fought Gerald Metals v Timis litigation in England, Cayman and the BVI (2017-2018). Cases  usually with an international aspect and often involving complex issues relating to jurisdiction, conflicts of law and enforcement. Of particular note, he was involved in the Antonio Gramsci litigation concerning a massive alleged fraud by the management of Latvian state owned companies and, in particular, by a number of leading Latvian politicians. The cases have led to a number of hard fought jurisdiction hearings and a consideration of entirely new principles of ‘piercing the corporate veil’, developed by him and successfully advanced for the first time in this case.

    He has extensive experience of international arbitration, regularly appearing as advocate under all of the main international arbitral rules (LCIA; SIAC, UNCITRAL; ICC, Swiss Rules etc) and also sitting as arbitrator. Current examples of his work as counsel are in arbitration before the Permanent Court of Arbitration in a US 13billion gas supply dispute; under Nigerian Law and seat in relation to an offshore oilfield redetermination dispute between oil majors, under UNCITRAL Rules in a mining supply take or pay dispute involving one of the world’s leading mine conglomerates; an ICC arbitration concerning a new mine development in Russia and an ICC Dubai seat arbitration involving specialist offshore vessels and in associated s67 and s68 LCIA challenges in the A v B [2017] EWHC 3417 (Comm) litigation in the Commercial Court.

    He is highly ranked by Chambers and Partners and Legal 500 as a first division international arbitration and energy specialist and as a leading commercial litigation practitioner. He features in the Legal 500 ‘International Arbitration Powerlist’.  He was nominated for both “International Arbitration Silk of the Year and Shipping Silk of the Year 2019” by Legal 500 and for “Shipping & Commodities Silk of the Year 2018” by Chambers & Partners. He was awarded “Shipping & Commodities Silk of the Year” 2017 by both Chambers & Partners and Legal 500.

    He sits as a deputy High Court Judge in the Commercial Court and is Honorary Professor of Law, Business and Economics, University of Swansea.

    “A fantastically intelligent and tactically astute barrister who is immensely erudite”; “A pleasure to work with. Fantastically intelligent and tactically astute.” ...”Personable and intellectually brilliant. He has the ability to sift through numerous documents and turn arguments into razor-sharp points that get straight to the core issues”; .”Meticulous and very thoughtful”;  “Simon is just brilliant at conveying the meaning of agreements and making complex things simple and persuasive.”... “He’s a very fluent advocate and a very good cross-examiner.”   (Chambers UK 2019)

    “Incredibly user friendly; a great advocate”; “Absolutely charming and probably the best cross-examiner I’ve ever seen”;  “A class act who’s proved himself to be a stellar performer; he’s fighting at the top of his game”; “One of the best commodities barristers – diligent and responsive, he is an excellent example of the modern QC.”; A senior QC with gravitas and an ability to provide crystal clear advice that gets to the bottom line”; ‘He is a gift to the Bar – he can always think a few steps ahead and understands both the legal and commercial perspectives.”;  ‘A first-choice QC for the very complicated cases” (Legal 500 2019)

    > view Simon's full profile

    simon.rainey@quadrantchambers.com

    Paul Henton

    Paul has a broad commercial practice with an emphasis on shipping and commodities, international trade, energy, banking, aviation, and insurance.  Within these fields his work covers the full range of disputes from charterparties to international sales to shipbuilding and FPSO construction/conversion disputes to banking/trade finance to insurance and reinsurance towers to State Immunity disputes to multi-million dollar international arbitrations and much more.

    For several years he has been recommended as a leading practitioner in the leading independent guides to the market.  He holds recommendations in Chambers UK, Chambers Global, Who’s Who Legal, Legal 500 UK, Legal 500 Asia Pacific, where he is recommended in a number of fields. The most recent (2019) described him as follows: "An excellent member of the team. He gets to grips with the technical issues quickly and is level-headed under pressure. His written work is excellent." (Chambers UK/ Global); “"Very responsive, articulate and clear, he thinks commercially rather than in a legal vacuum"(Legal 500 Asia Pacific); “Bright and commercial, he is very responsive and goes out of his way to help” (Legal 500 UK)

    Paul appears led and unled, or as part of a team where he leads more junior barristers. He has appeared at all levels of the Court system, including the Court of Appeal and the Privy Council. His first instance Court work is primarily in the Commercial and Admiralty divisions; but he also appears in the Chancery Division, Companies Court and Mercantile Courts.  He also acts in related interlocutory matters such as jurisdictional challenges, freezing orders and anti-suit injunctions and in appeals from/challenges to arbitration awards.  Paul’s practice has a strong international flavour and in recent years his work has taken him to Shanghai, Singapore, Dubai, Bahrain, Trondheim, Piraeus, Geneva, Jersey, and (ahem) Liverpool.

    > view Paul's full profile

    paul.henton@quadrantchambers.com

  • Confidentiality and transparency in arbitral applications - Nevil PhillipsView More

    Tue, 27 August, 2019

    This article was first published in the Practical Law Arbitration Blog and can be found here.

    The extent to which confidentiality debars disclosure or inspection of documents, or an award or associated document, in arbitration proceedings has long fuelled debate within the law reports.

    This has been the case in three differing contexts:

    • Applications to the court by a non-party (A) for sight of documents from an arbitration between B and C: see, for example, Dolling-Baker v MerrettLondon and Leeds Estates Ltd v Paribas Ltd No (2), and Glidepath BV v Thompson.
       
    • Applications to the court or to an arbitral tribunal by party A as against party B for permission to use in arbitration or court proceedings (between A and C) documents from the arbitration between A and B: see, for example, Ali Shipping v Shipyard Trogir and Emmott v Michael Wilson & Partners Limited.
       
    • Publication and anonymisation of documents and determinations in arbitral applications before the courts (for example, challenges under sections 24, 68 and 69 of the Arbitration Act 1996 (AA 1996)): see, for example, City of Moscow v Bankers Trust Co and Symbion Power LLC v Venco Imtiaz Construction Company.

    Two very recent decisions (The Chartered Institute of Arbitrators v B and others and Cape Intermediate Holdings Ltd v Dring, which focus, directly and indirectly, upon the first and third contexts above) illustrate that the requirement of confidentiality in arbitration may be diluted (or third party access to court documents may be permitted) where that is justified by considerations as to the “interests of justice”.

    First, in The Chartered Institute of Arbitrators v B and others, the Chartered Institute of Arbitrators (CIArb) appointed an arbitrator in a dispute between A and B at the request of A. B made an application under section 24(1)(a) of the AA 1996 for the removal of the arbitrator on grounds of bias. That was granted. Independently, the CIArb had commenced disciplinary action against the same arbitrator further to a complaint from a third party (also alleging bias and improper conduct).

    In order to facilitate its disciplinary proceedings, the CIArb made two applications to the court under the CPR: for copies of documents relating to the section 24 application by B (that is, statements of case, witness statements, written submissions and skeleton arguments), and for permission to rely on the same.

    The court (per Moulder J) granted the applications.

    As to access, Moulder J observed that non-parties have an express right to sight of statements of case and any judgment or order made in public in court proceedings (per CPR 5.4C(1)), whereas non-party access to other documents can only be permitted under the court’s discretion, and only where such documents are considered to be on the court record.

    In the latter regard, the court determined that it must strike a balance between preserving confidentiality and the interests of open justice, whether there is a legitimate interest on the part of the party seeking the documents, the reasons for seeking to preserve confidentiality, and any harm that might be caused by non-party access. Given that the disciplinary process against the arbitrator would be barred unless the documents were made available to the CIArb, access to the documents was therefore necessary in the interests of justice. As to the approach under CPR 5.4C, the court relied upon Cape Intermediate Holdings Ltd v Dring; as to the wider question of overriding arbitral confidentiality, the court relied upon Ali Shipping, Glidepath, Emmott, and City of Moscow.

    As regards reliance on the documents, the court granted declaratory relief under CPR 3.10 on the basis that this furthered the overriding objective in the CPR (applying Rolls-Royce Plc v Unite the Union and LD Commodities Rice Merchandising LLC and another v The owners/charterers of the vessel Styliani Z).

    Second, in Cape Intermediate Holdings Ltd v Dring, the Supreme Court confirmed the approach of the Court of Appeal to access to documents under CPR 5.4C (which was the approach adopted by Moulder J in the CIArb case above) and further emphasised the breadth of the courts’ inherent discretion as to access.

    In this regard, the court observed that, for the purposes of CPR 5.4C, “records of the court” connotes only documents and records that the court holds for its own purposes. It does not indicate every single document generated in connection with a case and filed, lodged or kept at court.

    However, Lady Hale went on to emphasise that (beyond CPR 5.4C, and pursuant to the principle of open justice), unless inconsistent with statute or rules of court, all courts and tribunals exercising the judicial power of the state have an inherent jurisdiction to determine what open justice requires in terms of access to documents or other information. In principle, the public should be allowed access not only to written submissions and arguments, but also to documents placed before the court and referred to during the hearing. This should not be limited to those which the judge has been asked to read or has said he or she has read. However, an application for access requires the kind of balancing undertaken in the CIArb case.

    Thus, the Supreme Court (in a case which was not concerned specifically with arbitration) expanded the scope for overriding the confidentiality of arbitral documents which derive from court proceedings (by indicating that it may be possible for a third party to obtain sight of and to rely upon documents which are beyond those which are “records of the court” for the purposes of the CPR).

    Accordingly, these recent decisions continue the trend under English law to acknowledge that arbitral confidentiality is not an absolute bar to disclosure of or access to arbitral documentation. Moreover, they emphasise that third party access to documents generated in arbitral applications before the courts remains possible, despite confidentiality, where an appropriate and sufficient interest can be made out; and such access is not limited by the wording of the CPR.

            

    Nevil Phillips

    Nevil’s practice envelops all aspects of commercial advisory and advocacy work, encompassing the broadest spectrum of commercial, international trade, commodities, shipping, energy, insurance, finance, and jurisdictional disputes and associated areas and remedies. He appears regularly in commercial arbitration (both domestic and international, with experience before a wide variety of arbitral institutions, bodies and trade associations, including LMAA, GMAA, LCIA, ICC and associated bodies), the Commercial Court, and the appellate courts. A significant proportion of Nevil’s practice involves high-value (unreported) International Arbitration work, especially in the Energy and Shipbuilding fields. 

    Nevil also has substantial experience as an arbitrator, and has also given expert evidence on English law to courts in other jurisdictions. 

     > To view Nevil's full profile, please click here.

    nevil.philips@quadrantchambers.com

  • Anti-arbitration injunctions: the implications of Sabbagh - William MitchellView More

    Tue, 20 August, 2019

    This article was first published in the Practical Law Arbitration Blog and can be found here.

    In Sabbagh v Khoury, the Court of Appeal confirmed the court’s jurisdiction to grant an anti-arbitration injunction (AAI) in exceptional cases where it would be vexatious and oppressive because of proceedings in England. Additionally, it held that it was not necessary for the exercise of that jurisdiction to show that England was forum conveniens.

    This blog briefly considers the implications of that judgment for parties seeking an AAI in the future and international progress towards harmonisation of the lex arbitri.

    Must there have been a prior determination of the scope of the arbitration agreement before an AAI can be granted?

    Two claims were advanced in the Lebanese arbitration in Sabbagh, a “share claim” and an “assets claim”. The court held the share claim was within the scope of an arbitration agreement. As to the asset claim, the court had previously determined on the defendant’s stay application that it was not within the scope of the arbitration agreement notwithstanding the arbitrators’ decision to the contrary.

    Having found that the share claim was within the scope of the arbitration agreement, the court found that it had no jurisdiction to grant an AAI in relation to that claim. The appropriate test was to consider whether if such a claim had been brought in English proceedings, the court would be required to stay those proceedings under section 9 of the Arbitration Act 1996 (AA 1996). If so, the court had no jurisdiction to grant an AAI.

    More specifically, a stay must be granted where the claim is in respect of a matter which, under the agreement, is to be referred to arbitration unless the agreement is null and void, inoperative, or incapable of being performed. The correct characterisation of a “matter” was set out by Popplewell J in Sodzawiczny v Ruhan at paragraph 43: the court should treat as a “matter” any issue which is capable of constituting a dispute or difference which may fall within the scope of an arbitration agreement.

    Sabbagh is authority, then, for the proposition that an AAI will not be granted to the extent that the issues under consideration in the arbitration are issues which are capable of constituting a dispute or difference which may fall within the scope of the agreement, so long as the agreement is not null and void, inoperative, or incapable of being performed.

    This wide wording is likely to be a difficult threshold for future applicants to cross. Consequently, it will only be in exceptional cases that an AAI could not be resisted on those grounds.

    However, it appears that it is not the inverse of that test that is required before an AAI could in principle be granted, subject to the discretionary factors. In that regard, Richards LJ cited Andrew Smith J’s comments in AmTrust Europe Ltd v Trust Risk Group SpA. There must be “no room for argument… either because it is common ground between the parties or because of a previous determination”.

    Richards LJ then concluded, at paragraph 113, that given the prior consideration of that issue on the stay application, it was within Andrew Smith J’s “category of a previous determination” and there could be no objection in principle to an AAI being granted in relation to the asset claim.

    Where does this leave a party who applies for an AAI, but where there has been no previous determination as to validity or scope of the arbitration agreement? Richards LJ considered that this was “a difficult question” (paragraph 111).

    Difficult, perhaps, but surely important as it goes to the heart of how jurisdictions honour the principle of kompetenz-kompetenz. It is also one which the English court, post-Sabbagh, is likely to grapple with sooner rather than later.

    If the AAI applicant asserts that there simply was no agreement at all, then it may be that, as in a stay application, the court will determine the issue of whether there was such an agreement (Dallah Real Estate v Ministry of Religious Affairs of the Government of Pakistan). Whether the court will determine scope is less clear. It is hard to imagine that, in the clearest of cases, it would refuse to do so.

    How does the approach in Sabbagh compare internationally?

    Despite the New York Convention and Model Law making some progress towards international harmonisation of arbitral law, and the international application of the kompetenz-kompetenz principle, the absence of explicit provision in either for or against AAIs has promulgated a disparity of approach internationally. Sabbagh does not reverse that trend.

    Hamblen J, as he then was, granted the first AAI, which relied, at least partly, on grounds of vexatious and oppressive conduct, in Claxton Engineering v TXM. In doing so, he noted that the issue of AAIs was a matter of “great international debate and controversy”. Controversial, perhaps, because of the disputed incursion into the kompetenz-kompetenz principle.

    The English position is now clear: the arbitral regime introduced by the New York Convention and, domestically, the AA 1996, did not explicitly or impliedly displace the underlying jurisdiction under section 37 of the Senior Courts Act 1981. For that reason, in exceptional cases, an AAI can be granted.

    However, it is notable that in considering whether the AA 1996 precluded the court’s power to grant an AAI, Richards LJ, at paragraph 57, drew particular attention to the deliberate substitution of “should” for “shall” in section 1(c) of the AA 1996 which adopted Article 5 of the UNCITRAL Model Law (the principle of non-intervention). The intention was not to preclude intervention but to ensure caution.

    This appears to solidify an English divergence from jurisdictions where the kompetenz-kompetenz principle and more stringent UNCITRAL regime have been adopted. For example, in France, the Civil Procedure Code provides that a court shall decline jurisdiction when a dispute subject to an arbitration agreement is brought before a court, except if an arbitral tribunal has not yet been seized of the dispute and if the arbitration agreement is manifestly void or not applicable. In other jurisdictions, such as the USA, the position remains unclear.

    For the moment, at least, any move towards reducing differences of national arbitral procedural law will continue to struggle with AAI jurisdiction.

     

            

    William Mitchell

    Will has a broad and growing practice spanning all areas of Chambers’ work, particularly in Arbitration. He appears regularly as sole counsel in the County Court and High Court on a wide range of matters as well as in arbitrations under LMAA and ICC rules. He recently appeared in the High Court (as sole counsel, against leading counsel) for the defendant airline in relation to applications concerning an anonymous witness. He is also regularly instructed as a junior alongside other members of Chambers on complex matters. Recent and ongoing cases include him acting with Nigel Cooper QC and Gemma Morgan for a designer in relation to claims arising out of the capsize of a high-performance racing multi-hull; and advising and pleading in numerous bill of lading and charterparty disputes.

    > To view William Mitchell full website profile, please click here.

    william.mitchell@quadrantchambers.com

  • Quadrant Chambers to welcome Robert Ward as a new memberView More

    Mon, 29 July, 2019

    Quadrant Chambers is delighted to welcome Robert Ward as a new member of chambers. Robert has accepted our offer of tenancy and will join on successful completion of pupillage in October 2019. 

    Robert will develop his practice in line with our core areas of work. 

    Quadrant Chambers holds a pre-eminent position as a leading international commercial disputes set with a strong sector driven approach. We are market leaders with a reputation for excellence in our areas of focus: aviation and travel, banking and financial services, commercial disputes, commodities and international trade, energy and natural resources, insurance and reinsurance, international commercial arbitration and shipping.

    Robert Ward

    During pupillage Robert has sat with Chris Smith, Tim Marland, Paul Toms and Stewart Chirnside, working on aviation, commercial, civil fraud, insurance and shipping matters. He will continue to develop his practice in chambers' core areas. 

    Education

    • Bar Professional Training Course: University of Law (2014-15) - Very Competent
    • Postgraduate: Trinity College, Oxford – BCL (2013-14) - Distinction
    • Undergraduate: Worcester College, Oxford – BA in Jurisprudence (2010-13) - Distinction in Moderations; 2.1 in Finals
    • Secondary School: St Marys RC Comprehensive, Menston, Leeds - 11A* Grades at GCSE; A-Levels: Geography (A*) History (A*) English Literature (A*) French (A*) General Studies (A*) Maths (A)

    Awards and Prizes

    • Best A-Level results at St Marys
    • Undergraduate Scholar at Worcester College
    • Hogan Lovells Prize Runner-Up 
    • Michael and Judith Beloff Scholarship
    • Fitzgerald Award, Middle Temple 
    • Chancery Prize, University of Law 

    Legal Employment

    • Robert was a full time as a legal research assistant with the Law Commission as a member of the Commercial and Common Law Team. He was involved was reform of the Bills of Sale Acts. The final report has now been published.
    • Robert also worked on a project with the Law Commissioner for Commercial and Common Law, Stephen Lewis, looking at possible reform of the Arbitration Act 1996 in its 20th anniversary year.
    • From October 2016 to August 2017 Robert worked as judicial assistant to Lord Justice Longmore in the Court of Appeal. 
    • From November 2017 to August 2018 he was a freelance County Court advocate with LPC Law, acting in a variety of small hearings such as mortgage repossession cases, landlord and tenant matters, and bankruptcy hearings.

    Publications

    • Bills of Sale, Dear IP, Issue No 69, September 2015 (co-written with Fan Yang)
    • Bills of Sale, Law Commission Report No 369

    robert.ward@quadrantchambers.com

  • Simon Oakes appointed to the Attorney General’s C Panel for CounselView More

    Fri, 19 July, 2019

    Congratulations to Simon Oakes who has been appointed to the London C Panel of Junior Counsel to the Crown. Simon is appointed to the panel for a period of 5 years commencing 2 September 2019. 

    Simon practises in commercial law, with a particular focus on banking & financial services, and complex commercial fraud cases.

    Simon has a wealth of experience in some of the most significant banking and financial services cases of recent years, from major interest rate hedging product litigation to regulatory investigations against individuals. He has a deep knowledge of the allegations of LIBOR misconduct against several major banks, a great deal of experience in misselling cases, and a wealth of experience of developing legal and tactical arguments in major commercial litigation.

    Significant recent instructions include:

    • Three ongoing multi-million pound deceit claims against Bank of Scotland and/or Lloyds Banking Group
    • Providing expert advice in multiple, High Court cases as to the impact of Brexit on the security of European motor insurers, and FSCS protection.
    • Aldersgate & Ors v Bank of Scotland & Anor [2018] EWHC 2601 (Comm): a Commercial Court claim in excess of £100 million, alleging fraudulent and negligent misrepresentation arising out of LIBOR manipulation. The case also involved a ground-breaking interlocutory application by the defendant, attempting to withdraw pleaded admissions of findings by global regulators.
    • The LIBOR test case of Graiseley Properties Ltd v Barclays Bank Plc, Deutsche Bank AG v Unitech Global Ltd [2013] EWCA Civ 1372 (CA), in the Court of Appeal and in the High Court. One of The Lawyer’s ‘Top 20 cases’ of 2013.
    • Hockin v Royal Bank of Scotland in the High Court: a £55 million Financial List banking case concerning interest rate products and the bank’s Global Recovery Group (‘GRG’), and involving issues of misrepresentation, LIBOR manipulation, unlawful means conspiracy and implied duties of good faith.
    • Viavi v Shannan & Others [2018] EWCA Civ 681: a significant dispute about the validity of deeds, the principle in Re Duomatic, and estoppel by deed.

    Having been seconded to both the Financial Services Authority and the Pensions Regulator, Simon has an excellent understanding of how regulators approach cases. He has acted both for and against the targets of regulatory action, including in multi-jurisdictional cases.

    Simon is frequently instructed as sole advocate in the High Court, County Court and Employment Tribunals. He also acts as part of larger counsel teams on long-running commercial litigation.

    > view Simon's full profile

    simon.oakes@quadrantchambers.com

  • Beware of taking too many bites of the cherry: the effect of res judicata by merger - Robert-Jan Temmink QCView More

    Wed, 17 July, 2019

    In a characteristically careful and considered judgment handed down today, Chief Master Marsh declared that the Court had no jurisdiction to hear a claim for €36,000,000 and dismissed the Claimant’s action against the Defendant.

    The Claimant, Zavarco PLC, sought €36m and accrued interest as a debt from the Defendant, Mr Nasir.  The basis of the claim was that the Defendant had formerly held shares in the claimant company; he was required to pay for the shares in cash but had failed to do so.  The Defendant maintained that his shares in the Claimant had been paid for by the transfer to the Claimant of valuable shares in another company.  That defence was dismissed in a claim brought in 2016 and, as a result, the Claimant forfeited the Defendant’s shares.  Despite forfeiting the shares the Defendant remained liable to the Claimant as a debtor for the nominal value of the shares.

    The Court in the first proceedings made two declarations:

    1. That the Defendant’s shares in the Claimant were unpaid;
    2. That the Claimant having taken steps under the Articles to call for payment, and payment not having been made, the shares could be forfeited by the Company.

    It was not suggested by the Claimant that it had been unable to include a claim for payment in the 2016 proceedings either in addition to, or in the alternative to, the claims for declarations.  Nor did the Claimant assert that the 2016 proceedings were simply preliminary issues, leaving over an entitlement to pursue further relief, or that the Claimant could have sought further relief in the 2016 proceedings.

    Faced with a second claim, served on the Defendant in Singapore, the Defendant applied pursuant to CPR Part 11.1 for a declaration that the Court had no jurisdiction to hear the claim through the operation of the doctrine of res judicata by merger.

    The basis of the claim was that the facts pleaded in both sets of proceeding were identical; the parties were identical and the causes of action were identical.

    The Chief Master considered the leading cases on res judicata by merger: the judgment of Arden LJ in Clark v In Focus Asset Management [2014] 1 WLR 2502; Lord Goff in Republic of India v India Steamship Co Ltd (No.2) [1998] AC 878; and Lord Sumption in Virgin Atlantic Airways Ltd v Premium Aircraft Interiors UK Ltd [2014] AC 160.  The Chief Master also carefully considered passages from Palmer on Companies and Spencer, Bower & Handley on Res Judicata.

    The Claimant’s submissions contended there had been no merger and accepted that there was no authority within England & Wales which either supported or contradicted the view in Spencer Bower & Handley that the doctrine of res judicata by merger did not apply in the case of a declaratory judgment.  The Defendant submitted that the text book did no more than express an opinion on that issue and in any event the declarations sought and obtained by the Claimant in the 2016 proceedings were valuable (enabling the Claimant to forfeit 360,000,000 shares).  The Chief Master agreed with the Defendant’s submissions: whilst the grant of a declaration may not lead to merger in every case, that depends on the nature of the claim and the terms of the declaration: the doctrine of merger will only apply if the cause of action in both claims is the same.  As for determining whether the cause of action is the same in two claims, it is right to look at the substance of the claims and to consider whether they arise from the same breach.

    In this case all the essential elements of merger had been made out.  The Claimant’s cause of action merged in the judgment of the Court in the 2016 proceedings and was thereby extinguished.  Accordingly, the court had no jurisdiction to deal with the claim and the Claimant’s second proceedings were struck out.

    What this case really highlights is the necessity to bring all elements of a claim before the Court in one go.  The Court will look to the substance of a cause of action to determine whether there has been res judicata by merger and will be astute to ensure that Claimants can’t keep using the Court’s resources on a repeated and piecemeal basis when all matters could have been dealt with in one go.  On this occasion the Court did not need to consider the Defendant’s further submissions about Henderson v Henderson abuse which might also have been a route by which the Court managed further proceedings by the same parties on the same facts arising from the same cause of action.

    Robert-Jan Temmink QC of Quadrant Chambers acted for the successful Defendant and was instructed by Lee Donoghue of Teacher Stern in London.

    The judgment can be read here: Zavarco PLC v Tan Sri Syed Mohd Yusof Bin Tun Syed Nasir [2019] EWHC 1837 (Ch)

            

    Robert-Jan Temmink QC

    Robert is recognised as a talented advocate with a commercial practice encompassing a broad spectrum, from Chambers' core areas of aviation and shipping, to energy, construction, and insurance law together with financial services, insolvency and fraud. Many of Robert's cases involve cross-border, or other jurisdictional issues both in the UK and abroad and he most regularly appears in the Commercial, Chancery and Technology & Construction courts in the United Kingdom. He is also registered to practice at the Dubai International Financial Centre Court where he has frequently appeared and is called to the Bar in Northern Ireland and as a Foreign Legal Consultant in the State of New York. He is often asked to work on cases in the Caribbean (he is called to the bar of the Eastern Caribbean) arising out of contractual or commercial chancery disputes.

    Robert is a Fellow of the Chartered Institute of Arbitrators and is one of the arbitrators at the Dubai International Arbitration Centre. He is also a panel arbitrator at the Kuala Lumpur International Arbitration Centre and the Hong Kong International Arbitration Centre.  He has appeared in a wide variety of arbitral proceedings under different institutions' rules, and as sole or a panel arbitrator in ICC and LCIA proceedings. Robert is an accredited commercial mediator in the UK and abroad and is a TECBAR-accredited adjudicator, arbitrator and mediator.

    Robert is ranked as a leading barrister in the current editions of Chambers UK and The Legal 500. Areas include commercial dispute resolution, international arbitration and aviation.

    "An excellent advocate who is charming, very agile and someone with a very creative mind." ... "He gives clear, well-argued advice on how to proceed, and his drafting is excellent."  (Chambers & Partners 2019)

    robert.temmink@quadrantchambers.com

    > view Robert's profile

  • Charterparty ‘keep vessel in class’ obligations… are NOT conditions - Simon Rainey QC and Natalie MooreView More

    Wed, 10 July, 2019

    Ark Shipping Company LLC v Silverburn Shipping (IOM) Ltd, “ARCTIC” [2019] EWCA Civ 1161

    Overview

    A demise charterer is under an obligation to keep the vessel in class during the term of the charter. Is that a condition of the charter so that if the vessel is out of class for a day, the owner can terminate the charterparty and claim damages for the remainder of the term, even if the effect on it is nugatory (if there is any effect at all)?

    The sole question of law on this appeal was whether the term in a bareboat charterparty obliging charterers to “keep the vessel with unexpired classification of the class indicated in Box 10 and with other required certificates in force at all times” was a condition or an innominate term.

    In their partial final award, two experienced LMAA arbitrators held that the term was not a condition.

    Reversing the arbitrators and allowing the Owners’ appeal, brought pursuant to s.69 of the Arbitration Act 1996, Carr J held that the term was a condition, breach of which entitled the Owners to terminate the charterparty for any breach, however slight and of whatever duration and irrespective of the effect on Owners. The Charterers appealed from that judgment to the Court of Appeal.

    The Court of Appeal strongly disagreed with the analysis of the ‘keep vessel classed’ term as a condition and, in line with the modern and very sparing approach to ‘conditions’ (cf. Spar Shipping on non-payment of hire), the Court held it was an innominate term, not a condition. To be able to terminate for breach of the term therefore required the owner to show a breach going to the root of the contract and depriving it of substantially the whole benefit of the charter (something the owner did not even allege).  Given the similarity of wording of time charter terms where the corresponding obligation is on the owner, the decision is of importance in this context also.

    The charterparty

    The vessel was chartered to the Charterers under a 15 year charter on an amended BARECON 89 Form dated 17 October 2012.

    Box 10 provided for the vessel to be classed by Bureau Veritas. 

    The classification obligation set out above appeared in the middle of a clause 9A which dealt with the Charterers’ obligations in relation to the maintenance and operation of the ship.

    Clause 13 of the charterparty required the charterers to insure the vessel against P&I risks. If the Charterers failed to keep the ship so insured, the Owners were to notify the charterers and charterers were to rectify the position within seven running days, failing which the Owners had the right to withdraw the vessel from service.

    The facts

    The vessel was delivered into service in 2012. 

    On 31 October 2017, the Vessel arrived at the Caspian port of Astrakhan for repairs and maintenance.  Her class certificates expired on 6 November 2017, before she entered dry dock for repairs and some five years after her last special survey.

    On 7 December 2017, the Owners sent a notice to the Charterers purporting to terminate the charterparty.   The notice raised an issue with hire payments and complained about the condition of the vessel and the fact that the vessel’s class certificates were overdue.

    The Charterers denied any breach and resisted the Owners’ demands for redelivery of the vessel.

    The Owners therefore commenced arbitration and sought relief including an order for delivery up of the vessel under s.48(5) of the 1996 Act.

    The award

    The arbitrators dismissed the Owners’ application.  With regard to the alleged non-payment of hire, they held that the December notice was wrongful and invalid.  They held that the charterers’ obligations under clause 9A to maintain the vessel and keep her in class were not “absolute”, but merely required the exercise of due diligence.  The arbitrators held that the obligation to keep the vessel in class was part and parcel of the obligation to maintain and repair the vessel.  They also rejected the submission that the classification obligation was a condition.

    The first instance decision

    On the Owners’ s. 69 appeal, Carr J held that the classification obligation in clause 9A was “absolute” rather than merely requiring the exercise of due diligence.  There was no appeal against that ruling because the Judge did not give permission to appeal against that aspect of her decision.

    The Judge further concluded that the classification obligation in clause 9A was a condition of the contract. 

    In the Judge’s view, although the classification obligation was not a time clause strictly speaking, it had an “obvious temporal element”. 

    Furthermore, though not a condition precedent, breach of the obligation had “significant sequencing consequences” for third parties such as cargo interests, sub-charterers, ports and flags. 

    Classifying the obligation as a condition “had clear and important advantages in terms of certainty”. 

    The consequences of breach (including in relation to flag, finance and insurance) were likely to be serious.  

    As to Charterers’ reliance on the apparently wide wording in clause 9A relating to “other required certificates in force at all times”, this only applied to “certificates” (not plans) and must be taken to refer only to that which was required for class purposes. 

    The Court of Appeal

    The Court of Appeal unanimously overturned the Judge’s decision and held that the obligation to maintain the vessel in class was an innominate term and not a condition.

    Giving the leading judgment, Gross LJ emphasised that the question of the classification of the term was one of construction.  Contrary to the Owners’ submissions, it was not an evaluative exercise where a range of conclusions was open.  But even if it had been, the Court’s reluctance to interfere with the commercial judgment of arbitrators would have applied to the appeal from the award to the Commercial Court, not the appeal from the Commercial Court to this Court.

    Gross LJ reviewed the key authorities on the classification of terms and reiterated the general guidance summarised in Spar Shipping v Grand China Logistics [2016] EWCA Civ 982; [2016] 2 Lloyd’s Rep 447 (in which Simon Rainey QC and Natalie Moore also appeared for the successful Owners).

    Both “textually and contextually” the Court came to the firm conclusion that the term was not a condition. 

    1. Wording. The term was not expressed to be a condition.  This was a consideration of some significance, especially given that the BARECON 89 Form is an industry standard drafted after consideration by an industry drafting committee.
    2. Not a time clause. The term was not a time clause of the nature under consideration in Bunge v Tradax [1981] 1 WLR 711. 
    3. No inter-dependence. There was no interdependence of obligations.  There were no sequencing issues in relation to the performance of the contract.
    4. Type of breach. Although the term goes to the classification status of the vessel (the general importance of which the Court did not seek to minimise) and only one kind of breach is possible, this was outweighed by a plethora of other factors.
    5. Clause 9A as a whole. The term was found in the middle of clause 9A dealing with Charterers’ maintenance obligations. If the classification obligation was intended to be a condition, this was a surprising place to find it.  The classification and maintenance obligations are closely connected and Charterers’ obligation as to the physical maintenance of the vessel was plainly not a condition.  
    6. “other required certificates”. The term also required Charterers to keep “other required certificates in force at all time”.  This wording could not be limited to certificates required by class because it would add nothing to Charterers’ obligation to maintain class.  Therefore the Owners were driven to say either that only part of the term is a condition (not including the “other required certificates” wording or the maintenance obligation) or that Charterers’ obligation as to “other required certificates” forms part of the condition for which they contend.  The former was unattractive and improbable.  The latter was hopelessly open ended and would mean that this 15 year charterparty could be terminated by Owners if Charterers committed any breach in respect of various minor certificates.
    7. The scheme of the charterparty: insurance. An important strand of Owners’ case was that breach of the term puts at risk Owners’ insurance arrangements.  But Charterers’ obligation in clause 13B to insure the vessel against P&I risks is not a condition.  If leaving the vessel uninsured does not constitute a breach of condition, putting the vessel at risk of being uninsured is or ought not to be classified as a condition.  The same scheme applied in relation to hull or war risks cover under clause 12 of the standard BARECON 89 Form.  
    8. Consequences of breach. The consequences of breach of the term may likely result in trivial, minor or very grave consequences, thus suggesting that the term is innominate rather than a condition. On the facts of this case, the breach of the term resulted in no adverse consequences. There was nothing to suggest that repairs and maintenance were required at any earlier time, nor that dry-docking was required immediately or at any time before she was actually drydocked.  The vessel’s class certificates expired on 6 November.   The repair and maintenance work conducted in drydock thereafter, took place under the supervision of BV. 
    9. A continuing obligation. It is one thing to conclude that a statement as to the vessel’s class at the commencement of the charterparty is a condition or condition precedent (as suggested by Rix LJ in The Seaflower [2001] 1 All ER (Comm) 24).  However, there is no authority which decides that a continuing warranty as to classification status is to be categorised as a condition.  The law should not be developed in that direction.

    Comment

    The case provides a (further) clear statement of the principles that apply to the classification of contractual terms as conditions or innominate terms.  It is particularly important for shedding light on the proper interpretation of the parties’ continuing obligations during the life of a charterparty in relation to ostensibly important matters such as classification status.  Whilst the case considers the position under a bareboat charter, it has important implications for the classification of similar obligations in the time charter context: cf. clause 1 of the NYPE form.

    Simon Rainey QC and Natalie Moore (neither of whom appeared below) were instructed for the successful appellant in the Court of Appeal by Menelaus Kouzoupis, Hyun Woo Kang and Margaux Harris at Stephenson Harwood LLP.

    A copy of the judgment can be found here.

            

    Simon Rainey QC

    Simon is one of the best-known practitioners at the Commercial Bar with a broad commercial advisory and advocacy practice spanning substantial commercial contractual disputes, international trade and commodities, shipping and maritime law in all its aspects, energy and natural resources and insurance and reinsurance and has extensive experience of international arbitration. Simon regularly acts in ground-breaking shipping and commodity cases including NYK Bulkship (Atlantic) NV v Cargill International SA (The Global Santosh) [2016] UKSC 20 where Simon represented Cargill. The decision is the leading one in relation to a contracting party’s responsibility for the vicarious or delegated performance by a third party of its contractual obligations, both in the common charterparty and international sale of goods contexts and more generally. InBunge SA v Nidera SA [2015] UKSC 43 Simon represented Bunge in a landmark decision by the Supreme Court on GAFTA Default Clause and sale of goods damages after The Golden Victory. His most recent appearance in the Supreme Court was in Volcafe Ltd v Compania Sud Americana de Vapores SA [2018] UKSC 61 one of the most important shipping appeals in recent times, dealing with issues as to the burden of proof under the Hague / Hague-Visby Rules and the inherent vice defence. He has been brought in to argue the prospective Supreme Court appeal in Evergreen Marine Ltd v Nautical Challenge Ltd (The Ever Smart) [2018] EWCA Civ 2173, on the application of the ‘crossing rule’ under the Collision Regulations.

    Ranked as the “Star Individual” for shipping and commodities by Chambers UK in 2015, 2016, 2017, 2018 and again in 2019, Simon was ranked as Shipping Silk of the Year 2017 by both Chambers and Partners UK and Legal 500 UK Awards and one of the Top Ten Maritime Lawyers 2017 and again in 2018 by Lloyd’s List. He has also been cited for many years as a leading Silk in the areas of Commodities, Commercial Litigation and Dispute Resolution, International Arbitration, Energy and Natural Resources, and Insurance and Reinsurance by Chambers UK and/or Legal 500. He was shortlisted for Shipping Silk of the Year at the Chambers UK Bar Awards 2018 and for Shipping Silk of the Year and International Arbitration Silk of the Year at the Legal 500 UK Awards 2019.

    He has given expert evidence of English law to courts in several countries. He also sits as a Recorder in the Crown Court and as a Deputy High Court Judge (Commercial Court).

    “A fantastically intelligent and tactically astute barrister who is immensely erudite”; “A pleasure to work with. Fantastically intelligent and tactically astute.” ...”Personable and intellectually brilliant. He has the ability to sift through numerous documents and turn arguments into razor-sharp points that get straight to the core issues”; .”Meticulous and very thoughtful”;  “Simon is just brilliant at conveying the meaning of agreements and making complex things simple and persuasive.”... “He’s a very fluent advocate and a very good cross-examiner.”   (Chambers UK 2019)

    “Incredibly user friendly; a great advocate”; “Absolutely charming and probably the best cross-examiner I’ve ever seen”;  “A class act who’s proved himself to be a stellar performer; he’s fighting at the top of his game”; “One of the best commodities barristers – diligent and responsive, he is an excellent example of the modern QC.”; A senior QC with gravitas and an ability to provide crystal clear advice that gets to the bottom line”; ‘He is a gift to the Bar – he can always think a few steps ahead and understands both the legal and commercial perspectives.”;  ‘A first-choice QC for the very complicated cases” (Legal 500 2019)

    > view Simon's full profile

    simon.rainey@quadrantchambers.com

    Natalie Moore

    Natalie has a broad commercial practice with particular experience in international commerce and shipping. She regularly appears in the Commercial Court and in arbitration, both as sole and junior counsel.

     Natalie is ranked by Chambers UK Bar 2019 as a leading junior barrister.  She is described as: “"Very switched-on and enthusiastic. She is hard-working, easy to deal with and personable." ..."An excellent junior and a strong team player." (Chambers 2019)  Recent commentary recognises that “She has a razor sharp legal mind, is very commercially minded and is an excellent advocate’ (Legal 500 2019).

    Significant cases include:

    • Ark Shipping Company LLC v Silverburn Shipping (IOM) Ltd (The “ARCTIC”) [2019] EWCA Civ 1161 - Natalie and Simon Rainey QC (neither of whom appeared below) acted for the successful appellant in the Court of Appeal in this important ruling on the classification of the charterers’ obligation to keep a vessel in class under a bareboat charter.  Simon and Natalie successfully overturned the Judge’s decision that the term was a condition. The Court of Appeal held that the obligation was an innominate term and that the owners were not entitled to terminate for breach of this obligation in the absence of a repudiatory breach.  
    • Lukoil Asia Pacific PTE Ltd v Ocean Tankers (PTE) Ltd (THE “OCEAN NEPTUNE”) [2018] 1 Lloyd’s Rep Plus 31 - Natalie acted for the Claimant charterers on their s 69 appeal from an arbitration award on a demurrage time bar.  The arbitrators decided that a claim brought by owners for time lost waiting for charterers’ orders was not time barred.  Natalie overturned the decision, successfully arguing that the owners’ claim was a claim for demurrage and therefore time barred by reason of the owners’ failure to provide the required supporting documents within the time limit specified in the demurrage time bar clause in the charterparty.
    • Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd [2016] EWCA Civ 982 - Natalie appeared with Simon Rainey QC and Nevil Phillips in the Court of Appeal in the leading case on whether payment of hire is a condition of a time charter.

    > view Natalie's profile

    natalie.moore@quadrantchambers.com