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  • Does it matter which creditor bankrupts a debtor first?- Islandsbanki HF v Kevin Stanford [2019] EWHC 307 - Joseph EnglandView More

    Thu, 21 February, 2019

    A copy of the judgment can be found here.

    Introduction

    1. The bank successfully appealed an order refusing to give or reserve judgment after hearing full submissions in the bank’s petition and instead listing the petition for hearing at the same time as two later-in-time petitions to bankrupt the debtor.

    The Background

    2. The Appellant (“IB”) is an Icelandic bank and Mr Kevin Stanford (“the Debtor”) is a well-known businessman who founded leading fashion brands such as All Saints and (with his former wife of that name) Karen Millen.

    3. IB’s petition was finally heard for half a day on 20 December 2018 before ICC Judges Jones. After hearing extension submissions on a number of disputed legal issues concerning the validity of the execution process, rather than give or reserve judgment, ICC Judges decided to adjourn the hearing of the petition to 22 February 2019. This was the date that HMRC’s second-in-time petition was listed for with a time estimate of one day.  He did not, upon request by the parties, indicate which would be disposed of first. There were in fact indications that the Judge would prefer to hear HMRC’s petition first.

    4. The petitions had proceeded separately with IB’s to be heard first (having been adjourned a number of times). An order was then made (in IB’s absence) to jointly case manage the three petitions. This was set aside following an application under s.375 of the Insolvency Act 1986 to review that decision by the order of Chief ICC Judge Briggs. The Debtor then applied to review that decision, which was dismissed by Deputy (and former Chief) ICC Judge Baister, who made clear that IB’s petition should be heard first.

    5. A third petition was presented by Shineclear Holdings Limited on 20 September 2017 in for c.£6 million, which is disputed on a number of intricate grounds.

    6. HMRC then presented a petition against the Debtor for c.£7 million Court on 22 August 2017. HMRC’s petition is resisted essentially on the grounds of an unreasonable refusal of an offer, involving the Debtor obtaining funding offers conditional on the dismissal of IB’s and a later in time petition discussed below.

    7. IB’s petition is founded (unusually) on proving unsatisfied execution, rather than a statutory demand. It is based on an unpaid Icelandic judgment for c.£1.3 million arising from the Debtor’s undisputed failure to repay a loan made to him by IB’s predecessor. The petition is disputed on procedural grounds relating to unsatisfied execution.

    8. IB was the first creditor to present petition for bankruptcy against the Debtor in 6 April 2017.

    9. The Debtor has a long history of disputes with Icelandic institutions arising of out the global financial crisis and collapse of various Icelandic banks, which have been well-published in Iceland and in England. He is currently engaged in substantial litigation in Luxemburg (aspects of which have featured in the bankruptcy proceedings in England, including issues over the disclosure of an opinion by Lord Goldsmith QC.)

    Grounds of Appeal

    10. IB appealed this decision. It emphasised that IB’s petition should be heard first because:

    • It was in line with two previous judicial determinations which the Judge had given no reasons for departing from nor cited any change circumstance.
    • It would lead to unnecessary cost and confusion for the 22 February 2019 hearing and the Judge should have given judgment or indicated when he would, when asked at the hearing to give such an indication.
    • If IB’s petition was not heard first, it would preclude reviewable transactions (including over the sale of a car by the Debtor worth c.£1million to his family) that would only be within the “look-back date” of IB’s first-in-time petition. Pursuant to s.284 of the Insolvency Act 1986, where a person is made bankrupt, any disposition of property made by that person in the period starting with the date of presentation of the petition is prima facie void.  Pursuant to ss. 339 to 341 of the Insolvency Act 1986, the “relevant date” for a trustee in bankruptcy to set aside transactions at an undervalue or preferences is calculated by reference to the date of the presentation of the bankruptcy petition on which the individual is made bankrupt. 
    • It would leave the costs of IB’s long-standing petition (whether for IB or the Debtor) unresolved and potentially unrecoverable.  
    Decision

    11. Having initially been refused permission on paper by Mr Justice Henry Carr, IB renewed its application for permission at an oral hearing. At that hearing, Mr Justice Henry Carr granted permission to appeal and the appeal itself. His reasoning [51-57] was that:

    (a)   As a matter of principle, the Court should dispose of the IB petition first.

    (b)   He accepted the submissions advanced that this was not a normal case management decision and that, if was any question of hearing the second or third-in-time petition before IB’s first-in-time petition, a reasoned judgment in the light of two previous orders of ICC Judges would have been needed.

    (c)   He was influenced by the fact that the Debtor and third-in-time petitioner consented to the appeal.

    12.  As a postscript [58], Mr Justice Carr took the opportunity to comment on the permission to appeal process by stating that: “It might be a useful practice in appropriate cases for judges considering such appeals on paper to allow respondents to be served or have access to the relevant file, and to make brief observations on permission to appeal. In this case it might well have enabled this appeal to be granted without a hearing.”

    Commentary

    13. The appeal may be of interest for a number of reasons.

    14. First, it deals with the highly unusual situation of having multiple creditors all with separate petitions on foot against the same debtor (rather than a lead petition with supporting creditors), on which there is little to no procedural guidance or precedent.  The former Insolvency Rules 1986 had a provision for consolidation of petitions, but this does not appear in the current Rules. It is not an abuse of process to bring a subsequent petition as the Insolvency Practice Direction 2018, at paragraph 12.31 provide wording for verifying such a petition to state: “the petitioner is issuing this petition at risk as to costs”, the Practice Direction says nothing further on multiple petitions.

    15. Second, it is a rare example of a successful appeal of a case management decision

    16. Third, it deals with the unusual situation where all parties consented to the appeal.

    17. Fourth, it deals with the unusual situation where a judge refused to give or reserve judgment after hearing the case.

    18. Fifth, it underlines the importance of why a first-in-time petition should be heard first with reference to reviewable transactions.

    19. Finally, the end of the judgment offers guidance on the permission to appeal process on paper. 

    Joseph England (instructed by James Robbins of Harrison Drury) appeared for the Appellant.

    Joseph England 

    Joe practises in a wide range of commercial disputes.

    Joe began his legal career qualifying as a solicitor at Allen & Overy LLP before transferring to the Bar. Joe spent the first year of his practice as the Judicial Assistant to Lord Sumption and Lord Wilson at the Supreme Court. He soon returned as counsel to the Supreme Court in Bank of Cyprus UK Limited v Menelaou [2015] UKSC 66.

    Since starting practice in August 2013, Joe has been engaged, on a near full-time basis, in a major ICC oil and gas arbitration in London and Geneva, and subsequent related litigations, working and appearing with legal teams in Poland, The Netherlands, Ireland, Curaçao, Nigeria, Mauritius, Scotland, the US, London and Switzerland.

    To view Joseph's full profile, please click here. 

    joseph.england@quadrantchambers.com

  • Quadrant Chambers in the Supreme Court: Permission to Appeal Granted in Shagang Shipping Company Limited v HNA Group Company LimitedView More

    Wed, 13 February, 2019

    On 6 February 2019 the Supreme Court (Lord Wilson, Lord Hodge & Lord Lloyd-Jones) granted permission to appeal to Shagang.  Shagang are represented by Quadrant Chambers’ Ruth Hosking & Caroline Pounds led by Dinah Rose QC of Blackstone Chambers and instructed by HFW Shanghai (Julian Davies, Trevor Fox & Kate Fisher).  The National Council for Civil Liberties intervened by making submissions to the Supreme Court on the application for permission to appeal (represented by Ben Jaffey QC of Blackstone Chambers).

    The Supreme Court gave permission on the following grounds:

    (1)    Whether the Court of Appeal erred in law in finding that the real possibility that a hearsay statement has been extracted under torture is an irrelevant consideration which must be disregarded by a Judge assessing its weight pursuant to s.4 Civil Evidence Act 1995.

    (2)    Whether the Court of Appeal erred in law in finding that the Judge’s finding that he could not rule out torture amounted in law to a finding that there was no torture.

    (3)    Whether the Court of Appeal erred in law in finding that a payment made to an individual who was not an employee or agent of Grand china Shipping should be irrebuttably presumed to have induced Grand China Shipping to enter into the charterparty.

    A copy of the Court of Appeal judgment which is the subject of appeal is here - Shagang Shipping v HNA Group [2018] EWCA Civ 1732.  

     

    Ruth Hosking

    Ruth’s practice encompasses the broad range of general commercial litigation and arbitration.  Her particular areas of specialism include shipping, civil fraud, private international law and commodities.  She undertakes drafting and advisory work in all areas of her practice and regularly appears in court and in arbitration, both as sole counsel and as a junior.  Ruth also accepts appointments as an arbitrator (both as sole and as part of a panel).

    Ruth has appeared in the House of Lords, Court of Appeal, High Court and has represented clients in a variety of international and trade arbitrations (including ICC, LCIA, LMAA, GAFTA and FOSFA).  She has been involved in a number of high profile cases, including "The Achilleas", a leading case on the contractual principles of remoteness of damage and "The Atlantik Confidence", the first case in which an English Court has determined that a person was barred from relying on the limits provided by the Limitation Convention. 

    > View Ruth's full profile here

    Caroline Pounds 

    Caroline was awarded ‘Shipping Junior of the Year' at the Chambers UK Bar Awards 2015 and is shortlisted for Shipping Junior of the Year for the Legal 500 UK Awards 2019. She was recognised as one of Legal Week's 'Stars at the Bar' in 2013 ("Her attention to detail and analysis are first class and advocacy skills are excellent") and is further praised by Chambers UK for being "Hard-working, thorough and user-friendly."; "Bright." and "tough as nails, very bright and very succinct"..

    Caroline’s practice encompasses the broad range of general commercial litigation and arbitration.  Her particular areas of specialism include shipping, carriage of goods, shipbuilding, energy and commodities.  She undertakes drafting and advisory work in all areas of her practice and regularly appears in the Commercial Court and in arbitration, both as sole counsel and as junior. She is a sought after junior and enjoys a significant amount of led work.

    > View Caroline's full profile here

  • Is Mediation Flying High in UK Aviation? - Jonathan ChambersView More

    Wed, 06 February, 2019

    Mediation of disputes in aviation litigation has recently come to prominence as a result of the withdrawal of Ryanair from mediation arrangements set out to deal with claims by passengers for compensation under EU Regulation 261/2004.

    As a consequence it is likely that many more claims against Ryanair will be brought in the English and other EU Courts given the widespread delays and cancellations of flights experienced by that airline in July to September 2018 as a consequence of industrial action.

    The EU adopted a mediation scheme for consumer claims generally under the EU Alternative Dispute Resolution (ADR) Directive (Directive 2013/11/EU). In the UK this has been enacted by the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 and The Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015 came into force respectively on 9 July 2015 and 1 October 2015.

    The UK Regulations do not make participation in ADR schemes mandatory for “traders” such as airlines but they do require almost all businesses which sell directly to consumers to point the consumer to a certified ADR scheme – where they cannot resolve a dispute in-house – and declare whether or not they intend to use that scheme.

    The Regulations also require that ADR providers wishing to gain certification must meet certain standards with regard to independence, impartiality, and quality of expertise with a competent authority.

    The UK Regulations:

    • place an information requirement on businesses selling to consumers
    • establish competent authorities to certify ADR schemes
    • set the standards that ADR scheme applicants must meet in order to achieve certification

    When implementing the ADR Directive the UK government noted hat there was an unmet need regarding complaints from consumers that stemmed from aviation contracts. The CAA was appointed by the UK government to be the UK's only competent authority to approve ADR providers as fit to offer ADR services to consumers of aviation services. Previously, the CAA itself mediated between customer and airline in disputes concerning flight delays, cancellations, missing or damaged luggage, and compensation. Now the CAA will now only get involved with those airlines not registered with an ADR scheme.

    In most cases, once an airline's own complaints process has been exhausted, the consumer will be able to refer their case to an ADR body. The ADR body will then assess the case in an efficient and timely manner and provide a solution, which, if acceptable to the consumer, the airline must comply with. This means that if the ADR scheme provider says the airline should pay compensation, the airline must do so.

    If consumers do not accept the ADR provider's solution the consumer can reject it and may pursue their legal rights through the courts (subject to the applicable time limits for bringing a court claim).

    ADR bodies have to complete their handling of a case within 90 days and ADR bodies to charge a small fee for handling a complaint (the current maximum is £25). However this must be refunded to the passenger if the ADR body upholds the passenger's complaint in any way - even if this consists solely of an apology from the airline, if that is what the consumer was seeking. Consumers with complaints that relate to disability issues are not charged a fee

    All CAA administered ADR schemes must handle complaints relating to denied boarding, delay, or cancellation; destruction, damage, loss, or delayed transportation of baggage; destruction, damage, or loss of items worn or carried by the passenger; problems faced by disabled passengers or passengers with reduced mobility when using air transport services; and any more general disputes arising where the consumer alleges that the business is not trading fairly.

    However at present the mediation scheme is limited to 2 certified providers Consumer Dispute Resolution Ltd (which trades as ‘Aviation ADR’) and CEDR Services Limited (which trades as CEDR). However these do provide a very competent service and have dealt with thousands of complaints already. Aviation ADR which provides publicly available data dealt with 10,580 complaints in the year ended March 2018 of which the vast majority (9,097) dealt with complaints in respect of EU Regulation 261/2004 on compensation for denied boarding, cancellation and long delays. Of these only in 10 cases did a member airline seek to escalate a complaint or seek not to comply with a determination in favour of a passenger.

    It appears that mediation is working well in UK aviation and saving costs for both airlines and passengers and avoiding the need for expensive and delayed trips to Court. It is however quite surprising that more mediation organisations have not become certified and no doubt this will be the case as the scheme beds in.

    Jonathan Chambers

    Jonathan has a broad practice covering all aspects of commercial and transport law.  

    He is consistently ranked by Chambers UK and Legal 500 as a Leading Senior Junior, with Chambers UK (2018) commenting “A tenacious advocate with an admired intellectual capacity. His redoubtable practice focuses on complex cases involving personal injury and fatality”  and “He is easy to work with and responsive. He quickly identifies the issues”  and Chambers UK (2016) commenting that he is “Noted by peers for his meticulous preparation, strong advocacy skills and easy manner with clients” and Legal 500 (2016) describing him as “Very well prepared”

    Jonathan has a strong international practice and he is qualified to practise in England & Wales, Northern Ireland (practising) and Australia (currently non-practising). He has also advised on disputes involving Australia, Canada, the Channel Islands, Hong Kong, Northern Ireland, Scotland, Singapore, and the United States of America.

    Jonathan acts on behalf of shipyards, ship-owners, rig owners, crewing agencies and shipping unions and the Royal Yachting Association. He is involved in a large volume of wet and dry shipping cases including cargo claims, pilotage, collisions and groundings. International ship-building, rig-construction and repair cases are also a strong feature of his practice.

    He frequently acts in inquests involving aviation and maritime incidents and the civil claims which follow.

    click to view Jonathan's full profile

    jonathan.chambers@quadrantchambers.com

  • Arbitration Blog: Arbitrators and evidence gathering: a note on Fleetwood Wanderers Limited v AFC Fylde Limited - Paul TomsView More

    Mon, 28 January, 2019

    This article was first published by the Practicial Law Arbitration Blog, here.

    It is a not uncommon feature of arbitration that an arbitral tribunal will from time to time take “judicial notice” of notorious facts without requiring the parties to adduce specific evidence to prove those facts. Furthermore, arbitrators are almost always appointed because of their particular expertise or experience of particular types of disputes.

    Further, many users of arbitration would regard it as a good thing to have a pro-active tribunal, using its initiative positively to manage the reference and setting down procedures and taking steps to assist the parties with the resolution of their dispute.

    The case of Fleetwood Wanderers Limited v AFC Fylde Limited is a vivid illustration of a well-meaning and pro-active arbitrator going well beyond what is permissible. In particular, it is a striking example of an arbitrator straying beyond the legitimate functions of evaluating evidence adduced by the parties or making use of his own expertise in assessing the parties’ evidence or, indeed, having regard to matters sufficiently notorious that they attract “judicial notice”.

    The case concerned a challenge under section 68(2)(a) of the English Arbitration Act 1996 (AA 1996) to the award of a sole arbitrator. The challenge was on the basis of his failure to comply with his obligations under section 33 of the AA 1996 to act fairly and impartially between the parties, and to give each party a reasonable opportunity of putting his case and dealing with that of his opponent.

    The underlying dispute arose from the world of lower league football.

    A professional football club (Fleetwood) signed a player who was already contracted to a non-league club (AFC Fylde). AFC Fylde argued that by signing the contract with Fleetwood, the player had repudiated his contract of employment and, further, that Fleetwood had procured the breach of contract.

    AFC Fylde therefore brought a claim against Fleetwood. The claim was put on two bases. Firstly, a common law claim for damages for inducing a breach of contract and, secondly, a claim for compensation under regulations promulgated by FIFA, the governing body of the worldwide game, which contained a principle for the payment of compensation where a relevant contract was terminated without just cause (the article 17 principle).

    The key question which arose in respect of the claim for compensation under the FIFA regulations was whether they were applicable in England under the rules of the Football Association Limited (FA), which was the governing body of football in England.

    The arbitrator rejected the common law claim on causation grounds.

    However, he accepted the alternative claim under the FIFA regulations on the basis that the FA rules had operated to incorporate the article 17 principle without derogation. Yet the circumstances in which that claim was accepted were unusual and led to the successful challenge to the award.

    The sole arbitrator took it upon himself, without advising the parties of his intention to do so (or even notifying them after the event), to seek to find out from the FA whether it had done anything to apply the FIFA regulations. He did so by emailing the FA. Fleetwood only became aware of these communications when they were brought to its attention by the FA’s solicitors after the arbitration claim form had been issued.

    In addition, the arbitrator carried out his own research without advising the parties including looking at the Irish FA’s website.

    The challenge under section 68(2)(a) required Fleetwood to demonstrate both that the conduct of the arbitrator was in breach of his duties under section 33 of the AA 1996 and, as such, was a serious irregularity and, furthermore, that the breach of those duties caused Fleetwood “substantial injustice”.

    As to the first question, HHJ Halliwell, sitting as a High Court judge, held at paragraph 39 that “by making the relevant enquiries and eliciting information without at least sharing the information with the parties and giving them an opportunity to make representations”, the arbitrator had breached his duties under section 33 of the AA 1996.

    Whilst the conclusion that there was a breach by the arbitrator of his duties was hardly surprising, it is questionable whether (as the judge suggested) there would have been no breach of section 33 of the AA 1996 had the arbitrator made the enquiries that he did but then offered the parties the opportunity to make representations about the result of those enquiries.

    Firstly, the arbitrator had essentially adopted an inquisitorial approach to establishing the relevant facts and evidence. This approach is not routinely adopted in arbitrations seated in England. Whilst it is possible for a tribunal to adopt such an approach by reason of section 34(2)(g) of the AA 1996, which entitles a tribunal to decide “whether and to what extent the tribunal should itself take the initiative in ascertaining the facts and the law”, it is clear from the judgment that the arbitrator had not adopted those procedures.

    Secondly, there are a number of authorities which consider whether and, if so, when, a tribunal may be entitled to rely on its own expert knowledge and experience in deciding a case. In that line of authorities, a distinction has been drawn between an arbitrator using his or her existing knowledge and expertise to evaluate the evidence adduced by the parties (which may be permissible especially where the contract requires an arbitrator from a particular trade or with particular experience to be appointed) and an arbitrator supplying new evidence by using his or her own knowledge (which is not permissible). For example, in the Court of Appeal in Checkpoint Ltd v Strathclyde Pension Fund, Ward LJ offered this is as a possible test of distinguishing the permitted from the prohibited:

    “… was the arbitrator supplying evidence… or was he adjudicating upon it? Was he evaluating the evidence before him or introducing new and different evidence?”

    Applying that test in the slightly different context of the Fleetwood case, it is self-evident that what the arbitrator was doing was supplying new and different evidence from that adduced by the parties; he was not drawing on his own expertise or experience to evaluate the evidence of the parties.

    Having concluded that the arbitrator’s conduct was in breach of section 33, HHJ Halliwell proceeded to determine whether the irregularity had caused Fleetwood substantial injustice by reference to the test set out in Maass v Musion Events Limited. The judge at paragraph 41 concluded that the test was satisfied.

    Finally, the judge considered what relief was appropriate. Specifically, he considered whether the matter should be remitted to the arbitrator to re-consider his award in the light of further submissions (and possibly evidence) from the parties, in respect of the arbitrator’s enquiries of the FA, or whether the award should be set aside or declared to be of no effect. Remission was ordered for the reasons set out at paragraph 47. The judge appears to have been heavily influenced by the fact that there was no suggestion of bias and the arbitrator’s conduct was “driven by his anxiety to achieve the correct outcome, as he perceived it”.

    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. His experience also extends to oil, petroleum products, biofuel and coal. More recently, he has been involved in a number of sugar disputes, including under RSA Contract Rules and ICE Rules. He also has experience of related applications to the Commercial Court under ss. 68 and 69 of the Arbitration Act 1996. He also has significant experience of procedural issues commonly arising in commercial litigation, including seeking and resisting injunctive relief (e.g. freezing, anti-suit and asset disclosure orders) and jurisdictional challenges (both in Court and arbitration).

    He has been recommended for many years in the Legal Directories, namely Who’s Who Legal: UK Bar, the Legal 500 and Chambers UK. His significant experience of working in the Asian Pacific market is reflected by his recommendation for both commercial and shipping work by the Legal 500 in its Asia Pacific rankings.

    View Paul Toms' full profile
    paul.toms@quadrantchambers.com

  • ‘Good Arguable Case and Jurisdiction’ – Clarifying the law; not a gloss, explication or re-formulation but the test!View More

    Thu, 17 January, 2019

    The Court of Appeal has handed down judgment in Kaefer Aislamientos SA v. AMS Drilling Mexico SA & Ors [2019] EWCA Civ 10. The decision is essential reading for anyone seeking to establish or challenge jurisdiction in the High Court. It reconciles the various strands of authority on what is the test of ‘good arguable case’ and provides guidance on the approach to be taken in any dispute over jurisdiction particularly disputes where the evidence before the court is incomplete.

    Leading counsel from Quadrant Chambers acted for all parties. 

    The dispute over jurisdiction arose in circumstances where the appellant repairer sought to recover sums alleged to be due under a contract for works to a rig. The appellant issued proceedings against four defendants including the respondents, the Singaporean owner of the rig and its holding company. In order to establish that the respondents were party to the contract and to the jurisdiction agreement contained in it, the appellant had to show that the respondents were undisclosed principals to the contract. It was common ground that there was no direct evidence on this issue. The appellant alleged that the evidence was such that the court could infer that the respondents were party to the contract.

    Both at first instance and on appeal, there was a dispute as to the elements of the test to be met by the appellant if it was to establish that the High Court had jurisdiction under Art. 25 of the Recast Brussels Regulation. That dispute focussed on the substantive meaning of the phrases ‘good arguable case’ and ‘much the better argument’ and on whether the test for jurisdiction has two discrete parts or one part with composite ingredients.

    At first instance, the judge treated the test as having two discrete parts, namely a claimant has to establish that it has a good arguable case and that it has much the better argument. On the evidence, he held that the appellant could establish a good arguable case against the rig owner but failed to show that it had the better argument. He held the appellant failed in both respects in its attempt to establish jurisdiction against the holding company. In assessing the evidence, the judge rejected an argument from the respondents that the terms of the contract were such as to exclude the possibility of undisclosed principals or were at least strongly indicative that the respondents were not party to the contract.

    On appeal, the appellant sought to argue that the question of who had the ‘better argument’ was an unjustified gloss on the good arguable case test, which should not in any event be applied where the evidence was incomplete or contradictory. The appellant also argued that the judge had erred in his evaluation of the evidence. The respondents challenged the judge’s approach to the significance of the contract terms and in particular the entire agreement clause in those terms.

    The Court of Appeal dismissed the appeal. In doing so, the court considered and applied the judgments of the Supreme Court in Brownlie (2017) and Goldman Sachs (2018).

    The Court emphasised that disputes over jurisdiction should be determined with dispatch and should not become a distraction from the main event. It recognised that courts have nevertheless struggled to find a test, which encapsulates in readily workable language what the test is and how it should be applied.

    Having considered the authorities, the Court held that the test for jurisdiction is now the three-limbed test described by Lord Sumption in Goldman Sachs. A claimant asserting jurisdiction must establish:

    1. A plausible evidential basis for the application of a relevant jurisdictional gateway;
    2. If there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so;
    3. If the nature of the issue and the limitations of the material available at the interlocutory stage is such that no reliable assessment can be made, there will be a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it.

    This three-limbed test is a confirmation of the relative test in Canada Trust requiring a claimant to show that it has the better argument based on plausible evidence. The burden of proof remains on a claimant but the test is context specific and flexible. A court must be astute not to express any view on the ultimate merits of the case. The word ‘much’ has now been laid to rest.

    In relation to limb (ii) of the test, the Court has expressly acknowledged that it is an instruction to courts to seek to overcome evidential difficulties and arrive at a conclusion if they reliably can. A court is to use judicial common sense and pragmatism. Attempts by claimants to seek extensive disclosure and then rely on a defendant’s refusal to give such disclosure as evidence of an uncooperative attitude were deprecated. Limb (iii) of the test addresses the situation where it is not possible for a court to assess the relative merits of each party’s case at an early interlocutory stage. A claimant still has to establish a sufficiently plausible evidential basis for the application of a jurisdictional gateway.

    In considering the test, the Court also made a number of other findings on matters which commonly arise in jurisdictional disputes.

    In relation to Art. 25 of the Recast Brussels Regulation, the test is the same regardless of the domicile of the parties and requires a claimant to demonstrate consensus over a jurisdiction agreement clearly and precisely.

    Former case law on service abroad being an exercise of an exorbitant jurisdiction no longer applies to raise the bar for establishing jurisdiction.

    An appellate court should be reticent in interfering with a judge’s evaluation of the evidence particularly where a judge has addressed complex facts in close detail.

    The Court of Appeal differed from the judge on the weight to be given to the contract’s express terms. Where the contract terms identified the parties to the contract and contained an entire agreement clause, those are relevant factors to be taken into account when assessing jurisdiction and were strongly indicative that the alleged agents did not intend to act on behalf of undisclosed principals when entering the contract.

    The Court dismissed the appeal with costs.

    A copy of the judgment is available here

     

    Nigel Cooper QC, instructed by Michelle Yong and Mary Dodwell of Stephenson Harwood, acted for the Respondents.

    Michael Nolan QC, instructed by David Leckie, Tom Roberts and Emily Newey of Clyde & Co, acted for the Appellant.

     

    Nigel Cooper QC

    Nigel's commercial practice predominantly covers the fields of shipping, energy and insurance law. He appears before the Commercial and Admiralty Courts, in arbitration (both domestic and international) and before the appellate courts. Nigel accepts appointments as an arbitrator and has acted as a mediator and as a party's representative in mediations. He has experience of public inquiries having appeared for the government in the three most recent shipping formal investigations.

    Nigel's shipping & commodities work covers most aspects of international trade and the carriage of goods (including international sales disputes and all forms of bill of lading and charterparty disputes); shipbroking and management including related fraud and professional negligence claims; shipbuilding (including superyachts) and off-shore construction; ship sale and purchase; limitation and collision actions, pollution and, occasionally, Merchant Shipping Act offences. In addition to his commercial shipping practice, Nigel has a specialist interest in disputes in the yachting and marine leisure market. In the energy sector, Nigel's work covers both upstream and downstream aspects of the industry. He has advised on disputes relating to drilling and exploration, to production and to the sale and purchase of energy products as well as on related issues such as the enforcement of related guarantees and the insurance of drilling units. Nigel's insurance & reinsurance practice extends to policy disputes in both the non-marine and marine sectors.

    In the wider commercial arena, Nigel has considerable experience of handling cases that are factually and technically complex with a corresponding level of documents. He is known for being approachable, and believes in working as a team with those instructing him.

    To view Nigel's full profile, please click here.

    nigel.cooper@quadrantchambers.com

    Michael Nolan QC

    Michael Nolan’s practice covers all aspects of the law relating to ships, the international carriage and sale of goods, insurance and reinsurance, harbour law, commercial contracts, private international law and professional negligence. He appears regularly in arbitration, is a supporting member of the LMAA , a member of the SCMA and accepts appointments as an arbitrator. He is a member of COMBAR and was on the executive committee from 1998 to 2001. He has strong links with Singapore and travels there regularly.

    He is recommended for Shipping and Commodities in the current editions of Chambers UK, for Shipping and International arbitration in Legal 500 UK and for Shipping (International Arbitration) in Legal 500 Asia Pacific.

    To view Michael's full profile, please click here.

    michael.nolan@quadrantchambers.com

  • Quadrant Chambers features twice in The Lawyer Top 20 cases of 2019View More

    Tue, 15 January, 2019

    We are delighted to see Quadrant Chambers feature in two cases from the latest 'Top 20 Cases of 2019' in The Lawyer

    Paul Downes QC and Emily Saunderson feature in N v RBS and NCA which is quoted as being ‘one of the year’s first major banking trials’. Paul and Emily are instructed by Fiona Hinds and Dominic Offord of Howard Kennedy

    Nichola Warrender is part of the team on Suez Fortune Investments Ltd and Piraeus Bank SA v Talbot Underwriting Ltd (The Brilliante Virtuoso)  - a 12 week war risk insurance trial. Nichola is instructed by Chris Zavos at Norton Rose Fulbright. 

    The full feature can be read here.

    Paul Downes QC

    Paul specialises in commercial law, and has specific expertise in banking and finance-related matters.

    After taking Silk in 2010, his reputation as a tough, commercially-minded barrister has continued to grow.

    Before coming to the Bar, Paul worked for Barclays Bank and was an assistant examiner for the Chartered Institute of Bankers. A direct understanding of the commercial and financial worlds means clients benefit from a practical and user-friendly approach. Paul has also acted as an expert witness overseas in relation to banking regulation in the UK, and is lead contributor to Butterworths LexisNexis Encyclopedia on Forms and Precedents.

    Paul also handles general commercial litigation, international trade, media and entertainment, and professional negligence. He acts as an arbitrator in LMAA shipping disputes, commercial disputes and insurance disputes.

    He is recommended as a leading silk for commercial dispute resolution in Chambers & Partners UK Bar 2019 and for Banking & Finance, Commercial Litigation, Financial Services and Fraud: Civil in Legal 500 2019. 

    To view full website profile, please click here.

    Emily Saunderson

    Emily is a general commercial practitioner specialising in commercial fraud, and banking and finance. She has broad experience in obtaining urgent injunctive relief including freezing orders, asset preservation orders and delivery up orders. Emily’s banking and finance practice has a particular emphasis on financial derivatives instruments, and she is familiar with standard form contracts including the ISDA Master Agreement.

    Emily is ranked in the latest edition of Chambers & Partners in commercial dispute resolution and she is recommended as a leading junior in banking and finance and financial services by the Legal 500, where she is described as “technically outstanding, with a very sound grasp of copious quantities of fine detail.”

    She has experience in cases involving contractual interpretation and rectification; dishonest assistance; fraud; bribery; fraudulent trading; rights of set-off; contractual estoppel; rights under contracts of indemnity; and guarantees.

    Before embarking on a career in law, Emily was a financial journalist covering the global derivatives markets. She brings a strong understanding and useful insider’s perspective on financial markets to her legal practice.

    To view full website profile, please click here.

    Nichola Warrender

    Nichola is an experienced junior who enjoys a broad commercial litigation and arbitration practice with particular emphasis on shipping, carriage of goods, commodities, shipbuilding, energy and construction and related insurance and finance disputes.

    Nichola undertakes drafting and advisory work in all of her practice areas.  She regularly appears as an advocate in the High Court and in arbitration, as sole counsel and as a junior.  She has a good balance between led and non-led work and is frequently recommended as a junior by those with whom she has previously worked.

    Nichola is a meticulous and persuasive advocate with a wide range of experience within her fields of specialism and in more general commercial disputes.  Many of her cases involve issues of jurisdiction, private international law or require careful analysis of complex factual, expert and technical or legal issues.  She has experience in various forms of pre-emptive remedies such as freezing orders, anti-suit injunctive and other pre-action relief and has obtained or resisted most forms of pre-trial applications.

    Nichola adopts a modern, efficient and user-friendly approach to her work. She is a team player who works well with others to efficiently manage and prepare a case for trial/arbitration.  Nichola believes in combining a good command of the issues and commercial understanding of her clients’ needs with sound intellectual legal analysis and practical advice.  She aims to deliver thorough, well-prepared and effective presentation of the case both on paper and in person to achieve the best results for her clients. 

    Nichola is happy to be instructed on urgent matters and at short notice when available. 

    To view full website profile, please click here.

  • Quadrant Chambers Shortlisted for Chambers of the Year at the Lexis Nexis Awards 2019View More

    Tue, 15 January, 2019

    Quadrant Chambers is delighted to have been shortlisted for Chambers of the Year at the Lexis Nexis 2019 Awards. 

    The awards take place on 13 March. 

  • Chris Smith to be appointed Queen’s Counsel in 2019 View More

    Thu, 10 January, 2019

    We are delighted to announce that Chris Smith will be appointed as Queen's Counsel in the 2019 ceremony taking place on 11 March. Our warmest congratulations to Chris!

    Chris has a broad practice encompassing all areas of commercial law, with a particular focus on dry shipping, commodities, energy, and insurance disputes. He has appeared extensively in the Commercial Court, representing clients at all stages of proceedings, from urgent pre-action interlocutory applications all the way through to trial. Chris also appears regularly in both domestic and international arbitrations, and has undertaken cases before tribunals in London, Zurich and Hong Kong.

    ..."Excellent. User-friendly and bright."... "He impresses both in his written advice and in his advocacy. He prepares well and gives great service."... (Chambers UK, 2019)

    ‘He is outstanding in his legal analysis and presentation of cases before tribunals.’ (The Legal 500 2019)

    "...He has a razor-sharp mind and is very thorough. He comes up with brilliant arguments and gets great results."... "A good strategist..." (Chambers UK, 2018)

    > view Chris's full profile

    chris.smith@quadrantchambers.com

  • The Legal 500 UK Awards 2019 - Two Awards for Quadrant ChambersView More

    Thu, 03 January, 2019

    We are delighted to announce that Quadrant Chambers has won two awards at the Legal 500 UK Awards 2019. We have been awarded Shipping Set of the Year and Simon Croall QC has been awarded Shipping Silk of the Year.

    The awards will be presented at a cocktail reception held at The Great Hall, Guildhall on Wrednesday 6th February 2019. A full list of the award winners can be found here.

     

    Simon Croall QC

    Simon Croall is an established commercial silk who has appeared in every court (including two recent appearances in the Supreme Court). He is a sought after trial advocate as well as being respected in the appellate courts. In recent years much of his work has been in the context of International Arbitrations.

    Recent reported highlights include Fulton Shipping v Globalia (The New Flamenco), a leading case on damages and mitigation, in the Supreme Court [2017] 1 WLR 2581, Court of Appeal [2016] 1WLR 2450 and below [2014] 2 Lloyd’s Rep. 230; Mitsui v Beteiligungsgesellschaft (“The Longchamp”) in the Supreme Court [2018] 1 Lloyd’s Rep. 1, addressing novel issues under the York Antwerp Rules in the context of piracy, and Court of Appeal [2016] 2 Lloyd’s Rep. 375; Aldcroft v International Cotton Association [2018] QB 725 (on restraint of trade in the context of arbitration); Jiangsu Shagang Group v Loki Owning (MV Pounda) [2018] EWHC 330 (agency issues in the context of long term contracts) and Essar Shipping v Bank of China [2016] 1 Lloyd’s Rep. 427 on factors relevant to the grant of anti-suit injunctions. In earlier highlights he led the team for Owners in landmark case on remoteness in contract damages Transfield Shipping v Mercator Shipping (“The Achilleas”) [2009] 1 AC 61. 

    Simon is particularly well known for his experience in the following fields: Information Technology (see for example De Beers v Atos Origin, a claim arising out of a large scale IT project), Commercial litigation, International Arbitration, Energy, Shipping & Commodities and Insurance. He also has a global practice with a depth of experience working with Chinese and South East Asian clients in particular.

    > view Simon Croall's profile

    simon.croall@quadrantchambers.com 

  • Dealing with hopeless Section 68 applications: all working well … or time to get tougher?- Simon Rainey QCView More

    Mon, 17 December, 2018

    Two recent decisions of the Commercial Court shed different lights on the Commercial Court’s policy of weeding out hopeless section 68 applications at an early stage and merit close attention: see the decisions in Asset Management Corporation of Nigeria v Qatar National Bank [2018] EWHC 2218 (Comm) decided in July but published only recently, and Midnight Marine Ltd v Thomas Miller Speciality Underwriting Agency Ltd [2018] EWHC 3431 (Comm), handed down on 12th December 2018.

    The Problem: the Abuse of Section 68

    Under section 68 of the Arbitration Act 1996, a right to challenge an award lies in a range of narrowly defined situations which have been summarised as dealing with the case where something has gone “badly wrong” with the due process in relation to the conduct of the arbitration or the rendering of the award. The applicant must establish a serious irregularity of a type falling within one or more of the sub-paragraphs under section 68(1) and, in addition, that that irregularity has caused substantial injustice. The Court’s jurisdiction is to be exercised only “in extreme cases”.

    Given, however, the restricted right to challenge an award on its merits, which is confined to errors on questions of law which can get through the eye of the section 69 needle, parties frequently resort to dressing up a case, which is in reality a challenge to the substance of what the tribunal has decided, as a section 68 challenge for serious irregularity in the conduct of the arbitration. A common guise adopted for this is the argument mounted under s 68(2)(d) of the 1996 Arbitration Act, that the tribunal has failed to deal with all the issues that were put to it, which has resulted in the party suffering substantial injustice. (See e.g. Orascom TMT Investments v. Veon Ltd [2018] EWHC 985 (Comm) and Reliance Industries Limited v. The Union of India [2018] EWHC 822 (Comm).)

    The Solution: Paragraph O8.5 of the Commercial Court Guide

    The Commercial Court has previously referred to the large number of section 68 applications made and to the fact that the great majority of these are obviously unsustainable. The Court has adopted a summary procedure for hopeless applications. Paragraph O8.5 of the Commercial Court Guide provides that “If the nature of the challenge itself or the evidence filed in support of it leads the Court to consider that the claim has no real prospect of success, the Court may exercise its powers under rule 3.3(4) and/or rule 23.8(c) to dismiss the application without a hearing.” In practice, the application is responded to briefly by the respondent, by “a respondent’s notice to that effect together with a skeleton argument (not exceeding 15 pages) and any evidence relied upon”), the applicant answers this in writing and the Court may dismiss the application on the papers.

    As the first of the recent decisions has noted, “There is no reason why the court should not exercise its powers for summary dismissal on paper where the appropriate test is met and over the years the court has tended to do so more and more in the light of the raft of unmeritorious applications that are made under section 68” (: see Asset Management Corporation of Nigeria v Qatar National Bank [2018] EWHC 2218 (Comm), per Sir Jeremy Cooke at [38]).

    So far, so good.

    But where the Court makes an order dismissing the application without a hearing, the applicant has the right under Paragraph O8.5 to apply to the Court to set aside the order and to seek directions for on oral hearing of its section 68 application.

    It is here that problems can potentially arise. It is difficult to gauge how often this right is sought to be exercised. In Asset Management, Sir Jeremy Cooke (with many years of first-hand experience in the Commercial Court) noted that “For the most part, where such an application was summarily dismissed, my experience was that they were infrequently pursued” [38].

    The Remaining Problem … a Full Re-run at an Oral Hearing?

    But exercised that right certainly is, at least by certain applicants. The problem is then whether, having had the application thrown out on paper as unarguable, the applicant is nevertheless still able to have what virtually amounts to a full section 68 hearing, almost invariably with the same result of testy dismissal, but only after all the costs and inconvenience of a full hearing.

    The two recent decisions illustrate considerable differences of approach by Commercial Court judges to this problem and suggest that practitioners can certainly expect some further changes or clarifications of Paragraph O8.5 when the Commercial Court Guide undergoes its next revision.

    (1) In Asset Management v Qatar National Bank, a hopeless section 68 application based on section 68(1)(d) and “issues” allegedly not dealt with but which plainly had been addressed by the tribunal, Carr J. dismissed the application on paper. Asset Management renewed its application and sought an oral hearing. It failed, the application being described as “wholly without merit”. Looking at the judgment, the application appears to have been almost fully argued out as if a ordinary section 68 application.

    Sir Jeremy Cooke emphasised that there was, in his view, a real and important role for the oral hearing.

    While he recognised that the Court could refuse an oral hearing, notwithstanding O8.5, this would only occur in exceptional cases, i.e. “unless the underlying application was seen as something akin to vexatious”. Otherwise, the “usual” course was to proceed to an oral hearing. The Judge did not define the nature of that hearing but from what Sir Jeremy states, it is clear that he was envisaging a fully contested hearing and that he considered that this gave the Court an important cross-check. At [41], he extolled the benefits and essential justice of this type of oral hearing as he saw them:

    “ […] my understanding of the general practice is that where a hearing is sought by party, it would usually be granted by the court. This is because the Court ordinarily proceeds by way of oral hearing so that parties’ positions can be advanced and tested in a manner not always so readily achieved on paper. Questions can be asked and answered which may throw a different light on matters. There is always the possibility of the Court misunderstanding the position without such an opportunity and the English Court tradition has always been one of oral argument and presentation. The exchange between counsel and judge in probing questions and receiving answers is beneficial to the administration of justice.”

    (2) In Midnight Marine v Thomas Miller however, Males J. suggested that it was time for a rather different and more exacting approach.

    In that case, a multiple section 69 and section 68 application was mounted by the applicant. The essence of the section 68 challenge was that the tribunal had exceeded its jurisdiction by holding that, if not time barred, the applicant’s claim against underwriters fell to be struck out for inordinate delay under section 41(3) of the 1996 Act because its position was to be seen as a defendant and not a claimant. The section 68 application was dismissed on paper as hopeless. The applicant renewed the application and the parties agreed upon a consent order providing for a full hearing, which was approved by the Court. After that full hearing, the application was again dismissed as without merit.

    Males J. expressed his concern at the very outset of his judgement:

    “[3] The procedure in paragraph O8.5 the Commercial Court Guide for dismissal of a section 68 application at a hearing is intended to be a summary procedure for identifying and disposing economically and promptly of hopeless applications. The provision for an oral hearing of an application to set aside a dismissal on paper should not lead to a major escalation in the costs incurred in dealing with unmeritorious section 68 challenges

    [4] I am concerned that in the present case the application to set aside the dismissal on paper has been argued as fully as the section 68 application itself would have been. If that were to become the standard procedure, the availability of a procedure for dismissal on paper would achieve nothing.”

    After dealing with the merits of the applications, he proposed a more restrictive and structured approach to section 68 renewed applications.

    He pointed out that the ‘paper stage’ and a dismissal on paper at the first stage of O8.5 was concerned solely with the arguability of the section 68 application and whether or not it had a realistic prospect of success, nothing more.

    From that starting point, he explained why it would never be appropriate to have a full section 68 type hearing on the renewed oral application under O8.5: this was because the issue remained the same short one: did the applicant have an arguable case or not? That could be addressed in a summary manner, similar to that adopted for applications for permission in other contexts (e.g. as formerly to the Court of Appeal and as in judicial review applications).  

    “But it must be remembered that the question at that oral hearing will simply be whether there is a real prospect of success such that the case should be allowed to go forward to a full hearing of the section 68 application. If the oral hearing for which paragraph O8.5 provides becomes effectively a full hearing of the section 68 application preceded by a further round of submissions and evidence, the objective of weeding out hopeless applications at an early stage by a prompt and economical procedure will have been frustrated.” [38]

    Males J. suggested a new approach which would effectively dispense with a contested oral hearing [39]. The features of the new procedure would be:

    1. Only a short hearing, “typically no more than 30 minutes”.
    2. Listed before the judge who has dismissed the application without a hearing (who would therefore be already familiar with the issues).
    3. No further written submissions save for a statement by the applicant as to why the Judge’s reasons for dismissal were contested.
    4. Perhaps most revolutionary (and as odds with the approach endorsed in Asset Management) “in general respondents should not attend or, at any rate, should not recover their costs if they do”: this being justified by the fact that “bearing in mind the limited nature of the issue, i.e. whether the claim has a real prospect of success, and that respondents will already have made submissions on the point in writing”.
    5. Special cases might exceptionally need to be dealt with differently but this procedure should otherwise apply generally.

    The Way Ahead?

    It seems clear that this suggested way forward will certainly be tabled for consideration by the Commercial Court judges and users, given that Males J. stated that the matter “merits further consideration by the judges of this court”.

    There is much to be said for the Males J. approach.

    In restricting as much as possible the disruption in and delays to the enforcement of an award which are occasioned by unmeritorious challenges, the Court supports English arbitration and allays concerns that English seated arbitrations are too exposed to judicial challenge. 

    The exploration of the issues on the proposed section 68 application, which Sir Jeremy Cooke thought potentially valuable, is fully catered for by the “short hearing” at which the applicant will have its case tested by the Judge who has already fully read in and at which the applicant will be able, if possible, to show that an initial view on paper that the case is hopeless is wrong. The prospect of this limited further stiff hurdle will probably discourage all but the most dogged and desperate or those who are faced with the rare case of an unduly harsh paper determination. Paragraph O8.5 already makes it clear that indemnity costs will usually await the applicant who chooses to roll the dice a second time.

    Simon Rainey QC

    Simon Rainey QC is one of the best-known and most highly regarded practitioners at the Commercial Bar noted for his intellect and advocacy. 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. Recent arbitral appointments include an ICC Paris seat arbitration concerning a power station failure, a French law and seat arbitration relating to an oil rig drilling contract, an offshore construction contract claim under SIAC Rules and a long-term ore supply contract claim under Swiss Rules.

    He is highly ranked by Chambers and Partners and Legal 500 as a first division international arbitration specialist (“Highly regarded for his expertise in handling high-profile international arbitrations in connection with complex oil and gas, banking and finance and trade issues. He is well known for his prowess in advising and representing clients in disputes in countries as far flung as Turkey, Russia, the USA, China and India” 2018; “Incredibly good, with a particular skill in reducing the complicated to the elegantly simple, which when you're trying to present a case to a tribunal or court is one of the more valuable things you need to have” 2018; “Clearly now one of the top commercial silks and a delight to work with.” 2018; “A mixture of brilliance and brevity, his written submissions are like poetry” 2018), He was nominated for “International Arbitration Silk of the Year” 2017 and again in 2019 by Legal 500 and has also been 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.

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

    simon.rainey@quadrantchambers.com