Aegean Baltic Bank S.A. v Renzlor Shipping Ltd
| Jurisdiction | England & Wales |
| Judge | Adrian Beltrami |
| Judgment Date | 30 October 2020 |
| Neutral Citation | [2020] EWHC 2851 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Claim No. CL-2018-000706 |
Mr. Adrian Beltrami QC
Sitting as a Judge of the High Court
Claim No. CL-2018-000706
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A, 1NL
Peter MacDonald Eggers QC and Henry Moore, instructed by Waterson Hicks, on behalf of the Claimant
The First and Second Defendants did not appear and were not represented
The Third Defendant appeared in person
Hearing dates 19, 20, 21 and 22 October 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Adrian Beltrami QC:
INTRODUCTION
The Claimant in this action is Aegean Baltic Bank SA (the Bank), a bank incorporated in Greece. It claims in debt and damages under a loan agreement dated 15 October 2007, as subsequently varied by amendment (the Loan Agreement), and related security agreements (the security documents). Pursuant to clause 1.1 of the Loan Agreement, the Bank made available a loan of up to USD 9 million to finance the cost of repairs to and provide liquidity for the oil and chemicals tanker M/T “STARLET” (the Vessel).
The Defendants are, respectively:
a. Renzlor Shipping Ltd (the Owner), a company incorporated under the laws of the Marshall Islands, the owner of the Vessel and the Borrower under the Loan Agreement.
b. Oceanwide Shipping Ltd (the Manager), a company incorporated under the laws of the Marshall Islands, the manager of the Vessel.
c. Alexandros Tranos ( Mr Tranos), the managing director of the Manager.
The Loan Agreement is governed by English law. The sole contracting parties were the Bank and the Owner. It was amended on 5 occasions, most recently on 23 June 2015. The security documents include guarantees, dated 15 October 2007, provided by the Manager and Mr Tranos (respectively the Corporate Guarantee and the Personal Guarantee, and together the Guarantees). The Guarantees are governed by Greek law.
In this action, the Bank claims:
a. Against the Owner under the Loan Agreement.
b. Against the Manager under the Corporate Guarantee.
c. Against Mr Tranos under the Personal Guarantee.
The claim is for the outstanding indebtedness under these agreements (the outstanding indebtedness). Save possibly for one point on default interest which I address below, the Defendants do not dispute the quantum of the claim, which is the same against each Defendant. As at 13 October 2020, this stood at USD 9,979,972.21, as certified by the Bank in accordance with clause 5.4 of the Loan Agreement.
The Statements of Case disclose no dispute as to the primary elements of the Bank's claim. The Agreed Case Memorandum records as common ground that the sums claimed by the Bank fell due under the terms of the Loan Agreement and the security documents and that the Defendants have failed to pay those sums. The foundation of the Defence is the contention that the Bank acted negligently or otherwise in breach of duty in its conduct of certain insurance claims following damage to the Vessel in July 2015. It is said that claims against the Bank in respect of such conduct provide a defence of circuity of action or set-off in favour of the Owner and that the Guarantees have been discharged under Greek law.
PROCEDURAL BACKGROUND
The Bank was represented at trial by Mr MacDonald Eggers QC and Mr Henry Moore, instructed by Waterson Hicks. The Owner and the Manager retain solicitors on the record, Trowers & Hamlins LLP ( Trowers), but they did not attend the trial and were not represented. Pursuant to a Notice dated 16 October 2020, Trowers came off the record for Mr Tranos. Mr Tranos participated in the trial on his own behalf.
The procedural background may be summarized as follows. The Claim Form was first issued on 31 October 2018 and the Particulars of Claim are dated 17 January 2019. The Defendants served a joint Defence on 28 March 2019, which was amended on 17 July 2019. The Bank's Reply was served on 18 April 2019 and amended on 27 September 2019. On 6 September 2019, the Defendants provided a response to the Bank's CPR Part 18 request for further information.
The Defendants' further participation in the proceedings has been sporadic. Specifically:
a. The CMC was a held on 19 July 2019 before Mr Christopher Hancock QC, sitting as a Judge of the High Court. The Defendants were legally represented by solicitors and Counsel and the parties had engaged in discussions about disclosure pursuant to CPR PD 51U. By Order dated 26 July 2019 the Judge set a timetable for disclosure, with lists to be exchanged on 20 December 2019 and documents produced on 24 January 2020. He also approved the parties' costs budgets to trial.
b. The Bank complied with its obligations to provide disclosure but the Defendants did not. On the contrary, they produced no disclosure at all. On 21 February 2020, Butcher J ordered that unless the Defendants complied by 13 March 2020:
“… the Defendants shall not be entitled to adduce or rely upon any witness evidence of fact or expert evidence in support of their Defence (as amended on 17 July 2019).”
He also ordered that the Defendants pay the costs of the Bank's application, assessed at £40,000.
c. The Defendants did not attend and were not represented at the hearing before Butcher J. Nevertheless, the Judge was able to conclude that the Defendants' failure to comply with their obligations was deliberate:
“ It is, in my judgment, reasonable to infer on the basis of the material before me at the moment that the defendants' failure to give disclosure to date is deliberate, apparently being a step taking in tandem with disengagement from these proceedings and pursuit of litigation in Greece.”
d. The Defendants did not provide disclosure by 13 March 2020, and have never done so. The sanction ordered by Butcher J has accordingly come into force. The default remains unremedied. Nor have the Defendants satisfied the costs order which was made.
e. On 21 September 2020, Trowers replaced Hill Dickinson LLP ( Hill Dickinson) as the solicitors on the record for the Defendants. On 28 September 2020, the Court heard an application by a third party for joinder to the proceedings. The application was supported by the Defendants, who on this occasion did attend by solicitors and Counsel, and who also argued for a consequential adjournment of the trial. By Order dated 28 September 2020, Henshaw J dismissed the application and ordered the Defendants to pay a proportion of the Bank's costs. The transcript of the Judge's Ruling records that Counsel for the Defendants indicated (in the light of some doubt apparently expressed by the third party) that their then current intention was to attend the trial.
f. As I have mentioned, Trowers came off the record for Mr Tranos on 16 October 2020. I have seen an email from Mr Ned Beale of Trowers to the Court office timed at 09.16 on 19 October 2020 requesting that a video link be sent to Mr Tranos so that he could participate. Mr Beale went on to say that, so far as Trowers were concerned, “ we will not be participating in the hearing.”
It was necessary for me to consider whether to proceed in the absence of the Owner and the Manager, noting that under CPR 39.3 this falls within the Court's discretion. These parties have at all times retained, and still retain, solicitors on the record. They are plainly aware of the trial date. I asked Mr Tranos why it was that the Owner and Manager were not attending the trial and he told me that they had determined that they would not have a full defence and therefore decided not to participate. In all the circumstances, I considered it appropriate to carry on with the trial notwithstanding their absence. Mr Tranos was able to conduct his own defence in person.
On the morning of the second day of the trial, just before the evidence was due to be heard, Mr Tranos applied for permission to deploy certain additional documents, most of which, he said, were in the Bank's possession and should have been disclosed by the Bank (although there had hitherto been no complaint about the Bank's disclosure). He was not, even at that late stage, purporting to comply with his own disclosure obligations. The application, which was opposed by the Bank, was in substance seeking relief from sanctions. I declined to permit Mr Tranos to introduce at the last minute what was no more than a selective cache of documents.
One of the self-inflicted consequences of the Order of Butcher J was that there were impediments to the presentation of Mr Tranos' case. In practical terms, it was almost impossible for Mr Tranos to avoid mixing his submissions, which he was entitled to make, with statements of evidence, which he was not. I allowed Mr Tranos to argue his case in the way that he wished. Nevertheless, as Mr MacDonald Eggers submitted, I can proceed only on the basis of the evidence which is properly admissible.
THE CONTRACTUAL DOCUMENTS
The Loan Agreement provided for repayment on the Final Maturity date which fell, following amendment, on 10 January 2020. So far as relevant, there were provisions for interest and default interest, information covenants and stated Events of Default, including the non-payment of sums due. By clause 9.9, upon an Event of Default, the Bank was entitled to accelerate repayment of the outstanding indebtedness and to exercise...
To continue reading
Request your trial
-
Lakatamia Shipping Company Ltd v Nobu Su / Hsin Chi Su (aka Su Hsin Chi; aka Nobu Morimoto)
...so verified is not evidence for the purposes of the trial (see CPR 32.6(2))”. (iv) In Aegean Baltic Bank SA v Renzlor Shipping Ltd [2020] EWHC 2851 (Comm) (Adrian Beltrami QC), the court had to consider the position where a defendant had been debarred from calling evidence, but had previou......