Aelf Msn 242, LLC (a Puerto Rico Ltd liability company) v De Surinaamse Luchtvaart
| Jurisdiction | England & Wales |
| Judge | Peter MacDonald Eggers |
| Judgment Date | 21 December 2021 |
| Neutral Citation | [2021] EWHC 3482 (Comm) |
| Docket Number | Case No: CL-2021-000207 |
| Year | 2021 |
| Court | Queen's Bench Division (Commercial Court) |
[2021] EWHC 3482 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Peter MacDonald Eggers QC
(sitting as a Deputy Judge of the High Court)
Case No: CL-2021-000207
Hannah Brown QC (instructed by W Legal Limited) for the Claimant
Tom Stewart Coats (instructed by Bird & Bird LLP) for the Defendant
Hearing dates: 26th November 2021
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Peter MacDonald Eggers QC
Peter MacDonald Eggers QC:
Introduction
The Claimant (“AELF”) is an aircraft leasing company and the Defendant (“SLM”) is the national flag carrier of Surinam.
In this action, AELF claims sums by reason of SLM's alleged breach of a Settlement Agreement and Termination Deed (“the Settlement Agreement”) concluded between them on 26th June 2020, by which the parties agreed to settle AELF's claim for more than US$23 million against SLM arising under the terms of an aircraft lease agreement. By clause 3.1 of the Settlement Agreement, SLM agreed to pay the total sum of US$4,150,000 by way of monthly instalments of US$100,000 commencing on 1st December 2020. AELF asserts that SLM has failed to pay the sums when due and consequently AELF served a notice of acceleration dated 2nd April 2021 pursuant to clause 3.4 of the Settlement Agreement. The Settlement Agreement contains an exclusive English jurisdiction clause (clause 10.2).
SLM has not yet served a Defence and instead has issued an application notice challenging the Court's jurisdiction pursuant to CPR Part 11. However, as is common ground, SLM did not file an acknowledgment of service by 25th June 2021, being the last day of the period allowed for the filing of the acknowledgment.
The applications before the Court are SLM's application for an order for the extension of time in which to file an acknowledgment of service and an application challenging the Court's jurisdiction by reason of the alleged defective service of the Claim Form on SLM. However, only one aspect of the application challenging the Court's jurisdiction is to be determined, namely whether SLM has submitted to the jurisdiction.
Procedural background
On 5th April 2021, AELF issued a Claim Form and Particulars of Claim.
On 14th April 2021, Bryan, J made an order permitting the service of the Claim Form, the Particulars of Claim “ and any other document in these proceedings” on SLM in Surinam and requiring the acknowledgment of service to be filed within 22 days after service.
On 3rd June 2021, the Claim Form was said by AELF to have been served on SLM in Surinam by a bailiff leaving a copy with Mr John Vrede, SLM's Manager of Legal Affairs, pursuant to an appointment made with Mr Vrede.
On Friday 25th June 2021, SLM attempted to file with the Court (in particular, the Commercial Court Listing Office) an acknowledgment of service by email.
Later, on 25th June 2021, the Court informed SLM by email that “ Pursuant to Practice Direction 51O, it is no longer acceptable to file documents via email. Documents should be filed through Ce-File …”.
On Monday 28th June 2021, SLM e-filed its first acknowledgment of service (“the First Acknowledgment”). The First Acknowledgment was signed by SLM's Chief Executive Officer and included a physical address and an email address for service on SLM in Surinam. However, it did not include a physical address for service within the United Kingdom. In addition, this acknowledgment of service stated that “ The Defendant intends to defend all of this claim”. The box indicating the Defendant's intention to contest jurisdiction was not ticked or checked.
On the same day, 28th June 2021, AELF wrote to the Court (without a copy to SLM) requesting it to enter a default judgment against SLM stating that:
“ We also attach an exchange of emails between the Defendant and the Court. It appears that no Acknowledgment of Service has been accepted by the Court.
In any event, the form of Acknowledgment of Service we have seen is defective in that it does not include a proper address for service in the jurisdiction.
Accordingly, please enter a default judgment.
If there is any doubt about whether a default judgment should be entered, we should be grateful if you could place this letter and attachments before a judge, with a request that the judge direct whether or not a default judgment should be granted.”
AELF's request for default judgment was initially rejected by the Court because the request used a form which asked for costs to be assessed.
On 30th June 2021, AELF filed a revised request for default judgment.
SLM then instructed English solicitors, Bird & Bird LLP (“Bird & Bird”). On 8th July 2021, Bird & Bird filed a notice of change of legal representative for AELF which provided Bird & Bird's London address as an address for service within the jurisdiction.
On 9th July 2021, SLM issued an application notice for an extension of time in which to file its Defence until 30th July 2021.
On 21st July 2021, AELF's solicitors, W Legal Ltd (“W Legal”), wrote to the Court stating that “ It is now over 3 weeks since the request for judgment in default of Acknowledgment of Service was lodged. I should be grateful to hear whether judgment is being granted”. This was not copied to SLM or Bird & Bird.
On 22nd July 2021, without the benefit of any submissions on behalf of SLM, Henshaw, J directed that no default judgment should be entered without giving the parties an opportunity to address the Court, stating that:
“ Following Bryan J's order of 14.4.21, the AoS was due within 22 days after service on 3.6.21, hence by 25.6.21. The file indicates that the AoS was emailed to court on 25.6.21 but CE filed only at 14:51 on 28.6.21. A Request for default judgment was purportedly filed at 09:33 on 28.6.21 but rejected and refiled on 30.6.21. It therefore appears that the AoS, if valid, would have been filed before the Request for CPR 12.3(1) purposes.
The AoS was defective as it did not contain, as an address for service, a business address for a solicitor (or other residential or business address) in the UK or other EEA state. It therefore did not comply with CPR 10.5(b), read with CPR 6.23(2), and as per note 10.5.5 should have been rejected as irregular. Other things being equal, the Claimant would be entitled to enter a default judgment on expiry of the deadline for filing of the AoS (25.6.21).
However, on 8.7.21 English solicitors, Bird & Bird, filed a notice of change indicating that they had been instructed to act on behalf of D, stating an address for service within the jurisdiction. Bird & Bird the following day filed an application for an extension of time for D to serve its Defence. In these circumstances it might be argued that the defect in the AoS, namely the [specification of] an address for service in the jurisdiction, has been superseded by the provision of such an address in the notice of change. Although I have some doubt about the strength of any such argument, in the circumstances which have arisen it appears to me that it would not be appropriate to enter judgment in default without first giving the parties an opportunity to address this matter. I therefore invite both parties to file and serve any submissions by 4pm on Monday 26.7.21, indicating also whether either of them seeks an oral hearing. Pending resolution of this issue, the application for an extension of time to serve a Defence should be adjourned and the court should not enter judgment in default of Defence.”
On 23rd July 2021, SLM issued an application notice challenging the Court's jurisdiction pursuant to CPR rule 11(1) and seeking an order that Bryan, J's order dated 14th April 2021 be set aside to the extent that it permitted service on SLM otherwise than in accordance with section 12(1) of the State Immunity Act 1978 and a declaration that SLM had not been validly served with the Claim Form, Particulars of Claim or any other document purportedly served by AELF in accordance with the Court's order dated 14th April 2021. In support of that application, SLM served a witness statement dated 23rd July 2021 by Mr John Vrede (SLM's Manager of Legal Affairs). At paragraphs 7–8 of that statement, Mr Vrede said that:
“ 7. It is the Defendant's position that these proceedings were required to be served on the Defendant in accordance with section 12(1) of the State Immunity Act 1978 which provides that “any writ or other document required to be served for instituting proceedings against a State shall be served by being transmitted through the Foreign, Commonwealth and Development Office to the Ministry of Foreign Affairs of the State and service shall be deemed to have been effected when the writ or document in received at the Ministry”.
8. It is the Defendant's position that, although it is a “separate entity” for the purposes of section 14 of the State Immunity Act, these proceedings relate to an act done by the Defendant in the exercise of the Republic of Suriname's sovereign authority. As a result, these proceedings were required to be served under the procedure set out in section 12(1) of State Immunity Act. Since they were not, there has been no valid service on the Defendant.”
On 26th July 2021, the parties filed written...
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