AELF MSN 242, LLC (a Puerto Rico Ltd liability company) v De Surinaamse Luchtvaart Maatschappij N.v D.B.A. Surinam Airways

JurisdictionEngland & Wales
JudgePeter MacDonald Eggers
Judgment Date14 March 2022
Neutral Citation[2022] EWHC 544 (Comm)
CourtQueen's Bench Division (Commercial Court)
Docket NumberCase No: CL-2021-000207

[2022] EWHC 544 (Comm)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS

OF ENGLAND AND WALES

COMMERCIAL COURT (QBD)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Peter MacDonald Eggers QC

(sitting as a Deputy Judge of the High Court)

Case No: CL-2021-000207

Between:
AELF MSN 242, LLC (a Puerto Rico limited liability company)
Claimant
and
De Surinaamse Luchtvaart Maatschappij N.V. D.B.A. Surinam Airways
Defendant

Hannah Brown QC (instructed by W Legal Limited) for the Claimant

Tom Stewart Coats (instructed by Bird & Bird LLP) for the Defendant

Hearing date: 22nd February 2022

Approved Judgement

Peter MacDonald Eggers QC

SITTING AS A DEPUTY JUDGE OF THE HIGH COURT

Introduction

1

The Claimant (“AELF”) is an aircraft leasing company and the Defendant (“SLM”) is the national flag carrier of Suriname.

2

The Claim Form in this action was issued by AELF in support of its claims against SLM 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 SLM agreeing to pay the total sum of US$4,150,000 by way of monthly instalments of US$100,000 commencing on 1st December 2020. The Settlement Agreement contained an exclusive English jurisdiction clause.

3

On 21st December 2021, I handed down judgment in this action disposing of applications made by SLM for an extension of time in which to file an acknowledgment of service and challenging the Court's jurisdiction by reason of the alleged defective service of the Claim Form on SLM. In that judgment, I decided to grant the application for an extension of time and dismissed the application challenging the Court's jurisdiction.

4

This judgment concerns the latter application. SLM had issued the application challenging the Court's jurisdiction pursuant to CPR rule 11(1). This application was based on the premise that SLM was entitled to be, but was not in fact, served with the Claim Form in accordance with the procedure set out in section 12(1) of the State Immunity Act 1978 which requires a Claim Form in proceedings against a State to have been served by being transmitted through the Foreign, Commonwealth and Development Office to the Ministry of Foreign Affairs of that State. SLM's case is that although it is not a “ State”, it is a “ separate entity” for the purposes of section 14 of the 1978 Act and so was entitled to be served with the Claim Form in accordance with the procedure set out in section 12(1); therefore, the Claim Form should have been served by being transmitted to the Ministry of Foreign Affairs of Suriname, but was not.

5

In contesting SLM's application, AELF advanced a number of arguments, including that SLM was not entitled to be served in accordance with section 12(1), because (a) it was not a “ State”, (b) in any event SLM had agreed that service should be effected upon it by the Bailiff, and Mr John Vrede (SLM's Manager of Legal Affairs) agreed by email on 2nd June 2021 and made the appointment to accept service, and so service was valid in accordance with section 12(6) of the State Immunity Act 1978, and (c) SLM had submitted to the jurisdiction.

6

On 3rd November 2021, Henshaw, J directed that there be a short oral hearing of SLM's jurisdiction application but that the oral hearing should be limited to the last-mentioned issue, namely whether SLM had submitted to the jurisdiction, and that if necessary the remaining issues be disposed of at a later hearing. This direction was made for good reason on case management grounds.

7

In dismissing SLM's application challenging jurisdiction, I held that SLM had submitted to the jurisdiction by way of a common law waiver, rather than a statutory form of submission. In dealing with this application, it occurred to me that there was an issue as to whether a common law waiver was sufficient for the purposes of section 12(3) of the State Immunity Act 1978, which provided that A State which appears in proceedings cannot thereafter object that subsection (1) above has not been complied with in the case of those proceedings. As a result, although the issue had not been addressed during the oral hearing of the application, I invited the parties to address this issue by written submission, which they did. Upon considering the parties' written submissions, I concluded that a common law waiver constituted an appearance within the meaning of section 12(3).

8

After I gave judgment on 21st December 2021, but before the order dismissing the application had been sealed, SLM made an application for permission to appeal against the dismissal of the jurisdiction application on the sole ground that section 12(3) does not encompass a common law waiver or submission and that conduct which would amount to common law waiver or submission cannot prevent reliance on section 12(1) of the State Immunity Act 1978 in cases where the defendant does not also “ appear in proceedings” for the purposes of section 12(3).

9

In response to this application for permission to appeal, AELF submitted that SLM in pursuing an appeal would be abusing the Court's process in an action in which it has no defence and has applied to challenge jurisdiction in which it has no prospects of success and that the Court should be astute to ensure that there is no further unreasonable delay by permitting an appeal to take place.

10

I indicated to the parties that I was inclined to grant permission to appeal on this ground relating to section 12(3), but I also saw the force of AELF's submission in that an appeal might take a considerable time in which to be heard and that time and costs might potentially be wasted on an appeal if it were ultimately held, after any appeal, that SLM were not entitled to rely on section 12(1) in any event. I therefore proposed to deal with the remaining issues arising from SLM's jurisdiction application before deciding whether to grant permission to appeal. However, I was concerned that there might be a procedural objection to my taking this course given that I had already dismissed the jurisdiction application by my judgment dated 21st December 2021.

11

In the event, the parties were agreed that it would make sense for me to dispose of the remaining issues arising from the jurisdiction application and pointed out that this was a permissible course since the order dismissing the application had not yet been perfected or sealed. SLM also submitted that I might withdraw my judgment handed down on 21st December 2021. I did not consider that that was an appropriate course because there was no prospect that I would change my decision as to the construction of section 12(3) by reference to the common law waiver which I had found to be established.

12

In agreeing to adopt this course, SLM's counsel, Mr Tom Stewart Coats, referred me to the decision of the Court of Appeal in AIC Ltd v Federal Airports Authority of Nigeria [2020] EWCA Civ 1585; [2021] 1 WLR 1506. I understand that an appeal from that decision to the Supreme Court has been heard and is awaiting judgment. In that case, Coulson, LJ held at para. 50–60 that:

(1) The finality of an order is an important principle in the administration of justice.

(2) An order takes effect from the time it is made and not when the order is perfected by sealing.

(3) Nevertheless, there is a particular jurisdiction — which must be carefully patrolled — which permits a judge to change his or her order between the handing down of the judgment and the subsequent sealing of the order.

(4) This jurisdiction is founded on the overriding objective in CPR rule 1.1.

(5) The power to reconsider an order is an exercise of judicial discretion.

(6) It is a jurisdiction which could be exercised on the judge's own initiative or on the application of one or both of the parties.

(7) In exercising this jurisdiction, there are two distinct questions which the Court must ask itself if it is asked by one of the parties to reconsider an order which has been pronounced but not yet been sealed: (a) whether the application to reconsider should be entertained in principle and whether there is a reasonably arguable basis for the application; and, if so, (b) whether or not the order should be changed in the exercise of the judicial discretion in accordance with the overriding objective.

(8) The Court's undoubted jurisdiction to reconsider its earlier order cannot be permitted to become a gateway for a second round of wide-ranging debate.

13

The present case is not a case where I am reconsidering the order I decided to make in my judgment handed down on 21st December 2021. Instead, I am considering whether there are further grounds for justifying the order. The reason for doing so is to decide whether or not there should be permission to appeal. The competing scenarios facing the parties and the Court are as follows:

(1) If I did not consider the other grounds of SLM's jurisdiction application and I granted permission to appeal from my decision on the meaning and application of section 12(3) of the 1978 Act, the appeal might be allowed or dismissed. If dismissed, the substantive claim in the action would proceed. If allowed, the remaining grounds of the jurisdiction application would have to be determined. If the remaining grounds were determined in favour of SLM or AELF, there might be a further application for permission to appeal. In that event, the substantive claim would not be progressed after a long period of delay, a delay which is difficult to justify.

(2) If I considered and determined the other grounds of SLM's jurisdiction before deciding whether to grant permission to appeal on the section 12(3) issue, there might well be a further application for permission to...

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  • Simon Bain Building Services Ltd v Ms Jenna Cardone
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    • 17 de novembro de 2023
    ...relieving the defendant from sanctions in accordance with CPR 3.9: see AELF MSN 242 LLC v Surinam Airways [2021] EWHC 3482 (Comm); [2022] 1 WLR 2181 at [45]–[46]. If the application is successful, the right to challenge jurisdiction is retrieved provided that there has not been a submissi......
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