Aquavita International SA and Another v Ashapura Minechem Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Burton |
| Judgment Date | 08 July 2015 |
| Neutral Citation | [2015] EWHC 2807 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: 2013 1404 |
| Date | 08 July 2015 |
[2015] EWHC 2807 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr Justice Burton
Case No: 2013 1404
Mr Stevenson (instructed by MFB Solicitors) appeared on behalf of the Claimants
The Defendant did not appear and was not represented
(As Approved)
Digital Transcript of Wordwave International Ltd trading as DTI 8th Floor, 165 Fleet Street, London, EC4A 2DY Tel No: 0207 404 1400 Fax No: 020 7404 1424 Web: www.DTIGlobal.com Email: TTP@dtiglobal.eu (Official Shorthand Writers to the Court)
This has been the trial of an action between Aquavita International SA and Glendive Enterprises Limited as Claimants and Ashapura Minechem Limited as Defendant.
The Defendant took a full part in the action at an early stage. First of all it challenged the jurisdiction of the Court by reference to its assertion that the guarantee sued on was not subject to English law. That application failed, and thereafter, the Defendant instructed English solicitors and undertook a cooperative part in preparing the case for trial.
However, their enthusiasm for the action waned, it would appear, as time went on; and in the end there was an Order by Phillips J dated 19 June 2015, ordering that they gave disclosure of what had, in fact, been agreed disclosure relating both to the facts and the expert evidence and that, unless they provided disclosure by 29 June of the documents set out in the Order, the Defendant would be debarred from adducing any expert evidence. They did not comply, so they were debarred from adducing any such evidence. The consequential Order by Phillips J was that in the event that the Defendant failed to comply with that unless order, the Claimants were to notify the Court by 30 June, and the trial estimate was to be reduced to two days, with half a day pre-reading. In any event, the Claimants were permitted to call their expert, Mr Adil Patel, to give evidence by way of videolink.
In the event, the Defendant has not continued to instruct solicitors. On 8 June the Claimants were served with an order stating that their then solicitors, Ince & Co, had come off the record. The case has proceeded to trial on the basis that I would hear the evidence put forward by the Claimants and adjudicate on their claim, albeit that the Defendant has chosen not to attend, and effectively thereby put the Claimants to proof of their case.
I have read the evidence of fact adduced by the Claimants which was contained primarily in the statements of two witnesses, Mr Viktor Kruchek and Mr Evgeniy Lavrenko, who made two witness statements; neither of them have attended, one being based in the Ukraine and one in Athens, but both of whom have had their evidence rendered fully admissible by the service of hearsay notices.
So far as the Defendant is concerned, there is one factual witness who has served a statement. There are a number of other statements relating to other matters but the substantive witness statement from the Defendant is that by Mr Deepak Kamath, his second witness statement, as it is described, although it is in fact the third, dated 2 April 2015. I have read that statement and taken account of it, although it is inevitably of far lesser weight than it would have been, if it had been subject even to a hearsay notice, but certainly if Mr Kamath had attended and given evidence and been cross-examined. And although Mr Kamath made a number of admissions in his witness statement upon which the Claimants rely, as I shall describe, insofar as there is anything in there which goes to challenge the Claimants' case, I prefer the evidence of the Claimants which has been rendered fully admissible.
I have also had the evidence of two expert witnesses for the Claimants, from Mr Richard Goodall, who came to court and gave evidence, and who is a senior and experienced expert in the field relating to this case, as to the quantum of the claim; and Mr Adil K Patel who is an Indian lawyer and advocate and he has given evidence by videolink.
Apart from that, of course, I have had the benefit of documents before me and I have read the very full skeleton argument prepared by Mr Stevenson of Counsel.
The Claimants allege that there has been a breach of the COA which was negotiated by the Defendant and the First Claimant in October 2011. Following the negotiation of the COA, the Defendant nominated Arabian Resources FZC, a company registered in the UAE, as the performing charterer and a performance guarantee was provided to the Claimants by the Defendant. It is an Indian company.
The allegations, now before me to be proved, are that Arabian Resources breached the COA by failing to pay demurrage in the sum of US$119,872.73 in respect of one of the three shipments that were completed, and, by only shipping 132,000 tonnes, failing to provide cargoes for three further shipments, the subject of the COA, which resulted in the Claimants suffering the loss of US$814,052.
The Claimants seek to recover those sums from the Defendant under the terms of the guarantee to which I have referred.
I have indicated that the Claimants needed permission from Field J on 24 October 2013 to serve the claim out of the jurisdiction on the Defendant, on the ground that the contract of guarantee was governed by English law, and that the High Court was the appropriate forum, and that permission was granted, as I have indicated earlier. The Defendant's application to set it aside was refused by Popplewell J; whereafter the pleadings were served.
The Defendant it is, it appears, a very substantial company. It is what has been called a flagship company, it would seem from the Group's annual reports, in the Ashapura Group, India's largest multinational solutions provider and one of the world's largest exporters of bauxite. The First Claimant is a shipping company in the business of chartering and operating vessels. The Second Claimant is an affiliate of the First Claimant and in this case was nominated by the First Claimant as the freight beneficiary under the COA. I can deal immediately with the position of the Second Claimant.
The First Claimant's primary case is that it, and it alone, is entitled to recover the losses under the COA to which it was a party, as I have described; and that the Second Claimant was, it seems on the evidence, merely nominated as the freight beneficiary in order to take advantage of Indian tax exemption. Certainly from the way that the three shipments which were actually nominated and performed took place, it is quite clear that that was indeed the reality and that the First Claimant incurred the expenses of the shipments.
The reason for the alternative case was that there was some evidence which could have supported an argument, had it been made, that the Second Claimant was not simply a freight beneficiary, but rather the owner under the COA; and thus the counterpart of Arabian Resources.
In its Defence, the Defendant admitted that the COA was between the First Claimant and Arabian Resources and has denied that the Second Claimant was a party to the contract. In those circumstances, the precaution taken of joining the Second Claimant to the action was rendered, in the event, unnecessary, but the Second Claimant's addition has neither in any way expanded the ambit of the case, nor resulted in any additional costs nor, in fact, did it bear the burden of the costs paid by the First Claimant to its solicitors.
The COA was negotiated by the Defendant, through Mr Vishal Bajpai, with the First Claimant; and, in October 2011, the First Claimant agreed to provide tonnage to carry 250,000 metric tonnes of bauxite, 10 per cent more or less at Owner's option from India to Georgia between 2011 and March 2012. The terms of the COA were recorded in a fixture recap exchanged by Mr Bajpai and a Mr Konstantin Tkach, on behalf of the First Claimant, on 11 October 2011.
The relevant text of the COA reads as follows; and I will add certain words which were abbreviated in the form itself. The agreement was by the Defendant or its " guaranteed nominee" Arabian Resources, who were to be performing charterers.
"[Charterers] to declare nominee at the time of lifting subs.
Ashapura to [guarantee] performance of the nominee by sideletter. However, Ashapura not to be mentioned in [original] charterparty as [Charterers ] or Guarantors.
Owners Aquavita, [the First Claimant], (as disponent owners).
Owners [have the] right to nominate freight beneficiary/performing [owners] in charter party. In case [freight] beneficiary any other company, then Aquavita to [guarantee] performance of such nominee as per attached wording… [Owners] to advise details of [freight] beneficiary before [charterers] lifting subs.
" 2. Total [quantity]: 250,000 mt, 10 [per cent] [more or less owners option], bauxite in bulk.
" 3. Each shipment 40,000 mt, 10 [per cent] [more or less owners' option]….
discharge rate for [quantity] discharged at anchorage to be 3,000 mt …
" 4. Shipment period November 2011 to March 2012 fairly evenly spread. [Charterers] to give advance notice of each shipment (together with 7 days laycan spread) not less than 10 clear running days before commencement of laycan. Performing vessel to be nominated by owners minimum 5 clear days before [vessel] arrival at load port.
" 5. Load port, [1 safe berth, 1 safe port] Dighi followed by completion at [1 safe anchorage, 1 safe port] Dighi
6. [Discharge port] [1-2 safe berths], [1 safe port], Poti, Georgia.
…
"11. Demurrage rate to be nominated with performing [vessel] but [maximum] usd 18,000 per day pro rata half dispatch [with time saved at both ends].
…
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