Good Challenger Navegante SA v Metalexportimport SA

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Clarke
Judgment Date24 November 2003
Neutral Citation[2003] EWCA Civ 1668
Docket NumberCase No: A3/2003/0242
Date24 November 2003

[2003] EWCA Civ 1668

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGHT COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

(MR MICHAEL CRANE QC)

Royal Courts of Justice

Strand,

London, WC2A 2LL

Before:

Lord Justice Mantell

Lord Justice Clarke

and

Mr Justice Rimer

Case No: A3/2003/0242

Between:
Good Challenger Navegante S.A. Respondent
Metalexportimport S.A.
Appellant

Mr Duncan Matthews QC and Mr Michael Ashcroft (instructed by Holman, Fenwick & Willan) for the Respondent

Mr James Turner (instructed by Lane & Partners) for the Appellant

Lord Justice Clarke

Introduction

1

This is in some ways a remarkable case. It involves the continued attempts of the respondent to enforce an award made by London arbitrators against the appellant as long ago as 15 June 1983.

2

The award arose out of a claim by the respondent as owner of the vessel GOOD CHALLENGER for demurrage and damages for detention against the appellant as charterer under a voyage charterparty dated 1 April 1981. I shall call the appellant 'the charterers' and the respondent 'the owners'. The arbitrators, Mr Michael Mabbs and Mr John Potter, awarded a total of US$1,663,865.63 plus interest at 12.5 per cent per annum from 1 March 1982 to the date of the award and costs (including the arbitrators' costs of £880).

3

I will return below, so far as necessary, to the events between the making of the award on 15 June 1983 and 25 January 1993 when, on an ex parte application made by the respondent under section 26 of the Arbitration Act 1950 ("the 1950 Act"), Saville J made an order granting leave to enforce the award in the same manner as a judgment or order, subject to the proviso that the appellant should have 22 days from the service of the order in which to apply to set the order aside. He also ordered that, subject to further order, the order should not be enforced until after the expiry of that period of 22 days. In the event, for reasons set out below, the order was not served before the Civil Procedure Rules came into force and the proceedings were automatically stayed.

4

On 16 February 2001 Moore-Bick J lifted the stay and allowed the owners to serve the order of Saville J but directed that no steps be taken to enforce it without the permission of the court. The order of Moore-Bick J was served on 15 August 2001. The charterers did not apply to set aside the order of Moore-Bick J but applied for an order setting aside either the order or service of the order of Saville J or alternatively for an order staying the proceedings for enforcement of the award. For their part, the owners resisted those applications and applied for permission to enforce the order of Saville J pursuant to the order of Moore-Bick J and to enter judgment pursuant to the order of Saville J. Those applications came before Mr Michael Crane QC, sitting as a Deputy High Court Judge in the Commercial Court. On 10 January 2003 he refused the charterers' applications and granted the owners' application for permission to enforce Saville J's order. He also gave them permission to enter judgment in the total sum of US$4,561,990.08 inclusive of interest. The charterers now appeal against those orders pursuant to permission granted by the judge.

Issues before the Judge

5

The grounds upon which the charterers made their applications before the judge were these:

i) that proceedings to enforce the award had become time barred before the owners made their ex parte application to Saville J or the owners were estopped by a subsequent decision of the Supreme Court of Romania on the same issue; and

ii) that, having made no attempt to serve the order of Saville J until 2001, the attempt to rely upon it was an abuse of the process of the court.

6

If the charterers were to succeed on either of those grounds, the owners' application for permission to enforce the award would fail but, if both the charterers' applications were to fail, it was common ground that the remaining issue for the judge to decide would be whether the owners should be permitted to enforce the award. I will call those three issues the time bar issue, the abuse of process issue and the enforcement issue.

Time Bar

7

The time bar issue itself involved two separate questions and some sub-questions. The first question was whether the owners were estopped by a decision of the Supreme Court of Romania from arguing that proceedings in England to enforce the award were time barred when action was brought in England in January 1993. The judge resolved this issue in favour of the owners and the charterers challenge that decision in this appeal. It raises questions of issue estoppel.

8

The second question was whether the claim was time barred in England at that time as a matter of English law under section 7 of the Limitation Act 1980 ("the 1980 Act"), which provides:

"An action to enforce an award, where the submission is not under seal, shall not be brought after the expiration of six years from the date on which the cause of action accrued."

It was (and remains) common ground that, when an ex parte application for leave to enforce an award was made under section 26 of the 1950 Act, an action was brought for the purposes of section 7 of the 1980 Act. That is because such an application was an alternative to proceeding by way of writ or originating summons.

9

It was also (and also remains) common ground that time runs, not from the date upon which the award is made or published, but from the date when the paying party is in breach of its implied obligation to pay the award: see e.g. Agromet Motoimport Ltd v Maulden Engineering Co (Beds) Ltd [1985] 2 All ER 436. On the facts here that would have occurred, as the judge put it, fairly shortly after the award was published. The period of six years had thus long expired before the proceedings under section 26 of the 1950 Act were commenced in 1993. However, the owners relied upon what they said were part payments and acknowledgments, which they said meant that the claim was not time barred by January 1993 by reason of sections 29(5) and 30 of the Limitation Act 1980. Before the judge there were a number of sub-issues under this head. However, the only one which survives for the purposes of this appeal is whether a telex relied upon by the charterers is an acknowledgment "in writing and signed by the person making it" within the meaning of section 30(1) of the 1980 Act.

10

Logic might suggest that the question of issue estoppel should be considered before that of time bar because, if the charterers succeed on issue estoppel, the appeal succeeds and the question of time bar does not arise. There is, however, some overlap between the two questions because the alleged issue estoppel arises out of what is said to be the decision of the Supreme Court of Romania that the claim was time barred under English law by 27 May 1992, when the proceedings in Romania were commenced. It seems to me that, in order to understand the decision of the Supreme Court on that question and in order to determine whether it gives rise to an issue estoppel, it is or may be important to focus on the questions which are relevant to the issue of time bar. I shall therefore consider first the question whether the owners' claim was indeed time barred under English law by January 1993.

Time Bar under English Law

11

It is first necessary to set out the relevant terms of the 1980 Act and to give a short account of the material events between 1983 and 1993. Sections 29(5) and 30 of the 1980 Act provide, so far as relevant, as follows:

"29(5) Subject to subsection (6) below, where any right of action has accrued to recover –

(a) any debt or other liquidated pecuniary claim; …

and the person liable or accountable for the claim acknowledges the claim or makes any payment in respect of it the right shall be treated as having accrued on and not before the date of acknowledgment or payment.

30(1) To be effective for the purposes of section 29 of this Act, an acknowledgment must be in writing and signed by the person making it.

(2) For the purposes of section 29, any acknowledgment or payment –

(a) may be made by the agent of the person by whom it is required to be made under that section; and

(b) shall be made to the person, or to an agent of the person, whose title or claim is being acknowledged or, as the case may be, in respect of whose claim the payment is being made."

12

Before the judge the owners relied upon two part payments and four acknowledgments. In order to put them in context I should refer briefly to the events after the award was published. At the time of the award the charterers were a Romanian state entity. No attempt was made to challenge the validity of the award but no payment was immediately made under it and in December 1985 the owners arrested a vessel in France. Although that vessel was owned, not by the charterers, but by Navrom, which was another Romanian state entity, the arrest led to a payment of US$851,000 on about 7 January 1986.

13

As the judge explained, that payment was made by an entity called Navlomar to the credit of an account designated by Nicholas G Moundreas Shipping SA ("NGM"). It has been common ground throughout that for present purposes, including section 30(2) of the 1980 Act, NGM was the duly authorised agent of the owners and Navlomar was the duly authorised agent of the charterers. That was the first of the two part payments relied upon by the owners.

14

The second part payment was a further payment of US$78,172.47 (plus £880), which was made on a date which the judge put between March and August 1986 by a Mr Loukedes on behalf of Navlomar to NGM. That sum was the...

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