Integral Petroleum SA v SCU-Finanz AG
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Popplewell |
| Judgment Date | 14 March 2014 |
| Neutral Citation | [2014] EWHC 702 (Comm) |
| Docket Number | 2013 Folio 190 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 14 March 2014 |
[2014] EWHC 702 (Comm)
The Hon. Mr Justice Popplewell
2013 Folio 190
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
7 Rolls Building, Fetter Lane
London, EC4A 1NL
Stephen Cogley QC (instructed by Holman Fenwick Willan LLP) for the Claimant
James Collins QC (instructed by Thomson Webb Corfield) for the Defendant
Hearing dates: 10 & 11 March 2014
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.
Introduction
This is an application by the Defendant ("SCU-Finanz") to set aside a judgment entered in default of service of defence in favour of the Claimant ("Integral") for US$ 1,078,547 plus costs to be assessed. SCU-Finanz contends that the judgment must be set aside as of right pursuant to CPR 13.2; alternatively that the Court ought to exercise its discretion to set aside the judgment pursuant to CPR 13.3 because it has defences with a real prospect of success. Integral contends that CPR 13.2 is not engaged, that SCU-Finanz does not have any defence with a real prospect of success, or alternatively if it has, that the Court ought not to exercise its discretion to set aside the judgment because the application was not brought promptly.
Integral's claim
Integral and SCU-Finanz are both limited liability Swiss companies engaged in oil trading. Integral's claim is as buyer under a supply contract dated 18 October 2011 ("the Supply Contract") under which SCU-Finanz agreed to sell and deliver a quantity identified in clause 4 as :
"INTENTION TO LOAD UP TO 400,000 METRIC TONS PER YEAR (UP TO 40,000 METRIC TONS PER MONTH) TO BE SPECIFIED AS PER SEPARATE ADDENDUM IN SELLER'S OPTION". The product to be supplied was identified in clause 3 as "GASOIL, FUEL OIL, NAPHTHA, GASOLINE, JET, KEROSENE (TO BE SPECIFIED IN THE SEPARATE ADDENDUMS) AS USUALLY PRODUCED BY TURKMENBASHI COMPLEX OF REFINERIES ("THE PRODUCT")". Delivery obligations were identified in Clause 5 as "FOB TURKMENBASHI PORT, FCA TURKMENBASHI, FCA SEIDI (TO BE SPECIFIED IN SEPARATE ADDENDUMS) WITHIN THE PERIOD 01.11.2011 – 31.10.2012 (EXACT PERIOD OF DELIVERY OF EACH LOT TO BE SPECIFIED IN SEPARATE ADDENDUMS) IN MULTIPLE CARGO LOTS IN BUYER'S OPTION". Clause 6 provided: "THE UNIT PRICE IN US DOLLARS PER METRIC TON SHALL BE EQUAL TO THE PURCHASE PRICE FROM TURKMENBASHI COMPLEX OF REFINERIES PLUS USD 17.00 PER METRIC TON (EXACT PURCHASE PRICE FROM TURKMENBASHI COMPLEX OF REFINERIES FOR EACH LOT/CONTRACT TO BE AGREED BY THE SELLER AND THE BUYER AND TO BE SPECIFIED IN THE SEPARATE ADDENDUMS)."
Clause 11 of the Supply Contract provided for English law and the exclusive jurisdiction of the English High Court.
Integral's claim is for failure on the part of SCU-Finanz to deliver any product pursuant to the Supply Contract. The evidence before me as to what happened during the currency of the contract was extremely sparse, but it appears that there was never any agreement on any of the matters which required to be specified in addenda for the purposes of clause 3 (identifying the product), clause 4 (identifying lifting quantities) clause 5 (identifying the place of loading and delivery dates) or clause 6 (identifying refinery prices on which the contractual prices were based).
Procedural Chronology
On 11 February 2013 Integral issued its claim form. The claim form and response pack was served on 21 March 2013 on SCU-Finanz at its registered address in Switzerland by the Swiss courts via the Foreign Process Section of the High Court, pursuant to CPR Rule 6.33(1)(b)(iii). The Response pack included a draft form of acknowledgement of service in which the standard form had been altered in manuscript so as to provide that, in the event that an acknowledgement of service was entered but no defence filed, judgment might be entered within 36 days of the date of service of the particulars of claim. This was an error. The relevant period in the Commercial Court is 28 days by virtue of CPR 58.10(2).
SCU-Finanz filed an acknowledgement of service which was received by the Court and Integral on 15 April 2013. The acknowledgement of service indicated an intention to defend and intention to contest jurisdiction (although no application was subsequently made pursuant to Part 11 within the 28 days allowed). In the box designated for identifying the business address of the Defendant's solicitor or European Lawyer or the Defendant's own business address, the acknowledgement of service identified Me Errol Cohen and gave a postal address in Paris. The box in which there could be provided a telephone number, fax number, DX number and e-mail address were left blank.
The matter was being dealt with on behalf of Integral by Mr Parish, a partner of Holman Fenwick Willan LLP ("HFW") and his assistant Ms Hodson. They surmised that the reference to "Me" Errol Cohen indicated that he was a "Maitre" and therefore a French Avocat. Having made the necessary enquiries they identified that that was so and that his e-mail address was emc@errollcohen. com.
On 14 May 2013 Ms Hodson sent an e-mail to Maitre Cohen at that e-mail address stating that their client had suddenly and unexpectedly been taken ill and therefore there would be a delay in serving the Particulars of Claim. Time for service (28 days from acknowledgement of service: CPR 58.5) had in fact already expired the previous day. The e-mail asked for agreement to an extension up to close of business on 6 June 2013. Following a chasing e-mail on 21 May 2013 Maitre Cohen responded by e-mail later that day confirming approval to the extension sought.
Although the e-mail requesting an extension had referred to the fact that the parties were permitted to agree up to a maximum of 28 days and had referred to the extension sought to close of business on 6 June 2013 as the full extension, there had been a miscalculation: 28 days would in fact have permitted an extension to 10 June 2013. Nevertheless the extension which was in fact sought and in fact agreed was to 6 June 2013. This is reflected in a letter sent by HFW to the Court dated 27 May 2013 confirming that an extension up to 6 June had been agreed.
Prior to sending that letter, Miss Hodson had noticed the error in calculating the 28 days. On 22 May 2013 she sent an e-mail to Maitre Cohen explaining that 28 days would in fact run to 10 June 2013, not 6 June 2013, and seeking agreement to the revised deadline of 10 June 2013. There was no response to that e-mail.
The Particulars of Claim were sent by e-mail on 10 June 2013 at 1841 to Maitre Cohen at the e-mail address identified above, from which he had corresponded, by way of purported service. Since they were sent after 4.30 pm, under CPR 6.26 the time of service would be deemed to be the following day, 11 June 2013. SCU-Finanz challenge the validity of service on the grounds that e-mail was not a permitted method of service and that in any event service was 5 days out of time.
If that constituted service of the Particulars of Claim, the 28 day period for service of a defence expired on 9 July 2013. No defence having been served, Integral filed with the Court an application for judgment in default on 17 July 2013. In doing so it filed a certificate in purported compliance with CPR 6.17(2) signed by Mr Parish certifying that the Particulars of Claim had been served in accordance with the rules. Judgment in default was entered for US$ 1,078,547 the same day.
On 13 September 2013 SCU-Finanz became aware of the judgment in default.
On 6 December 2013 English solicitors, Thomson Webb and Corfield, wrote on behalf of SCU-Finanz to HFW setting out various alleged defences and seeking Integral's consent to the default judgment being set aside. Such consent was not forthcoming, and accordingly this application to set aside the judgment was prepared and filed on 24 December 2013, although it was not issued in the court office until 30 December 2013.
The application under CPR 13.2
CPR 13.2 provides that the Court must set aside a judgment entered in default of a defence under Part12 if judgment is wrongly entered because any of the conditions in CPR 12.3(2) was not satisfied. Under CPR 12.3(2), judgment in default of defence may only be obtained if the time for filing a defence has expired. Under CPR 15.4(1)(a) and CPR 58.10(2), the period for filing a defence is 28 days after service of the particulars of claim. The critical question is therefore whether sending the Particulars of Claim by e-mail to Maitre Cohen constituted or should be deemed to constitute "service of the particulars of claim" so as to start time running for service of the defence.
CPR 6.20 governs the method of service of documents other than the Claim Form (where permission to serve the Claim Form out of the jurisdiction is not required; where it is, the governing provision for other documents is CPR 6.38). CPR 6.20(d) provides that "a document may be served….. by fax or other means of electronic communication in accordance with Practice Direction 6A." CPR 6.23 provides that a defendant must provide an address for service, which must be within the UK, subject to limited exceptions. One such exception provided for by CPR 6.23(2)(b) is the nomination of a business address within an EEA State of a European Lawyer nominated to accept service of documents. CPR 6.23(4) permits service by the document being "sent or transmitted to or left at" that address (or personal service or another method specifically ordered by the Court). CPR 6.23(6) provides:
"Where a party indicates in...
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