Premier Cruises Ltd v DLA Piper Rus Ltd
| Jurisdiction | England & Wales |
| Judge | David Edwards |
| Judgment Date | 01 February 2021 |
| Neutral Citation | [2021] EWHC 151 (Comm) |
| Date | 01 February 2021 |
| Docket Number | Case No: CL-2020-000049 |
| Court | Queen's Bench Division (Commercial Court) |
[2021] EWHC 151 (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
David Edwards, QC (SITTING AS A JUDGE OF THE HIGH COURT)
Case No: CL-2020-000049
Philippa Hopkins, QC and John Robb (instructed by Tatham & Co) for the Claimant/Respondent
George Spalton and Joshua Folkard (instructed by Bryan Cave Leighton Paisner LLP) for the Defendants/Applicants
Hearing dates: 24–25 November 2020
Approved Judgment
David Edwards QC SITTING AS A JUDGE OF THE HIGH COURT
David Edwards QC:
Introduction
The Claimant in these proceedings is Premier Cruises Limited (“PCL”), a company originally domiciled in the British Virgin Islands and now domiciled in the Seychelles, which owns or operates two vessels: a river cruise vessel, the MS “Volga Dream”, and an ocean-going cruise vessel, the MS “Serenissima.”
The Defendants are entities within the DLA Piper Group of legal practices. The First Defendant is DLA Piper Rus Limited (“DLA Russia”), an English company with operations in Russia. The Second Defendant is DLA Piper UK LLP (“DLA UK”), an English LLP. Where it is not necessary to distinguish between them, I will refer to the Defendants together as “DLA”.
On 29 January 2020 PCL commenced proceedings against DLA in the Commercial Court claiming damages in contract and/or in tort for professional negligence. The nature of, and the factual basis for, the claims and allegations made against DLA, set out in the Particulars of Claim, is explained in the paragraphs below.
DLA filed an Acknowledgement of Service on 25 February 2020 indicating that it intended to contest the jurisdiction of this court. On 14 April 2020 DLA issued an Application Notice applying for an order that the proceedings against both Defendants should be stayed pursuant to section 9 of the Arbitration Act 1996 (“the 1996 Act”) and CPR Rule 11(1)(a) on the grounds that:
“1. By the engagement letter signed by the Claimant and dated 26 May 2015, the Claimant and the First Defendant agreed that in the event that any dispute could not be settled through negotiation, the matter shall be resolved under arbitration, under the rules of the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (‘the Arbitration Agreement’). The Arbitration Agreement is set out in full in the attached evidence. It encompasses all matters which are the subject of these proceedings, including on the basis that the Second Defendant was agent of, or sub-contractor to, the First Defendant in respect of the matters which are the subject of the claim”.
DLA UK subsequently accepted that, as it was not itself party to the arbitration agreement relied upon, there was no basis upon which the court could stay the proceedings against it under section 9 of the 1996 Act. DLA UK's application, it was explained, was for a stay of the English proceedings on case management grounds.
PCL, through its solicitors, Tatham & Co (“Tatham”), sensibly indicated in a letter dated 2 July 2020 that, although it disputed that such a stay should be granted, it did not require the application for a case management stay to be the subject of a further application notice.
Factual Background
The facts, insofar as they are relevant to the present application, are largely common ground.
(i) The Shipbuilding Contract
On 21 June 2013 PCL entered into a contract (“the Shipbuilding Contract”) with a Croatian shipyard, Brodosplit d.d. (“the Shipyard”), for the construction and purchase of a passenger vessel that was given the provisional name “Volga Dream II” (“the Vessel”).
The purchase price for the Vessel was €20,000,000, which was payable in staged instalments in the usual way. The Delivery Date, set out in clause X of the Shipbuilding Contract, was 15 March 2015. Clause XVII provided that the Shipbuilding Contract was governed by English law with any disputes between the parties to be resolved by London arbitration.
(ii) Early communications with DLA Russia
At some point in late 2013 or early 2014 – the precise date is irrelevant for present purposes – Philip Lamzin, at the time a Legal Director of DLA Russia, met Dmitry Esakov, the son of Vladimir Esakov, who was the principal representative of PCL. Dmitry Esakov asked Mr Lamzin for help in finding financing for the Vessel.
On 10 September 2014 Mr Lamzin sent PCL a “Know Your Customer” request in anticipation of PCL engaging DLA Russia to carry out tax and restructuring work. There was apparently some discussion of precisely which company would engage DLA Russia, but in the event the potential engagement of DLA Russia in relation to tax and restructuring matters came to nothing.
Mr Lamzin says in paragraph 19 of his first witness statement that PCL chose not to proceed with instructing DLA Russia at that point in time and that he did not hear from PCL again until December 2014.
(iii) December 2014 – May 2015
In the second half of 2014 the relationship between PCL and the Shipyard deteriorated when the Shipyard began to seek extensions of the Delivery Date for what it contended was permissible delay.
Between December 2014 and May 2015 there were a number of communications between Mr Lamzin and Vladimir Esakov in relation to PCL's position under the Shipbuilding Contract.
The full nature and extent of these communications, and whether PCL was entitled to rely upon what Mr Lamzin did and said, is not a matter that I need to decide for the purposes of the present application. It is common ground, however, (or, insofar as it is not, I find) that at least the following communications took place:
i) On 16 December 2014 Vladimir Esakov sent an email to Mr Lamzin indicating that he would send Mr Lamzin copies of letters exchanged between PCL and the Shipyard. Mr Lamzin responded saying that he would revert with any comments or questions;
ii) On 23 December 2014 Mr Lamzin sent an email to Vladimir Esakov in which Mr Lamzin explained that:
“I have studied carefully the [Shipbuilding Contract] and forwarded correspondence. I enclose my comments below.”
The email went on to make a number of remarks about the Shipyard's claims, the parties' respective rights under clause XII(2) of the Shipbuilding Contract, and the information and documents that Mr Lamzin needed to assess PCL's position;
iii) On 24 December 2014 Mr Lamzin sent an email to Vladimir Esakov attaching a draft letter to be sent by PCL to the Shipyard rejecting its claim for permissible delay. A further draft letter, in response to subsequent correspondence from the Shipyard, was sent by Mr Lamzin to Vladimir Esakov on 16 January 2015;
iv) On 25 March 2015 Mr Lamzin sent an email to Vladimir and Dmitry Esakov attaching a further draft letter and setting out his thoughts on the termination provisions in the Shipbuilding Contract. The email referred to two provisions, clauses XI.A(b) and XII, which Mr Lamzin suggested were somewhat contradictory. It concluded:
“Accordingly,
a) the Yard can dispute the point at which the Buyer's right to cancel the contract arose (and expired) if it proves that the Buyer knew about this at an earlier point. To be on the safe side, we need to double-check whether the Yard expressly communicated a time frame for the delay. If not, we will treat their reply to our attached letter as such a notice.
b) I would recommend seeking further advice from our English colleagues as concerns how to interpret the conflict between the two clauses of the contract. If we are to take the more cautious position, it would be advisable to send them formal notice of cancellation on the earlier date (when we formally learned of the delay in delivery). Do let me know if, at this stage, it is worth bringing in London to ask them for comment.”
v) On 19 April 2015 Mr Lamzin sent an email to Vladimir Esakov attaching a draft letter to be sent by PCL in response to a notification from the Shipyard that it intended to deliver the Vessel on 4 August 2015. The draft was headed “Warning Letter”. It said that:
a) The Shipyard was in breach in failing to deliver the Vessel by 30 March 2015 (taking account of 15 days admitted permissible delay);
b) PCL was willing to accept a new Delivery Date of 4 August 2015, but only on certain conditions, including an acceptance that neither party had any claim against the other in connection with the delay;
c) If those conditions were not accepted by the Shipyard, then PCL would have no choice other than to initiate termination of the Shipbuilding Contract and to demand the refund of the purchase price plus damages for breach of contract.
A letter in these terms was duly sent by PCL to the Shipyard on 20 April 2015;
vi) On 28 April 2015, following a response from the Shipyard, Mr Lamzin sent an email to Vladimir Esakov attaching a draft letter. The draft, headed “Notice of Rescission”, purported to rescind the Shipbuilding Contract with immediate effect under clause XII.4 and demanded the repayment of that part of the purchase price that had already been paid.
On 29 April 2015 PCL sent a Notice of Rescission to the Shipyard in the terms of the draft provided by Mr Lamzin referred to in paragraph 15 vi) above. The Shipyard responded on 21 May 2015 alleging, inter alia, that:
i) PCL did not have a contractual right to terminate the Shipbuilding Contract; and
ii) PCL had failed to pay the fifth instalment of the purchase price...
To continue reading
Request your trial
-
Republic of Mozambique (acting through its Attorney General) v Credit Suisse International and Others
...Fiona Trust & Holding Corp v Privalov [2007] UKHL 40; [2007] 2 CLC 553; [2007] 4 All ER 951. Premier Cruises Ltd v DLA Piper Rus Ltd [2021] EWHC 151 (Comm). Sodzawiczny v Ruhan [2018] EWHC 1908 (Comm); [2018] 2 CLC 455. Tomolugen Holdings Ltd v Silicia Investors Ltd [2015] SGCA 57. Duncan M......