The Former Owners of the Motor Vessel "melissa K" Now Named "jasmine I" v The Former Owners of the Motor Tanker "tomsk" Subsequently Named "pure Energy" and Now Named "thayer"
| Jurisdiction | England & Wales |
| Judge | Mr Justice Males |
| Judgment Date | 27 November 2015 |
| Neutral Citation | [2015] EWHC 3445 (Admlty) |
| Date | 27 November 2015 |
| Court | Queen's Bench Division (Admiralty) |
| Docket Number | Case No: AD-2015-000056 |
[2015] EWHC 3445 (Admlty)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Males
Case No: AD-2015-000056
Miss Vasanti Selvaratnam QC and Mr Ravi Aswani (instructed by Campbell Johnston Clark) for the Claimants
Mr Richard Sarll (instructed by Keates Ferris) for the Defendants
Hearing date: 18 th November 2015
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
1. The principal issue on these applications is whether liability for a maritime collision has been compromised by the claimants' acceptance of the defendants' offer to settle liability on the basis that each party was 50% to blame, leaving quantum now to be determined. In outline, the claimants say that it has been so compromised because, despite the expiry of an agreed extension for the issue and service of a claim form, the defendants' offer remained open for acceptance. The defendants say that it has not because the offer only remained open for acceptance if proceedings had been issued and served before expiry of the extension and, as this did not happen, the offer lapsed and no valid service of proceedings has been or could now be effected.
The facts
The collision
2. Although both vessels have since been sold and changed their names, on 18 April 2012 the claimants' vessel was called "MELISSA K" and was registered in Panama while the defendants' vessel was called "TOMSK" and was registered in Liberia. On that date the two vessels collided in fog in the entrance to the port of Tuapse in the Black Sea as "TOMSK" was entering the port and "MELISSA K" was departing. Both vessels were damaged, although it appears that "MELISSA K" came off worse.
3. "MELISSA K" was repaired immediately after the collision at a cost of approximately US $370,000. Together with a claim for loss of income during the period of repairs, the collision gives rise to a claim by the claimants of about US $800,000 exclusive of interest and costs. "TOMSK" was repaired at her next scheduled docking in May and June 2012 at a cost of approximately US $28,000. There is (now, at any rate) no claim for loss of income, although such a claim was foreshadowed at an earlier stage.
Security
4. On the day after the collision, on 29 April 2012, the North of England P&I club, in which "TOMSK" was entered, provided security to the claimants in the form of a Letter of Undertaking. In consideration of the claimants' agreement to refrain from arresting the "TOMSK", the North of England undertook to pay on demand such sums as might be due from the defendants either by agreement between the parties or by a final unappealable judgment of the English court, up to a maximum liability of US $720,000, inclusive of interest and costs.
5. The claimants' P&I insurers were RaetsMarine Insurance B.V. of Rotterdam. On 2 May 2012, RaetsMarine provided security to the defendants, also in the form of a Letter of Undertaking. This too was in consideration of the defendants' agreement to refrain from arresting the "MELISSA K", and was stated to respond to the parties' agreement, a final unappealable arbitration award (although there is no arbitration agreement between the parties), or a final unappealable judgment of the English court. The maximum liability under this Letter of Undertaking was US $200,000.
6. The position, therefore, was that each party had been provided with security (although if their claim is valid in the full sum now claimed, the claimants appear to be under secured); each party had agreed not to arrest the other's vessel; and it was contemplated that any litigation of the claims would be in England. In accordance with section 190(3) of the Merchant Shipping Act 1995 and in the absence of any extension under section 190( 5) or (6) or by agreement, proceedings had to be brought (i.e. issued) within two years from the date of the collision — that is, by 28 April 2014. In the event of proceedings in rem, the claimant would then have a further 12 months after the date of issue within which to serve the claim form: CPR 61.3(5).
The First Extension Agreement and the Collision Jurisdiction Agreement
7. On 23 April 2014, shortly before the expiry of the two year limitation period, a mutual extension of time (i.e. for the commencement of proceedings) up to and including 28 October 2014 was agreed between the North of England and the claimants' Turkish lawyers, Dogu Law Office of Istanbul. I infer that although the claimants are a Panamanian company, the "MELISSA K" interests were Turkish.
8. One of the terms of this First Extension Agreement was that a Collision Jurisdiction Agreement be concluded. Accordingly on 25 April 2014 the parties signed a standard form ASG2 Collision Jurisdiction Agreement providing that each party's claim would "be determined exclusively by the English Courts in accordance with English law and practice". It provided also that:
"The undersigned confirm that, within 14 days of receiving a request to do so, they will instruct solicitors in England or Wales to accept service of the other party's proceedings (including any limitation proceedings) on behalf of their respective clients/principals. …"
9. Accordingly it was possible for either party to serve proceedings on the other by making a request for solicitors to be instructed to accept service. Either party could then be confident that proceedings could be served within 14 days.
The Second Extension Agreement
10. On 22 October 2014 Dogu Law Office wrote to the North of England requesting a further time extension. The North of England responded that:
"We have recommended to our Members that they agree a mutual time extension to 28 April 2015 for issue and service of the respective claim forms and we will keep you informed of their reply …"
11. On 24 October 2014 the North of England wrote again, stating:
"Pursuant to the Collision Jurisdiction Agreement dated 25 th April 2014 and subject only to like agreement on behalf of Owners of 'Melissa K' we hereby agree to a mutual extension of time up to and including 28 April 2015 for issue and service of each ship's claim form upon the other.
Please kindly confirm agreement on behalf of Owners of 'Melissa K'."
12. On the same day, Dogu Law Office provided this confirmation:
"Thanks for this confirmation and I am pleased to confirm that the agreed time extension is now in force."
13. This Second Extension Agreement introduced for the first time a deadline for service of any claim form as well as issue. It constituted an agreed abridgment of the time for service pursuant to CPR 2.11. It is the claimants' case that this was an unusual feature of such agreements but, be that as it may, the terms of the agreement were perfectly clear: in order for service to be valid, any claim form had to be not only issued but also served before the deadline of 28 April 2015.
The defendants' offer to settle liability
14. On 26 March 2015 the North of England sent to RaetsMarine and Dogu Law Office a letter containing a pre-action offer to settle liability which was expressed to be made "in accordance with CPR Part 61.4(10) – (12) and/or Part 36". I shall refer to it as "the Offer". It stated:
"We are instructed by our Members, owners of Tomsk, to settle liability on the basis of Tomsk being 50% and Melissa K being 50% to blame for the collision.
The costs of determining liability are to be payable in the same proportion.
This offer will remain open for acceptance for 21 (twenty one) days following receipt of this letter. On the expiry of that period, unless the Court orders otherwise, the offer will remain open for acceptance on the same terms except that, in addition, your clients shall pay all of our Members' costs from the date of expiry until acceptance.
For the avoidance of doubt, after commencement of trial this offer can only be accepted with the permission of the Court in accordance with Civil Procedure Rules ('CPR') Part 61.4(12)(d) and/or as provided under rule 36.9(3)(d) of the CPR."
15. The Offer was sent under cover of an email which stated:
" Liability
'Tomsk' has proposed liability at 50/50 and 'Melissa K' has proposed liability at 85/15 in their favour. We have reviewed the evidence and argument carefully and, for the following reasons, we believe that the Admiralty Court, London will itself decide that 50/50 is the correct apportionment.
…
We attach a pre-action Part 61/Part 36 offer of liability alone at 50/50 in the form prescribed by Civil Procedure Rules. …
We are also instructed to advise you that unless this offer is accepted, no further time-extensions will be granted. If this offer is accepted before expiration of the present time-extension on 28 th April 2015 then we are instructed to agree a mutual three-month time extension until 28 th July 2015 during which time the parties can address the quantum of each claim.
If the offer on liability is accepted, we will seek instructions to travel to Istanbul to negotiate quantum in good faith and without delay."
16. The email therefore made clear that the deadline of 28 April 2015 for issue and service of proceedings was a final deadline which would not be extended...
To continue reading
Request your trial