IMS SA & Ors v Capital Oil And Gas Industries Ltd [2016] EWHC 1956 (Comm)

2016] EWHC 1956 (Comm)Case No CL-2015-000082
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 28 July 2016
Before
THE HON. MR JUSTICE POPPLEWELL
Between
(1) IMS S.A.Claimants(2) ROFOS NAVIGATION LIMITEDClaimant(3) XIFIAS NAVIGATION LIMITEDClaimant(4) HELI NAVIGATION LIMITEDClaimant(5) TUTBURY NAVIGATION LIMITEDClaimantCAPITAL OIL AND GAS INDUSTRIES LIMITEDDefendant
Mr J Kenny QC (instructed by Waterson Hicks) for ClaimantsMr J Cutress (instructed by Ascendo Consulting Ltd) for DefendantHearing Hearing date: 15 July 2016
Judgment ApprovedThe Hon. Mr Justice Popplewell :Introduction
[1]The Second to Fifth Claimants (“the Owners”) are Liberian one ship companies which at the material time owned the vessels “ROFOS”, “XIFIAS”, “HELI”, and “PANTHER” respectively. The First Claimant (“IMS”) is a Liberian company which manages the Owners from an office in Piraeus, Greece. The Defendant (“Capital”) is a company registered in Nigeria which carries on business in Nigeria as an importer of oil cargoes.[2]There are two applications before the Court:(1) Capital’s application dated 8 April 2016 challenging jurisdiction on forum non conveniens grounds;(2) the Claimants’ application dated 6 May 2016 for summary judgment under part 24 of the Civil Procedure Rules.[3]The claim in these proceedings is for US$5.8m, being the outstanding balance of US$6 million payable in accordance with the terms of a document entitled “Confidential Deed of Settlement” bearing the date 23 January 2013 (“the Settlement Deed”). The Claimants’ case is that the Settlement Deed was executed on 24 January 2013 on behalf of all parties. Capital’s case is that the document was not executed by or on behalf of the Claimants and is not binding. This dispute is at the heart of both of the applications.

Narrative

[4]The Owners entered into four time charters with Capital dated respectively 21 July 2011, 2 August 2011, 9 August 2011 and 21 October 2011. Pursuant to the charterparties the Owners issued bills of lading in respect of six cargoes loaded on board the vessels in accordance with Capital’s directions as charterers. The Owners gave delivery of each of these six cargoes without production of original bills of lading. It is the Owners’ case that they did so against letters of indemnity (“LOIs”) given for and on behalf of Capital, one for each shipment and each in identical terms. Capital disputes the authenticity or enforceability of the LOIs.[5]In October 2012 Access Bank PLC, a Nigerian Bank with whom it appears that Capital had a banking relationship, arrested three of the vessels. The “PANTHER” was arrested at Durban on 22 October 2012. The “XIFIAS” and “HELI” were arrested at Lagos on 24 October 2012. The arrests were to secure the bank’s claims for alleged misdelivery of the cargoes, of which the Bank claimed to be the lawful owner. It is the Claimants’ case that under the LOIs Capital was obliged to arrange security to release the vessels; that as a result of the arrests the Owners suffered substantial loss and damage; that in the case of the owners of the three arrested vessels the losses arose from their detention; and that the Second Claimant, the owner of the “ROFOS” which was not arrested, suffered loss by being obliged to sell the vessel in order to avoid the likelihood of that vessel also being arrested.[6]In the same month, October 2012, Access Bank commenced proceedings in the Commercial Court in London against the Owners and Capital and Mr Ubah. Mr Ubah’s business card describes him as the CEO/Managing director of Capital at an address in Nigeria. Mr Ubah was the signatory of the LOIs whose validity or authenticity was in dispute.[7]It was against that background that in January 2013 the Settlement Deed was drawn up and signed on behalf of Capital. The copy of the Settlement Deed before the Court bears a manuscript date on its cover sheet of 23 January 2013. It is expressed to be an agreement between IMS, the Owners (together with another company), and Capital. Clause 1 provides that Capital was to pay US$6 million “by no later than 30 days from the execution of this Agreement (January 24, 2013)” to IMS as manager of the owning companies “in full and final settlement for all losses, dues and payments made by IMS as a result of the arrest and detention of their vessels consequent upon the suit commenced against her in London by Access Bank PLC.” Clause 2 provides that the US$6 million was to be paid in instalments “payable no later than February 24, 2013”. Clause 3 provides for a full and final settlement and release in broad terms. The release is expressed to take effect “Upon the signing of this agreement and payment in full of all sums due and payable by Capital pursuant to this Deed”. Clause 8 provides for English law and exclusive English jurisdiction. Clause 9 warranted on both sides that the representative signing the Deed was fully authorised to do so.[8]The copy of the Settlement Deed before the Court was put in evidence by Capital. It is not clear whether that is a copy of the Deed as received from the Claimants or its own copy (a matter of potential significance as will become apparent from the rival contentions about whether or how it was executed). It bears the signature of Mr Ubah on behalf of Capital, witnessed by Mr Holloway who gives an address in London NW11. Mr Holloway describes himself in his witness statements as “In-House solicitor (Off Shore Matters)” of Capital and his address as c/o Ascendo Consulting Ltd at 63, Grosvenor Street, Mayfair. He is a qualified English solicitor authorised to practice by the SRA. He is based in London. There is no signature in the place designated for IMS. The document ends with the names of the owning companies against which, curiously, there are what appear to be Mr Ubah’s initials and his name in manuscript. I shall return to consider the disputed evidence as to whether it was executed by and on behalf of the Claimants. It is convenient first to complete the relevant history of events.[9]No part of the US$6 million was paid by 24 February 2013 or over the next two years.[10]By a consent order dated 1 July 2014 Access Bank’s claims against the Owners were discontinued and its claims against Capital and Mr Ubah were stayed on terms. Notwithstanding the stay, on 4 November 2014 the Owners issued a Part 20 claim against Capital in the Access Bank proceedings, claiming US$6m under the Settlement Deed. On 29 December 2014 Capital issued an application challenging jurisdiction in relation to the part 20 claim.[11]On 6 March 2015 the Claimants issued the Claim Form in the present action, claiming US$6m under the Settlement Deed. It was not served at that time. On 19 March 2015 the Owners and Capital entered into a settlement agreement (“the 2015 Settlement Agreement”) compromising the Part 20 proceedings in the Access Bank action. IMS was not a party to the 2015 Settlement Agreement, not having been party to the Part 20 claim. The recitals referred to the Settlement Deed as “a Settlement Agreement dated 24 January 2013”. The 2015 Settlement Agreement provided that Capital should forthwith make a without prejudice payment of US$200,000 to the Owners “without making any admission as to either parties’ rights”, upon payment of which Owners would discontinue the Part 20 claim. It went on to provide that there should be a meeting between principals in Europe “at which the parties shall seek to resolve the amounts payable (if any) pursuant to the Settlement Agreement [a reference to the Settlement Deed] and the arrangements for the payment of such amount subject to the provisions of paragraph 4. Paragraph 4 contained a reservation of all rights and claims and stated that the agreement was being entered into in good faith as a step towards amicable resolution of any and all claims. Paragraph 5 provided:
“Capital hereby confirms that Deji Holloway, in-house solicitor of Capital, without prejudice to the rights of Capital on jurisdiction, such rights being fully reserved, has been irrevocably instructed to accept service in London at Lower Ground Floor, 63 Grosvenor Street, Mayfair London W1K 3JG ….of any further proceedings issued by the Owners to enforce the Settlement Agreement dated 24 January 2013 or any subsequent agreement….”
[12]Capital paid the US$200,000 pursuant to the 2015 Settlement Agreement but no further resolution of the dispute took place. The Claimants prepared Particulars of Claim, giving credit for the US$200,000 paid and claiming the balance of US$5,800,000. Relying on clause 5 of the 2015 Settlement Agreement, the Claimants served the Claim Form and Particulars of Claim on 2 July 2015 by delivering them by courier to Mr Holloway’s business address at 63 Grosvenor Street, Mayfair.[13]On 27 July 2015 Capital filed an acknowledgment of service stating its intention to contest jurisdiction. On 13 October 2015 it issued such an application, seeking an order that “(1) The Court has no jurisdiction to hear this claim. (2) The form was not validly served on the Defendants and the service of the claim form is accordingly set aside. (3) The Claimants pay the Defendant’s costs”. I shall refer to this as the first jurisdiction challenge.[14]In Mr Holloway’s first witness statement, dated 13 October 2015 in support of the first jurisdiction challenge, he said that the relief sought was a declaration that service of the Claim Form on Capital was not valid. He identified the grounds of challenge as being that the claim was made under the Settlement Deed, not the 2015 Settlement Agreement and accordingly the service provisions of the 2015 Settlement Deed were inapplicable; and that accordingly the purported service of the Claim Form was ineffective. There was no ground advanced that jurisdiction should be declined on grounds of forum non conveniens.[15]On 2 December 2015 the Claimants issued an application for an order that service on Mr Holloway constituted good and effective service; or that those steps be retrospectively validated as constituting good service by an alternative method and/or that relief be granted under CPR Rule 3.10 and/or that service be dispensed with. In Mr Hicks’ first witness statement on behalf of the Claimants, dated 4 December 2015, he described the Defendant’s application issued on 13 October 2015 as “for an order that service of the claim form on the defendant was invalid”.[16]The hearing of both applications took place before Blair J on 26 February 2016. The skeleton arguments on both sides described the issue as being whether there had been valid service. At the hearing Capital argued that because the Claim Form contained a claim made by IMS, who was not party to the 2015 Settlement Agreement, the purported service was altogether invalid on behalf of any of the Claimants. The Claimants, on the other hand, argued as their primary position that service of the Claim Form on Mr Holloway was valid service of the claim by all five Claimants; but alternatively and as a fallback, that service of the Claim Form on Mr Holloway was at least valid service of the claims made by the Owners pursuant to clause 5 of the 2015 Settlement Agreement. Blair J accepted the fallback argument. He also accepted the Claimants’ submissions that as IMS could always be joined as an additional Claimant to the proceedings validly brought by the Owners under CPR 19.3, which IMS orally applied for at the hearing, the Court could exercise its discretion under CPR Rule 3.10 to validate service of IMS’ claim. However Capital submitted that it might wish to strike out the claim by the Owners on the grounds that the only rights which could arise under the Settlement Deed were in favour of IMS, not the Owners, in which case CPR 19.3 would not apply and there would be no basis for validating service by IMS as a co-claimant to the Owners’ claims. To allow for this possibility, Blair J made an order provisionally exercising the discretion to validate service on Capital of IMS’ claim, but allowing for the eventuality of Capital making a strike out application if so advised. This was given effect to in the following terms of the[17]The Claimants complied with paragraph 3 and on 11 March 2016 Capital served a further acknowledgment of service as directed by paragraph 4 of Blair J’s order. The acknowledgment of service ticked the box stating an intention to contest jurisdiction.[18]Capital did not issue an application to strike out the Owner’s claims by 18 March 2016 as permitted by paragraph 5 of the Order. Accordingly on that date, in accordance with paragraphs 6 and 7 of the[19]On 8 April 2016, 20 days later, Capital issued its application notice making the further jurisdictional challenge which is before the Court today. The application notice seeks “a declaration that(i) the Court has no jurisdiction to grant the relief sought by the Claimants; and/or(ii) that it should not exercise jurisdiction to grant the relief sought”. Only the second aspect has been pursued.[20]The application was supported by the first witness statement of Mr Usoro who describes himself as Capital’s Head of Trading and Business Development in Lagos. The grounds for challenging jurisdiction advanced were that the Claimants had no arguable case because full consideration had been paid to the Claimants for the underlying transactions and “there was no intention to create an obligation on Capital to pay the Claimants US$6,000,000”. There followed an account which averred that:(1) the LOIs were invalid; and(2) all sums due under the previous transactions between the parties had been paid in full; and(3) the Settlement Deed document dated 13 January 2013 had been drawn up in the context of talks about expanding cooperation between the parties including plans to purchase vessels and manage them jointly. The US$6 million represented inflows from anticipated business in the future and was not intended to represent a payment obligation in relation to the previous dealing between the parties. It had been drawn up for IMS to show to its bank because IMS said it was experiencing problems with the bank threatening to sell the houses of Captain Gialozoglou, IMS’ CEO. It was for that reason that the deed was unexecuted. In other words the Settlement Deed was a sham, designed to deceive IMS’ bank.[21]The grounds put forward by Mr Cutress in argument in support of the application are not that the claim is unarguable but that Nigeria is clearly a more appropriate forum for resolution of the dispute.[22]In response, the Claimants issued their summary judgment application on 6 May 2016 and served Mr Hick’s third witness statement. In that statement he explained that the Settlement Deed was executed in two counterparts, one of which was signed on behalf of all the Claimants and the other on behalf of Capital. On the Claimants’ behalf it was signed by Captain George Gialozoglou as attorney-in-fact for IMS, who had been so appointed under a power of attorney dated 15 January 2013. It was signed on behalf of Capital by Mr Ubah whose signature was witnessed by Mr Holloway. The signed counterparts were exchanged. The Claimants did not therefore have the counterpart signed by themselves because it had been provided to Capital and they had not taken a copy. All this took place on 24 January 2013 at the offices of Capital’s Nigerian lawyers. The document had been drafted at the meeting, differing considerably from an earlier draft which Mr Hicks had prepared and sent to his clients the previous day, 23 January.[23]In Mr Usoro’s second witness statement in response, he took issue with Mr Hicks’ account of the signing of the Settlement Deed. There had been no counterparts, and the document was only signed by Mr Ubah; it was not signed on behalf of the Claimants for the reasons set out in his first witness statement. Moreover there had been no meeting on 24 January. There were meetings on 23 January, initially at the Radisson Blu Hotel, Victoria Island, at which the document was drafted and then at the offices of named Nigerian lawyers where the document was printed and signed by Mr Ubah, witnessed by Mr Holloway, and dated on its front sheet with the date it bears, 23 January. Captain Gialozoglou then left for Greece and was not in Nigeria on 24 January.

The Issues

[24]On behalf of Capital, Mr Cutress submits that:(1) the Court should not exercise its jurisdiction because the Nigerian Court is clearly the natural forum for the dispute, and Capital has the better of the argument that the jurisdiction clause relied on in the Settlement Deed is inapplicable because the Settlement Deed was not executed; alternatively(2) if the jurisdiction application fails, the Court should not hear the summary judgment application before Capital is afforded the opportunity to consider whether to allow judgment to go by default or contest the claim on its merits, and if the latter to put in further evidence; alternatively(3) if the Court hears the summary judgment application it should dismiss it because there is an arguable defence that the Settlement Deed was not executed.[25]On behalf of the Claimants, Mr Kenny QC submits that:(1) the jurisdiction application should be dismissed for each of two procedural reasons: i. the effect of Blair J’s Order and the further acknowledgment of service by Capital on 11 March 2016 is that Capital is treated as having accepted that the Court has jurisdiction to try the claim by reason of CPR Rule 11(7)(b) and 11(8); and the application is out of time under Rule 11(4)(a); ii. the application is an abuse of process, raising grounds which could and should have been advanced as part of the first jurisdiction challenge;(2) alternatively the jurisdiction application should be dismissed on its merits because: i. the Claimants have the better of the argument that the Settlement Deed, containing an exclusive English jurisdiction clause, is a relevant agreement on jurisdiction falling within Article 25 of the recast Brussels 1 Regulation; accordingly the Court is bound to give effect to the clause; ii. alternatively, Nigeria is not clearly the more appropriate forum for resolution of the dispute;(3) summary judgment should be granted because Capital has no defence with a real prospect of success. The jurisdiction application Procedural points

The jurisdiction application

[26]Mr Kenny put his argument on abuse of process on the grounds that the present application was a second application for the same or substantially the same relief, relying on The Laemthong Glory [2015] 1 Lloyd’s Rep 100 and Rawlinson v ITG [2015] EWHC 1664 (Ch) for the proposition that the court will treat such a second bite at the cherry as an abuse where the material relied on in the second application was available at the time of the first application and there has been no material change of circumstance.[27]However this is not an application for the same or substantially the same relief as the first jurisdiction challenge. It is well known that in the context of challenges to jurisdiction, reference to the Court’s jurisdiction can be a shorthand for two different concepts: one is the court’s jurisdiction to try the claim on its merits; the other is the court’s exercise of its jurisdiction to try the claim (see, for example Hoddinott v Persimmon Homes (Wessex) Ltd [2007] EWCA Civ 1203, [2008] 1 WLR 806 at [28]). Leaving aside cases covered by the Lugano Convention and recast Brussels 1 Regulation, service of process is the foundation of the court’s jurisdiction to entertain a claim in personam, and accordingly the court has such jurisdiction only where the defendant is served, in England or abroad, in the circumstances authorised by, and in the manner prescribed by, statute or statutory order (typically the Civil Procedure Rules): see Dicey Morris and Collins The Conflict of Laws 15th edn. Rule 29. Where there has been no such service, the court does not have jurisdiction. Where such jurisdiction has been established by service of process, the Court may nevertheless decline to exercise its jurisdiction, for example on grounds of forum non conveniens or lis alibi pendens.[28]The two types of challenge are logically and juridically separate and distinct. Moreover they typically involve different forms of relief. Where there has been no valid service necessary to found in personam jurisdiction, the court will set aside service and set aside the claim form. On the other hand where the challenge is to the exercise of jurisdiction on grounds of forum non conveniens, the appropriate relief is usually a stay of proceedings, which is capable of being lifted, if appropriate, in the light of subsequent events.[29]As Mr Cutress correctly emphasised, Capital’s first jurisdiction challenge was concerned only with service and was a challenge to the existence of the court’s jurisdiction; whereas this application, as now pursued solely on forum non conveniens grounds, is a challenge to whether the court should exercise its jurisdiction.[30]Capital’s application is not therefore a repetition of its first jurisdiction challenge: it has a different juridical basis and is for a different form of relief. It does not fall within the circumstances considered as an abuse of process in The Laemthong Glory or Rawlinson.[31]Nevertheless the current challenge could have been made, in the alternative, at the same time as the first jurisdiction challenge. It remains to be considered whether it should have been advanced then, and if so, what consequences follow under the terms of Part 11 or otherwise. Must a defendant who wishes to advance alternative grounds for challenging jurisdiction, one being as to the existence of jurisdiction, and the alternative being as to the exercise of jurisdiction if it exists, make his challenge in a single application raising both grounds? Or is it permissible to advance each ground separately and sequentially in two separate applications, the first being a challenge to the existence of jurisdiction, with the second, challenging the exercise of jurisdiction, brought only when and if the first application fails and the existence of jurisdiction is established?[32]In my judgment the answer is that normally both alternative grounds should be brought together in a single application where, as here, the grounds for challenging the exercise of the jurisdiction exist at the outset. I reach that conclusion for a number of reasons.[33]First it accords with the terms and structure of CPR Part 11 which provides: “11.1(1) A defendant who wishes to- (a) dispute the court’s jurisdiction to try the claim; or (b) argue that the court should not exercise its jurisdiction, may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have.(2) A defendant who wishes to make such an application must first file an acknowledgment of service in accordance with Part 10.(3) A defendant who files an acknowledgment of service does not, by doing so, lose any right that he may have to dispute the court’s jurisdiction.(4) An application under this rule must- (a) be made within 14 days after filing an acknowledgment of service; and (b) be supported by evidence.(5) If the defendant- (a) files an acknowledgment of service; and (b) does not make such an application within the period specified in paragraph (4), he is to be treated as having accepted that the court has jurisdiction to try the claim.(6) An order containing a declaration that the court has no jurisdiction or will not exercise its jurisdiction may also make further provision including- (a) setting aside the claim form; (b) setting aside service of the claim form; (c) discharging any order made before the claim was commenced or before the claim form was served; and (d) staying (GL) the proceedings.(7) If on an application under this rule the court does not make a declaration- (a) the acknowledgment of service shall cease to have effect; (b) the defendant may file a further acknowledgment of service within 14 days or such other period as the court may direct; and (c) the court shall give directions as to the filing and service of the defence in a claim under Part 7 or the filing of evidence in a claim under Part 8 in the event that a further acknowledgment of service is filed.(8) If the defendant files a further acknowledgment of service in accordance with paragraph (7)(b) he shall be treated as having accepted that the court has jurisdiction to try the claim.” (a) dispute the court’s jurisdiction to try the claim; or (b) argue that the court should not exercise its jurisdiction, may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have. (a) be made within 14 days after filing an acknowledgment of service; and (b) be supported by evidence. (a) files an acknowledgment of service; and (b) does not make such an application within the period specified in paragraph (4), he is to be treated as having accepted that the court has jurisdiction to try the claim. (a) setting aside the claim form; (b) setting aside service of the claim form; (c) discharging any order made before the claim was commenced or before the claim form was served; and (d) staying (GL) the proceedings. (a) the acknowledgment of service shall cease to have effect; (b) the defendant may file a further acknowledgment of service within 14 days or such other period as the court may direct; and (c) the court shall give directions as to the filing and service of the defence in a claim under Part 7 or the filing of evidence in a claim under Part 8 in the event that a further acknowledgment of service is filed.[34]Rule 11 contains a single procedural code for both types of jurisdiction challenge. Rule 11(1) identifies the two types, and provides that a defendant who wishes to make either kind of challenge can make an application. Rule 11 (2) and 11(3) provide that the defendant must first file an acknowledgment of service, which does not amount to a submission to the jurisdiction so as to preclude the right of challenge. Rule 11(4) provides that “an application under this rule” must be brought within 14 days of the acknowledgment of service (28 days in the Commercial Court: CPR 58.7(2)). That means an application to challenge jurisdiction of either or both of the two types identified in Rule 11 (1). Rule 11(6) provides for the situation where the jurisdiction challenge succeeds; it does so in terms which encompass both types of challenge and envisages different forms of relief whose appropriateness will depend on the type of challenge made. In particular it provides for a stay of proceedings and has been taken from the earliest days of the CPR as expanding the former Order 12 Rule 8 of the Rules of the Supreme Court to bring applications for a stay on the grounds of forum non conveniens within its scope: see Texan Management Ltd v Pacific Electric Wire & Cable Company Ltd [2009] UKPC 26 at [65]. Rule 11(7) and 11(8) provide for the situation where the jurisdiction challenge fails. The defendant is afforded a further period within which he can make a decision whether to participate in the proceedings or allow them to be uncontested by default, which may have advantages in relation to enforcement abroad of any judgment obtained against him. He is to make this choice by filing or not filing a further acknowledgment of service. If he fails to do so, his first acknowledgment of service, entered solely in order to challenge jurisdiction, will cease to have effect and the proceedings will be treated for enforcement purposes as if he had taken no part in them. If, on the other hand, he enters a further acknowledgment of service, Rule 11(8) states that he is taken to have accepted that the court has jurisdiction to try the claim.[35]This unitary code for jurisdiction challenges of both types suggests that where both types exist as alternatives, they should be made in a single application. There is no procedure for sequential applications in which a defendant may first challenge the existence of the court’s jurisdiction, and then, if he fails, challenge the exercise of the jurisdiction. On the contrary, Rule 11(7)(c) envisages that after one jurisdiction challenge which is dismissed, the Court will make an order which is designed to progress the proceedings to service of a defence if and when a second acknowledgment of service is entered; this is inconsistent with such second acknowledgment of service being the precursor to a second jurisdiction challenge by going back to the stage envisaged by Rule 11(2). Perhaps because of the complication of a possible strike out, Blair J was not invited to make an order under Rule 11(7)(c) giving directions for the filing and service of a defence if a further acknowledgment of service was filed; but had he done so the unavailability of the procedure adopted by Capital would have become apparent.[36]Secondly, my conclusion accords with the overriding objective of dealing with cases expeditiously and allotting them their fair share of the court’s resources. It is not uncommon for a defendant to wish to advance as alternative grounds a challenge to the existence of jurisdiction and a challenge to the exercise of jurisdiction. It is sometimes the case that there is considerable overlap in the evidence and arguments applicable to each alternative ground. But even where that is not so, it is in the interests of speed, efficiency and finality that such grounds should be brought forward at the first opportunity at which they may be presented, and that they should be disposed of on that occasion. Unnecessary delay in determining where a case should be tried involves undesirable delay in deciding the case on its merits.[37]Thirdly, this conclusion is consistent with the approach of Lord Collins giving the Opinion of the Privy Council in Texan Management Ltd v Pacific Electric Wire & Cable Company Ltd at [69]-[77]. He was there concerned to emphasise that circumstances giving rise to an application to challenge the exercise of jurisdiction might not exist at the outset of proceedings, as where, for example, the claimant subsequently commenced parallel proceedings abroad, or subsequent criminal proceedings called for a stay of the civil proceedings. In those circumstances Rule 11 could not be invoked, but a subsequent application for a stay could be brought under the Court’s inherent jurisdiction or the general power in CPR rule 3.1(2)(f). Where, however the circumstances said to justify a stay existed at the outset of proceedings, the application should be made promptly in accordance with the timetable in CPR Part 11: see para [77].[38]What then is the consequence of Capital’s failure to mount the current challenge as part of its first jurisdiction challenge? First, Mr Kenny is in my view correct in submitting that the application is out of time under Rule 11(4) (a) because the acknowledgment of service there referred to is the first acknowledgment of service referred to in sub rule (2), not any further acknowledgment of service under sub rule (8). This follows from the unitary scheme of Part 11 contemplating a single jurisdictional challenge of either or both types. I would not, however, treat this as sufficient grounds for dismissing the application. The point was only taken in a supplementary skeleton served on the morning of the hearing and Mr Cutress submitted, with some force, that it was prejudicially late because it did not afford an opportunity to seek an extension of time supported by evidence. He made such an application orally, insofar as it might prove necessary. Such an application can be made retrospectively, and although not strictly an application for relief from sanction, is governed by the same principles: see Zumax Nigeria Ltd v First City Monument Bank Plc [2016] EWCA Civ 567. There was simply no proper opportunity to explore such issues on a basis informed by evidence which was directed to the point because it was raised so late.[39]Secondly, I am not prepared to treat Rule 11(8) as a bar to the application being heard. It provides that Capital is to be treated as having accepted that the court has jurisdiction to try the claim. On the wording of sub rule (8) the deemed submission to the jurisdiction is only an acceptance of the existence, rather than exercise, of jurisdiction: its terms do not provide that it precludes an application that the court should not exercise the jurisdiction which it treats Capital as accepting that the court has. The decision of the Court of Appeal in Hoddinot on Rule 11(5) might suggest that Rule 11(8) should be read as if it said that the defendant should be treated as having accepted that the court has and should exercise jurisdiction, although I heard no argument on the point. But however that may be, it would not prevent Capital’s application for a stay being made under Rule 3.1(2)(f), as contemplated in different circumstances by the Texas Management decision; nor would it prevent a stay being granted by the Court of its own motion if appropriate on forum non conveniens grounds: see Cook v Virgin Media Ltd [2016] 1 WLR 1672. The fact that the Claimants raised this point so late has meant that it has not been fully argued. Accordingly I am not prepared to decline consideration of the merits of the application on this procedural ground.[40]Thirdly and finally, having failed to raise the challenge at the right time, its subsequent pursuit is potentially an abuse of process; the court retains a discretion whether to decline to hear it on that ground. In this context Mr Cutress argued that there had been a relevant change of circumstance at least so far as IMS’ claim was concerned: that had been struck out as a result of Blair J’s order and only restored with effect from 8 March 2016, with the result that the 11 March 2016 acknowledgment of service was the first acknowledgment of service in relation to IMS’ claim. This is to mischaracterise both the effect of the first acknowledgment of service and Blair J’s order. An acknowledgment of service to a claim which has not been properly served, and is subsequently struck out, is nevertheless an acknowledgment of service contemplated by Rule 11, indeed the only relevant acknowledgment of service so contemplated. Mr Cutress’ argument proceeded on the premise that Rule 11 contemplated sequential applications and sequential acknowledgments of service challenging jurisdiction, which I have held to be a false premise. Moreover, the substance of Blair J’s decision and order was that Capital’s challenge to jurisdiction in respect of IMS’ claim was not successful; on the contrary his decision was that the challenge should fail, by reason of CPR rule 19 and rule 3, unless Capital could successfully strike out the Owners’ claims, which it did not seek to do. Put another way, if Blair J had known then what the Court knows now, he would have dismissed the jurisdiction challenge in respect of IMS’ claim as well as that of the Owners. The first jurisdiction challenge was, in the event, unsuccessful even in respect of IMS’ claim. There has been no relevant change in circumstance so far as IMS’ claim is concerned from that which pertained in the first jurisdiction challenge.[41]Consistently with this analysis, Blair J’s order assumed that the only jurisdiction challenge which could be made on the available material had been made, and had been disposed of by him. This is implicit in paragraph 6 which provided that the “Court will exercise jurisdiction” in respect of IMS’ claim if no strike out application was pursued, which is what has transpired.[42]That leaves the question whether I should decline to hear this second jurisdiction challenge as an abuse, as Mr Kenny urged me; and/or whether I should extend the time for making such an application under Rule 11 and/or treat the application as made under Rule 3.1(2)(f) as Mr Cutress submitted I should. This is somewhat unsatisfactory in circumstances where I have identified the issue in different terms from that advanced on behalf of the Claimants, and in the absence of evidence and argument directed specifically to that approach by either side. I do not need to decide this question, because I am satisfied that the application should fail on its merits for the reasons set out below. I therefore decline to do so.

Merits of the jurisdiction application: jurisdiction agreement?

[43]Article 25 of the recast Brussels I Regulation applies what was article 23 of the Brussels I Regulation to proceedings in England commenced on or after January 10 2015 regardless of the domicile of the parties. It provides:
“1. If the parties, regardless of their domicile, have agreed that a court or the courts of a member state are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction….. Such jurisdiction shall be exclusive unless the parties have agreed otherwise.

(a) in writing or evidenced in writing…”

[44]Where article 25 applies, the Court is left with no discretion to exercise on forum non conveniens or other grounds; it must give effect to the relevant agreement and assume jurisdiction.[45]The burden rests on the Claimants to establish that there exists an agreement on jurisdiction which fulfils article 25, which I shall call “an article 25 agreement”. The standard of proof is that the Claimants must establish that they have the better of the arguments on the material presently available; the question is one of relative plausibility and does not impose a balance of probabilities standard: Bols Distilleries BV v Superior Yacht Services Ltd [2007] 1 WLR 12 at [28]; JSC Aeroflot Russian Airlines v Berezowski [2013] 2 Lloyd’s Rep 242 at [48]-[50]; Goldman Sachs International v Novo Banco SA [2015] EWHC 2371 (Comm) at [77].[46]It is important to emphasise a number of aspects of what constitutes an article 25 agreement. An article 25 agreement is an autonomous European law concept. The question is not whether English law, as the curial law or putative proper law of the agreement, would treat such agreement as valid and binding (see for example Aeroflot v Berezowski at [64]). To be effective for the purposes of article 25, an agreement to confer jurisdiction must clearly and precisely establish consensus between the parties: Estasis Salotti di Colzani Aimo e Gianmario Colzani n RUWA Polstereimaschinen GmbH (Case 24/76) [1976] ECR 1831; Galeries Segoura SPRL v Rahim Bonakdarian (Case 25/76 [1976] ECR 1851; Antonio Gramsci Shipping Corporation v Recoletos Ltd [2013] EWCA Civ 730 [2014] Bus LR 29 at [37]. Like its predecessors, article 23, and article 17 of the Brussels Convention, it is based on the autonomy of the parties.[47]There is authority to the effect that the concept of consensus can embrace an agreement which is not a binding contract. In the Antonio Gramsci case Beatson LJ said at [39]:
“Secondly, written consensus may exist in the absence of a binding contract: see Fentiman, International Commercial Litigation (2010), para 2.40, giving a non-binding memorandum and an unsigned version of a contract which requires signature as examples.”

The passage in Fentiman is in the following terms:

“It is possible that written consensus may exist even in the absence of a binding contract. The test is procedural, not contractual. The enquiry concerns the existence of consensus-in-fact, not of a legally binding agreement. Consensus in writing might therefore exist if a jurisdiction agreement is embodied in a non-binding memorandum, or in the final but unsigned version of a contract. In such cases, however, any dispute would not lie in contract.”
The passage in Fentiman is in the following terms:[48]I would, however, sound a note of caution. An unsigned contract may be left unsigned deliberately, because a party does not wish to be bound by its terms until signature. It may provide that it is to take effect only upon signature; or that may be the natural inference from the circumstances of the negotiation and drafting of the document. If so, that will generally apply as much to the term on jurisdiction as to the other terms of the agreement. That may also be the explanation for a non-binding memorandum of understanding: the parties did not intend the other to be entitled to insist on enforcement of any of its terms, including any term as to jurisdiction (although the existence of a jurisdiction clause providing for resolution of disputes before a court would be a powerful indication that the parties intended the other terms to be legally binding). In those circumstances it is difficult to see how there could be the consensus-in-fact to conferring jurisdiction which is required by the autonomous European law concept of agreement for the purposes of article 25. In every case the inquiry is fact sensitive.[49]In Aeroflot v Berezowski at [64], Aikens LJ cited an article by Professor Briggs, which he described as “persuasive”, which included the proposition that an article 25 agreement was not a bilateral or contractual agreement but unilateral. This follows from the concept of consensus-in-fact: the question is whether the party against whom the article 25 agreement is invoked has given his consent to conferring jurisdiction on the relevant court. But again I would sound a note of caution. In the context of a term contained in a contract, consensus-in-fact may be negated if the contract is unsigned, as where, for example, the inference is that consent was conditional on the execution of the agreement by the other party.[50]Against that background, Mr Kenny argued that the Claimants had the better of the argument that there was an article 25 agreement on essentially two alternative bases, namely that:(1) the Claimants executed the Settlement Deed in counterparts, as alleged in Mr Hicks’ third witness statement; or(2) the Settlement Deed was in any event executed by Capital such that: i. Capital is bound by it because the executor of a deed is bound irrespective of execution by a beneficiary, relying on Lady Naas v Westminster Bank Ltd [1940] AC 366; or ii. the signature by Capital was a unilateral manifestation of consent even if the agreement was not binding, and so fell within the principles adverted to by Beatson LJ in the Antonio Gramsci case and Aikens LJ in Aeroflot v Berezowski.[51]I am not persuaded that either side has the better of the arguments on the issue of the Claimants’ execution or non-execution of the Settlement Deed. The evidence is unsatisfactory and exiguous. There is no witness statement from any of the three individuals said to have been involved, namely Mr Ubah, Mr Holloway, and Captain Gialozoglou. Neither Mr Hicks for the Claimants nor Mr Usoro for Capital identify their source of information and belief for the relevant events (although there are passages from which one might infer that some at least of the account comes on the Claimants’ side from Captain Gialozoglou and on Capital’s side from Mr Ubah). There was no responsive evidence on behalf of the Claimants to the detailed account of events given by Mr Usoro in his second witness statement, notwithstanding the fact that Mr Hicks made a fourth witness statement to deal with other matters. I was not impressed with the submission that Mr Hicks had sufficiently covered the ground in his third witness statement, given the detail which emerged for the first time in Mr Usoro’s second witness statement which followed it in time, and given that the Claimants were seeking summary judgment. Neither side adduced evidence of what documents they now retained, nor of where the copy document put in evidence as the Settlement Deed came from. The Settlement Deed bears a date of 23 January on its face (supportive of Capital’s account); but it refers in clause 1 to execution being on 24 January and it was referred to in the 2015 Settlement Deed as “dated” 24 January (supportive of the Claimant’s account). Neither side adduced evidence seeking to explain the discrepancies. The Claimants’ reliance on selected subsequent communications is equally inconclusive, even if one were to take account of what Capital said were without prejudice communications (which I do not because I simply cannot tell on the evidence whether they were or were not without prejudice). The parties did not attempt to put before the Court even an outline of subsequent dealings between the parties sufficient to allow even tentative conclusions to be drawn from the few isolated exchanges upon which the Claimants relied. Despite the rival submissions by each side that its own account was inherently more plausible, I find it impossible to conclude that one is more probable than the other in the absence of a proper understanding of the relationship between the parties and the background to the agreement. There was some force in Mr Kenny’s submission that the evidence in Mr Hicks’ third witness statement cast considerable doubt on the “sham” explanation given in Mr Usoro’s first witness statement which the latter adopted as the reason for the Claimants not signing the Deed. But that is not sufficient to give the Claimants the better of the arguments overall on the issue of execution of the Deed. My overall assessment on the currently available material is that neither side has the better of the arguments.[52]I also reject Mr Kenny’s alternative submissions that the Claimants have the better of the arguments that there is an article 25 agreement even if the Deed were unexecuted by them. Reliance on the domestic law in respect of deeds, reflected in the Lady Naas case, is misplaced: what matters is consensus-in-fact as the autonomous European law concept; there is no reason to suppose that the parties consciously chose to embody the terms in a deed, rather than simply a written agreement, because of any difference in effect imposed by the English law applicable to deeds and contracts. The present case is not one in which consensus can readily be inferred from Capital’s unilateral signing of the document: clauses 3 and 9 suggest that what was contemplated was signing of the agreement on both sides and that it would only be upon signing by the Claimants that Capital would obtain the release which was an integral part of the bargain. It must be remembered that an article 25 agreement must be clearly and precisely demonstrated. Even as a matter of English law, the Lady Naas case does not go so far as to establish that a deed executed by the settlor alone is binding on him when the proper construction of the deed is that it is only to come into force upon signature by another party. Whether that is so in this case will depend upon the background to the agreement, against which clauses 3 and 9 fall to be considered and which will have to be investigated at trial; but it cannot be said on the present material that the Claimants have the better of the argument.

Merits of the jurisdiction application: forum non conveniens?

[53]The relevant principles established by the seminal speech of Lord Goff in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 and subsequent authorities were not in dispute. The defendant must establish that there is another clearly and distinctly more appropriate forum for the trial of the action. It is not enough to show that England is not the, or a, natural forum; he must establish that there is another forum which is clearly and distinctly more appropriate. In commercial cases there may be no forum which can properly be described as the natural forum, and no one forum may be any more appropriate than another. In such a case the defendant will fail to discharge the burden of establishing another forum which is clearly and distinctly more appropriate than England. If the defendant establishes a clearly and distinctly more appropriate forum, it is then for the claimant to show that there are special circumstances by reason of which justice requires that the trial should nevertheless take place in England.[54]Mr Cutress relied on the following as showing that Nigeria is clearly a more appropriate forum:(1) Capital is a Nigerian oil company carrying on business from Nigeria.(2) The Settlement Deed was drawn up and executed in Lagos, where the disputed events took place;(3) Capital’s key witness is Mr Ubah who is resident in Nigeria, as is Mr Osigwe, the Nigerian lawyer said to be at the relevant meeting.(4) The Settlement Deed arises out of the claim by a Nigerian bank, Access Bank, following the arrest of two vessels in Nigeria;(5) apart from the English jurisdiction clause the dispute has no real connection with England; and that is of no significance because Capital has the better of the arguments that the Settlement Deed was not executed and is not binding.[55]These considerations fall well short of meeting the necessary threshold of demonstrating that Nigeria is a clearly or distinctly more appropriate forum; England is at least as appropriate if not more so:(1) Capital does not have the better of the arguments as to whether the Settlement Deed was executed by the Claimants. Its putative proper law is English law. The English Court is best placed to decide disputed questions of English law (for example as to the applicability of the Lady Naas decision).(2) The nationality and location of the parties is at best neutral. The Owners are Liberian companies managed by IMS carrying on business in Greece. They were represented at the time and now by English solicitors. Capital is a Nigerian company carrying on business in Nigeria but represented at the time, in part, by an English solicitor practising in London.(3) The location of the witnesses is also fairly evenly balanced. The only aspect of the claim which Capital has currently identified as giving rise to a factual dispute is as to the execution of the Settlement Deed. On that issue, the potential witnesses who may give oral evidence are Mr Ubah and Mr Osigwe who are in Nigeria, and perhaps also Mr Usoro, who is also in Nigeria; Mr Holloway and Mr Hicks who are in London; and Captain Gialozoglou who is in Greece.(4) Relevant documents are likely to be in London (with Mr Hicks and Mr Holloway) in Greece (with the Claimants) and in Nigeria (with the Defendant).(5) The location of events surrounding signing of the Deed is not significant in the assessment of where the dispute can most conveniently be tried. As to the background, it includes the Access Bank proceedings in the Commercial Court in London as well as arrests in Nigeria and Durban. It is not significantly centred on Nigeria in a way which points to Nigeria as a more appropriate forum.[56]Accordingly the jurisdiction application will be dismissed.

The Summary Judgment Application

[57]It is not necessary to address Mr Cutress’ submissions, with which Mr Kenny took issue, that in the light of the principles articulated by Lewison J, as he then was, in Speed Investments v Formula One Holdings [2005] 1 WLR 1233 at [14]-[18], the Court should not hear the summary judgment application. It follows from what I have already said about the arguments on the merits that on the present material Capital has a real prospect of defending the claim and that the summary judgment application must fail. The most convenient course is to dismiss it.

order

“3. By no later than 4pm on 4 March 2016, the 2nd - 5th Claimants ("the Owners") shall serve on the Defendant a draft amended Claim Form and Particulars of Claim, showing the striking out of IMS's claim and any consequential amendments. 4. The Defendant is to serve a further acknowledgment of service by 4pm on 11 March 2016. 5. Any application by the Defendant to strike out the rest of the Claim Form, i.e. the Owners' claims, shall be issued by no later than 4pm on 18 March 2016. 6. If no such application is made by that time, IMS is to be joined as a party to the action with effect from 4pm on 18 March. In that event, IMS's claim in the Claim Form is to be treated as having been restored and the Court will exercise jurisdiction in respect of it.” Order: (1) IMS was treated as joined as a party to the action; (2) IMS’ claim in the Claim Form was treated as having been restored.

Cited in 15 later judgments

and 6 more of the most senior