A&N Seaways and Projects PVT Limited v Allianz Bulk Carriers DMCC [2025] EWHC 2126 (Comm)

“[Charterers challenge] the [Award]. The part of the [Award] challenged is the arbitrator’s decision in paragraphs [34]-[38] that he had jurisdiction to determine the claim that [Owners] had presented in the reference to the arbitration. The grounds for the challenge are that the purported [Charterparty] was of no legal effect because it had been entered into by one of [Charterers’] two directors, Sashank Puria, without the authority of [Charterers]. The purported [Charterparty] was signed only by Mr Puria. There was no written resolution of [Charterers’] board of directors authorising [Charterers] to enter into the purported [Charterparty] and [Owners] would have been aware of the absence of any such resolution. [Charterers were] unaware of the actions of Mr Puria and of the purported [Charterparty] until it received a demand notice dated 10 October 2023 from [Owners]. [Charterers’] other director, James Richard Samuel, was unaware of the purported [Charterparty]. Accordingly there was no valid arbitration agreement between [Charterers] and [Owners].”

“would have been aware of the absence of any such resolution[i.e., a board resolution by Charterers authorising Mr Puria to enter the Charterparty].”

“It is pertinent to mention that there is no Board resolution from the [Charterers] granting authority to [Mr Puria] to make any independent decisions regarding the company’s affairs, nor is there any Board resolution specifically authorizing any business dealings with the [Owners] to incur liabilities on behalf of the [Charterers]. It is further pertinent to note that there was a lack of due diligence on the part of the [Owners] when it entered the contract for the first time allegedly with the [Charterers] through [Mr Puria] and it did not also insist a Board Resolution [sic] from [Mr Puria]. These deficiencies on the part of the [Owners] give rise to concerns about the genuineness, validity and enforceability of the purported [Charterparty]. While there could have been multiple reasons for the collusion between the [Owners] and [Mr Puria], I understand upon enquiry that the vessel was likely idling and the opportunity to defraud the [Charterers] by using the idling vessel and that too at higher than market rates had driven the [Owners] to participate in the fraud with [Mr Puria]. Therefore, the said [Charterparty] was entered into between [Mr Puria] and the [Owners] without the knowledge and/or approval of the [Charterers] but in the name of the [Charterers] with a collusive and mala fide intention to defraud the [Charterers] and enrich themselves unjustly.”

“Particulars of Dishonesty [Charterers aver] that the fraudulent bad faith alternatively dishonesty of [Owners] in entering into the [Charterparty] can be inferred from the following facts: (a) [Owners] took no steps to confirm [Charterers’] board of directors had approved the execution of the purported [Charterparty]. (b) [Owners] agreed to the nomination by Mr Puria of [SPG] alternatively amendment to the [Charterparty] to place [SPG] in place of [Charterers] without confirming the legal status of [SPG] and its relationship with [Charterers]. (c) [Owners] accepted [SPG] as the guarantor of payment. (d) The only payments made to [Owners] were made by [SPG]; no payments were made by [Charterers]. (e) Delivery of the vessel was in fact to [SPG] because [Charterers] did not take delivery. (f) [Owners have] failed to provide proof of the valid delivery of the vessel in the form of clearance certificate from the relevant local authorities. (g) There is no record of an addendum, a new contract or amended fixture note between [Owners] and [SPG] to permit payments from [SPG] to [Owners] through outward remittances, a regulated banking process, which required an amended fixture note in [SPG’s] name. (h) [Owners] did not withdraw the vessel prior to 22nd September 2023 despite the failures to pay hire charges and payment defaults. The vessel was deliberately idled, docked, anchored, or delayed for a period exceeding the time stipulated resulting in additional hire charges. (i) [Owners] took no action against [SPG] notwithstanding the agreement by SPG to pay the hire charges. Alternatively, on the basis of the same facts, [Owners were] or should have been aware that [Charterers] had not entered into the [Charterparty]. [Charterers] did not ratify the purported [Charterparty] and obtained no benefit from it because [Charterers were] entirely unaware of the existence of the [Charterparty] until 10 October 2023 and did not enter into any contracts to carry any goods on the vessel.”

“The principles regarding extensions of time to challenge an arbitration award have been addressed in a number of recent authorities, most notably in Kalmneft v Glencore [2002] 1 Lloyd’s Rep 128 , Nagusina Naviera v Allied Maritime Inc [2003] 2 CLC 1, L Brown & Sons Limited v Crosby Homes (Northwest) Limited [2008] BLR 366, Broda Agro Trading v Alfred C Toepfer International [2011] 1 Lloyd’s Rep 243, and Nestor Maritime v Sea Anchor Shipping [2012] 2 Lloyd’s Rep 144, from which I derive the following principles: (1) Section 70(3) of the [1996 Act] requires challenges to an award under sections 67 and 68 to be brought within 28 days. This relatively short period of time reflects the principle of speedy finality which underpins the Act, and which is enshrined in section 1(a). The party seeking an extension must therefore show that the interests of justice require an exceptional departure from the timetable laid down by the Act. Any significant delay beyond 28 days is to be regarded as inimical to the policy of the Act. (2) The relevant factors are: (i) the length of the delay; (ii) whether the party who permitted the time limit to expire and subsequently delayed was acting reasonably in the circumstances in doing so; (iii) whether the respondent to the application or the arbitrator caused or contributed to the delay; (iv) whether the respondent to the application would by reason of the delay suffer irremediable prejudice in addition to the mere loss of time if the application were permitted to proceed; (v) whether the arbitration has continued during the period of delay and, if so, what impact on the progress of the arbitration, or the costs incurred in respect of the arbitration, the determination of the application by the Court might now have; (vi) the strength of the application; (vii) whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined. (3) Factors (i), (ii), and (iii) are the primary factors.”

“It is, with respect, insufficient in my judgment, although a common practice, merely to say in the Claim Form, beyond identifying the bare statutory essentials, that reference should be made to the supporting witness evidence. Witness statements served in support of a section 68 claim should contain evidence, not comment or argument. They are not the proper vehicle for setting out the analytical case to be advanced before the court; that should properly be done by way of statement of case. In circumstances where the procedure for section 68 challenges, as for that matter section 67 challenges, does not involve, unless specifically ordered in a particular case, an exchange of statements of case separate to the Claim Form, the Claim Form has to serve that purpose.”

“The pleading of fraud or deceit is a serious step, with significance and reputational ramifications going well beyond the pleading of a claim in negligence. Courts regard it as improper, and can react very adversely, where speculative claims in fraud are bandied about by a party to litigation without a solid foundation in the evidence. A party risks the loss of its fund of goodwill and confidence on the part of the court if it makes an allegation of fraud which the court regards as unjustified, and this may affect the court’s reaction to other parts of its case. Moreover, as Birss J observed in Property Alliance Group v Royal Bank of Scotland [2015] EWHC 3272 (Ch) at [40], allegations of fraud ‘can cause a major increase in the cost, complexity and temperature of an action.’ For these reasons parties are well-advised, and indeed enjoined according to usual pleading principles, to be reticent before pleading fraud or deceit.”

“As the defendant points out, the claimants seek to undermine and circumvent the statutory time limits provided by Section 70(3) of the 1996 Act by issuing a Claim Form without detailed particulars and without evidence and then making an application to file and serve detailed particulars and written evidence 72 days after the statutory deadline, after serving those particulars and evidence some eight weeks after that deadline. These are not short periods in the context of the 28 day period allowed by statute. The public policy which underlies arbitration and the finality of awards means that extensions of time, particularly on a retrospective basis, are not lightly given. Section 73(2) of the 1996 Act provides that where an arbitral tribunal decides that it has jurisdiction and a party who could have questioned that ruling by challenging the award does not do so within the time allowed by the statute, ‘he may not object later to the tribunal substantive jurisdiction on any ground which was the subject of that ruling’. Whilst this is not a case where the Claim Form was issued out of time (as in Kalmneft JSC v Glencore International AG [2001] 2 AER (Comm) 577), the principles to be applied are not dissimilar as appears from the decision of Colman J in Westland Helicopters Limited v Sheikh Salah al-Hejailan (1) [2004] 2 LLR 523 at paragraphs 38-42.”

“The parties are entitled to know the specific grounds which are to be advanced in challenge to an arbitration award not only because they must know the case to be met but also because they should know the extent to which what would otherwise be a valid award is challenged. One of the objectives of arbitral proceedings is to achieve the speedy determination of disputes. It is accordingly very important that time requirements prescribed by the Act are strictly complied with and only allowed to be departed from in exceptional cases. No reasonable excuse has been proffered to the court for the failure to plead the grounds now sought to be introduced at the time the Arbitration Claim Form was issued.”

“give rise to concerns about the genuineness, validity and enforceability of the purported [Charterparty]. While there could have been multiple reasons for the collusion between the [Owners] and [Mr Puria], I understand upon enquiry that the vessel was likely idling and the opportunity to defraud the [Charterers] by using the idling vessel and that too at higher than market rates had driven the [Owners] to participate in the fraud with [Mr Puria]. Therefore, the said [Charterparty] was entered into between [Mr Puria] and the [Owners] without the knowledge and/or approval of the [Charterers] but in the name of the [Charterers] with a collusive and mala fide intention to defraud the [Charterers] and enrich themselves unjustly.”

“(i) Full and specific details should be given of any allegation of fraud, dishonesty, malice or illegality; and (ii) where an inference of fraud or dishonesty is alleged, the facts on the basis of which the inference is alleged must be fully set out.”

“That all said, there remains some flexibility in allowing an element of freedom to a claimant alleging fraud to plead its case with the evidence and information then available, given that there might be concerns that the evidence against the defendant will not be readily available, at least possibly until disclosure and the exchange of evidence.”

“… it is not normal business practice to request to see board approval; indeed it would be highly unusual. … I do not consider that any lack of board approval would be relevant in any event, and consider that we were entitled to rely on Mr Puria, as a director of [Charterers] (a company with only 2 directors), when entering into the contract.”

“The test under CPR rule 3.4(2)(a) requires the court to be satisfied that the claim is ‘unwinnable’ where continuance of the claim is without any possible benefit to the respondent and would waste resources on both sides. … This sets a high hurdle for an applicant seeking to strike out a statement of case. There are some circumstances in which the applicant may not succeed in striking out a claim that is ‘bound to fail’ where the relevant area of law is subject to some uncertainty and is developing such that it is desirable that the facts should be found at a trial so that any further development of the law should be on the basis of actual and not hypothetical facts.”

“The Court has power under rule 3.3(4) and/or rule 23.8(c) to dismiss any claim without a hearing. It is astute to do so in the case of challenges to awards under section 67 or 68 of the Act where the nature of the challenge or the evidence filed in support of it leads the Court to consider that the claim has no real prospect of success. If a respondent to such a challenge considers that the case is one in which the Court should dismiss the claim on that basis: (a) the respondent should file a respondent’s notice to that effect, together with a skeleton argument (not exceeding 15 pages) and any evidence relied upon, within 21 days of service of the proceedings on it; (b) the applicant may file a skeleton and/or evidence in reply within 7 days of service of the respondent’s notice.”

“A party cannot have its cake and eat it: it must really elect at the outset to snub the process entirely, or to engage, and if the latter, any engagement at all will cost that party the right to apply under section 72.”

“Please note that the appointment of arbitrator by your client to commence the arbitral proceedings is illegal since our client disputes the existence of the alleged Charter Party dated July 05, 2023 stated to have been executed by our client … Kindly advise your client to forthwith withdraw the initiation of arbitration under the alleged Charter Party”; (2) on 13 February 2024: “The Sole Arbitrator was unilaterally nominated and wrongly declared as appointed at the instance of the Claimant without considering the responses sent by us on behalf of our client on October 26, 2023 and November 22, 2023. In the said responses, our client disputed the very existence of the purported Charter Party and called upon your client to forbear from initiating any arbitral proceedings. We once again reiterate our objections to the purported and wrongful constitution of the present Arbitral Tribunal which lacks jurisdiction over the alleged dispute between the Claimant and our client since the subject matter is non arbitrable for the reasons stated and reiterated below … … Therefore, in light of the aforesaid facts and circumstances, there is no valid dispute for the present Arbitral Tribunal to decide. The jurisdiction of the present Arbitral Tribunal is challenged and disputed as the subject matter is non-arbitrable and non-maintainable as against our client”; and (3) on 26 February 2024: “Therefore, our client requires three-week time extension to prepare and submit appropriate submissions/application before Mr. David Martin Clark, the Sole Arbitrator based on the opinion that our client procures from the counsel in London.”

“1. We refer to your below interim response to the claim submissions of 17 January. We note that your clients deny liability and contest jurisdiction. 2. The next step is to inform the appointed arbitrator of the parties’ respective positions, including your clients’ jurisdictional challenge. As such we will write to the arbitrator with you in copy. Before we send that message, we have noted that your interim response is marked ‘without prejudice’. We understand that to be a general reservation of all your clients’ rights, including as to jurisdiction rather than an assertion of privilege over the contents of your clients’ response to the claim submissions … For the sake of good order, could you please confirm within Monday 19 February 2024, 4pm London to me, that your interim response is precisely that and is for submission to the Tribunal. We will write to the Tribunal after the aforementioned time and so look forward to your confirmation by then.”

“Your understanding is correct as to the reservation of our rights regarding the arbitrability of the captioned dispute. We object to the initiation of arbitration proceedings itself including the appointment of a Sole Arbitrator by you. We reserve all our rights to challenge the jurisdiction of the Arbitral Tribunal. Please note that we have no objections in forwarding the interim response dated February 13, 2024 by you to Mr. David Martin-Clark, however, the same does not amount to our client’s acceptance to submit itself to the arbitration proceedings initiated by you.”

“Our client is currently in the process of obtaining a legal opinion from counsel in London. Therefore, our client requires three-week time extension to prepare and submit appropriate submissions/application before Mr. David Martin Clark, the Sole Arbitrator based on the opinion that our client procures from the counsel in London.”

“… the failure of a case of fraud or dishonesty is a factor that the court may take into account in deciding on the basis of assessment but there is no automatic or rule that the making of such allegations which fail at trial will justify an order for indemnity costs or even operate as a starting point in the sense that the paying party is then required to explain why indemnity costs are not appropriate. It is also right to recall that the default position is that standard costs are to be paid unless the court orders otherwise.”