In the case of National Bank of Fujairah (Dubai Branch) - v - Times Trading Corp [2020] EWHC 1983 (Comm), Campbell Johnston Clark, together with Rajah & Tann Singapore LLP, acted on behalf of the Bank in their successful application for a time extension in the Commercial Court under section 12 of the Arbitration Act 1996. The CJC team was led by Gareth Williams and Russell Harling, assisted by Debo Fletcher and Samuel Jones.
Background
The application was brought in the context of 27 bills of lading (“the Bills of Lading”), held by National Bank of Fujairah (Dubai Branch) (“NBF”), issued in respect of a cargo of steam (non-coking) coal to be shipped between Indonesia and India, on the MV “Archagelos Gabriel” (“the Vessel”). The cargo was discharged against letters of indemnity, without production of the Bills of Lading.
NBF alleged that this discharge was wrongful and that it was entitled to bring a claim as the holder of the Bills of Lading for misdelivery against the registered owner of the Vessel, Rosalind Maritime LLC (“Rosalind”). Arbitration proceedings were commenced within the applicable one-year limitation period prescribed by Article III Rule 6 of the Hague Rules. However, it was however later suggested, after the one-year time limit had expired, that a bareboat charter existed, and the carrier under the Bills of Lading was in fact Times Trading Corp (“Times”), and not Rosalind. NBF therefore brought the application for an extension of time, to allow for the possibility of an arbitration claim against Times, although there was no admission by NBF that Times was the appropriate defendant to NBF's claim for misdelivery.
NBF's primary application for the time extension was under s.12(3)(b) of the Arbitration Act 1996, or in the alternative, s.12(3)(a). In order to satisfy the requirements under s.12(3)(b), NBF needed to prove that, due to the positive conduct of Times, it would be unjust to bar NBF from bringing their claim. This conduct may have been unintentional and did not have to be the sole cause of the failure to meet the deadline. It would be sufficient for a causal nexus to exist as a result. Alternatively, to succeed under s.12(3)(a), the jurisdictional hurdle of “circumstances outside the reasonable contemplation of the parties”, would need to be met.
Section 12(3)(b)
Conduct attributable to Times
Foxton J looked to the wider circumstances of the correspondence between the parties' lawyers over two phases. The first phase covered correspondence before Waterson Hicks (“WH”) learned of the existence of the Bareboat Charterparty and thus the identity of the true carrier under the Bills of Lading. Foxton J noted how, for example, WH was appointed by the P&I Club on behalf of both Times and Rosalind. In addition, WH was specifically instructed by natural person(s) working for Times Navigation, and Times Navigation was authorised to act only for Times, and not Rosalind, with the inference to be drawn being that the relevant messages were authorised on behalf of Times.
The second phase of correspondence covered the period after WH became aware that the carrier was Times and not Rosalind. Foxton J held that it would have been artificial to regard correspondence written by WH as correspondence sent only on behalf of Rosalind and not Times. He held this on the basis that the correspondence was written in the interest of both parties, with a view to not disclosing the involvement of Times. Additionally, Foxton J noted that Times, Rosalind and Trafigura (as the party at the bottom of the chain of charterparties) entered into a Co-operation agreement under which Trafigura took over the handling of NBF’s claim. They did this on behalf of “Rosalind and/or Times” and so Foxton J held that communications by the solicitors after this point were attributable to Times. Additionally, this agreement made explicit reference to the bareboat charterparty in favour of Times.
Circumstances outside the reasonable contemplation of the parties
In relation to the second phase, Foxton J was more critical of the conduct of WH and Times. He held that the attempts by WH and Times to maintain the consistency of their communications (over both phases) had the objective effect of conveying a different impression of the facts, than that known by Times and the parties acting for them.
Foxton J concluded that it would be unjust to hold NBF to the strict terms of the time bar. The impression given on Times’ behalf, both with and without the knowledge of the true carrier, played a significant role in NBF missing the time bar, and therefore established the causative nexus of s.12(3)(b).
S.12(3)(a)
While he did not need to rule on this issue, Foxton J commented that this element of NBF’s application would have failed. In particular, he would not have regarded the effect of communications sent on behalf of persons other than Times to be matters outside the reasonable contemplation of the parties, which the parties might have thought made it unjust for Times to rely on the Hague Rules time bar.
Discretion and delay
Following Foxton J’s conclusion that the Court had jurisdiction to extend time, Times argued that NBF's long delay in bringing the s.12 application after becoming aware it had commenced proceedings against the wrong party, meant that the Court's discretion ought not to be exercised. Foxton J agreed with Times that there had been significant culpable delay on the part of NBF in not acting promptly in seeking s.12 relief. However, Foxton J found that Times' conduct contributed to the delay, for instance in refusing NBF's repeated request to produce a copy of the bareboat charter. Foxton J therefore chose to exercise his discretion, taking into account the conduct of the parties, and how the conduct of Times would have reinforced NBF's belief that Rosalind was the carrier.
Foxton J did not consider that culpable delay by NBF was of itself sufficient to preclude s.12 relief, even though culpable delay was a factor to be considered by the Court in deciding whether to exercise its discretion. Given Foxton J had found the s.12(b) jurisdictional hurdle to have been cleared “by an appreciable margin” [59], due to the ongoing and contributing conduct of Times, he held it appropriate to grant the extension sought by NBF.
Comment
This case provides useful guidance as to when the Court is likely to extend s.12 relief. It provides an example of how the Court will look to the wider circumstances of correspondence, and the relevant knowledge of each party when corresponding with the other. These wider circumstances include determining which parties a solicitor represents, and the extent to which parties would be able to determine this in the course of correspondence. Additionally, it holds that correspondence from a solicitor may be deemed to be on behalf of multiple parties (all of whom they represent), where it is written in the interest of all these parties.
It also lends weight to an earlier High Court decision that actions that reinforce the error of a party and contribute to the missing of a time bar, may be sufficient to establish the causative nexus of s.12(3)(b).
Finally, the case demonstrates that even with a lengthy delay on the part of the applicant, relief may still be granted depending on the circumstances, such as where there has been sufficiently contributing conduct on the part of the defendant. Further, where this delay is culpable in nature, the case demonstrates that the Court retains the discretion to grant relief, where it is just to do so.
Parties are also reminded that the option to request documents, such as any alleged Bareboat Charterparty by making an application to the arbitration tribunal appointed is available, and failure to make use of this recourse could be used against them.
The judgment of Mr Justice Foxton can be found here.