Judgment call: 2 December

Arbitration 

London Steam Ship Owners Mutual Insurance Association Ltd v Spain 2013 WL 4788858 QBD (Comm) Walker, J. Judgment Date: 20 September 2013

Application granted

In obiter comments, the court held that the provisions of the Arbitration Act 1996 s.72 on the rights of persons not participating in proceedings should be construed generously, so that s.72(1) did not have to be confined to the position before the issue of an award.

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For the claimant London Steam Ship Owners Mutual Insurance Association
20 Essex Street’s Christopher Hancock QC; 20 Essex Street’s Charlotte Tan; Ince & Co partner Michael Volikas

For the defendant Spain

Essex Court Chambers’ Sara Cockerill QC; Essex Court Chambers’ Anna Dilnot; K & L Gates partner Ian Meredith

Civil procedure

(1)Anthony John Page; (2) Terence Albert Page (as Administrators of the estates of Annie Harriet Page and Aubrey Wilfrid Page) v (1) Hewetts Solicitors; (2) Christopher Robert Fuller 2013 WL 4788849 Ch D Hildyard, J. Judgment Date: 20 September 2013

Preliminary issue determined in favour of defendants

A claim for secret profits had not been “brought” within the relevant limitation period where the claimants’ request to the court for the issue of the claim, submitted on the last possible day, had not been accompanied by the appropriate court fee.

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For the claimants

Five Paper’s Graham Platford; Cavershams Solicitors Limited managing director Robert Last

For the defendants(1) Hewetts Solicitors; (2) Christopher Robert Fuller:

Hailsham Chambers’ Dan Stacey;  Hewetts Solicitors partner Oliver Kew for the first defendant; Henmans Freeth partner Duncan Crine for the second defendant

Insolvency

McKinnon (Trustee in Bankruptcy) v Graham 2013 WL 5328637 Ch D Judge Behrens QC Judgment Date: 20 September 2013

A judge had not erred in exercising his discretion under the Insolvency Act 1986 s.426(5) to apply Scottish law to proceedings brought against a Scottish bankrupt by a trustee in bankruptcy for an order for sale of property located in England. The application of Scottish law did not offend any fundamental principle of English insolvency law or public policy nor did it create manifest unfairness so as to exclude the principle of modified universalism.

Appeal dismissed

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For the respondent Graham:

Cathedral Chambers’ Geoffrey Knowles; Row & Scott partner Richard Scott

The applicant did not appear and was not represented

Breach of contract

Thomson Ecology Ltd v Apem Ltd 2013 WL 5328639 Ch D John Martin Q.C. Judgment Date: 24 September 2013

A company employee who had given notice of termination of his employment and accepted an offer of employment from a competitor had breached his contractual duty of good faith and fidelity by failing to report a threat to the business to his superiors and actively assisting the competitor in identifying and recruiting the company’s staff.

Judgment for claimants

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For the claimant Thomson Ecology Ltd

Littleton Chambers’ Chris Quinn; Blackie Herington partner Hamish Cameron Blackie

For the defendant Apem Ltd

11KBW’s Simon Devonshire QC; Eversheds associate Fiona Walker

Planning

DB Schenker Rail (UK) Ltd; (2) Towngate Estates Ltd  v Leeds City Council 2013 WL 5328642 QBD (Admin) Judge Belcher Judgment Date: 24 September 2013

Before a site could be safeguarded for a particular use in a local development plan, there had to be robust evidence of that use; a planning inspector would be failing in his assessment of “soundness” under the Town and Country Planning Act 1990 s.20 if he ordered the protection of a site for a period in the hope that evidence of use would come forward. A sustainability assessment did not, itself, have to cover alternative uses for the site as long as it was part of a series of documents which, acting cumulatively, did so.

 Application granted in part

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For the claimants DB Schenker Rail (UK) Ltd; (2) Towngate Estates Ltd:

Landmark Chambers’ Reuben Taylor; Walton & Co director David Walton

For the defendant Leeds City Council:

Landmark Chambers’ John Hobson QC; Leeds City Council solicitor Karen Blackmore

Planning

Fordent Holdings Ltd v Secretary of State for Communities and Local Government. Interested party: (2) Cheshire West And Chester Council 2013 WL 5328686 QBD (Admin) Judge Pelling, Q.C.  Judgment Date: 26 September 2013

In ruling on a challenge to a planning inspector’s decision to uphold the refusal of outline planning permission for a change of use for a site located within the green belt from agricultural use to a caravan and camping site, the court construed certain provisions of the National Planning Policy Framework.

Application refused 

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For the claimant Fordent Holdings Ltd:

Kings Chambers’ Jonathan Easton; LL Barrowcliff Solicitors’ managing director Nigel Barrowcliff

For the defendant Secretary of State for Communities and Local Government:

Francis Taylor Buildings’ Cain Ormondroyd; Treasury Solicitor  Alexandra Lewenstein

Featured case: Conflict of laws 

Starlight Shipping Co v Allianz Marine & Aviation Versicherungs AG. [2013] WL 5904680 SC. Lord Neuberger JSC; Lord Mance JSC; Lord Clarke JSC; Lord Sumption JSC; Lord Hughes JSC.
6 November 2013

The purpose of Regulation 44/2001 art.27 was to prevent the courts of two member states from giving inconsistent judgments and to preclude, as far as possible, the non-recognition of a judgment on the ground that it was irreconcilable with a judgment from another member state. When considering whether it was bound to order a stay of proceedings under art.27, a court had to compare the object and cause of action of each set of proceedings rather than focusing on the end result to be achieved in each jurisdiction.

Appeal allowed, cross-appeal dismissed

plane

 

For the respondents Starlight Shipping Company

20 Essex Street’s Iain Milligan QC,

20 Essex Street’s Michael Ashcroft QC, 20 Essex Street’s Luke Pearce,

Thomas Cooper partner Charlie Williams, Thomas Cooper partner Douglas Bateson

For the appellants (1) Allianz Marine & Aviation Versicherungs AG; (2) Royal & Sun Alliance Insurance; (3) Assicurazioni Gereralispa; (4) Rembrandt Insurance Co Ltd

Brick Court’s Mark Howard QC,

Brick Court’s Michael Swainston QC, Brick Court’s Tony Singla,

Clyde & Co partner Michael Roderick

For the appellants (5) Brit UW Ltd (sued on its own behalf and on behalf of all underwriting members of Lloyd’s Syndicate 2987 for the 2006 Year of Account); (6) Nicholas Burkinshaw (sued on his own behalf and on behalf of all underwriting members of Lloyd’s Syndicate 2003 for the 2006 Year of Account); (7) Hiscox Dedicated Corporate Member Ltd (sued on its own behalf and on behalf of all underwriting members of Lloyd’s Syndicate 0033 for the 2006 Year of Account)

Stone Chambers’ Steven Gee QC,

Stone Chambers’ Tom Whitehead, Stone Chambers’ Peter Stevenson, Norton Rose Fulbright partner Chris Zavos, Norton Rose Fulbright partner Anna Haigh

For (8) Hill Dickinson; (9) Hill Dickinson International

7KBW’s David Bailey QC, 7KBW’s Jocelin Gale, Mayer Brown partner Will Glassey, Mayer Brown partner Claire Lewis

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Commentary, Jonathan Bruce

Bruce

After much to-ing and fro-ing between the English High Court, a Greek court, the Court of Appeal (CoA) in London and the Supreme Court, we now have some clarity around the issue of the finality of an English settlement agreement. In a landmark decision the Supreme Court has ruled that an English settlement agreement should bring a full stop to a dispute and should not be capable of being unravelled by a foreign court.

The facts of the story have been well publicised: after the sinking of the ‘Alexandros T’, owners Starlight Shipping Company became embroiled in a bitter dispute with its insurer, launching a claim against them in the High Court in London in 2006. The case settled for 100 per cent of the principal sum claimed. 

Subsequently Starlight issued a fresh claim against the insurers in Greece, sending a shock wave through the London insurance market, where their action was seen as potentially undermining the very concept of finality (key to legal and business certainty) in settlement agreements.

Starlight was using arguments that evidence had been fabricated and witnesses bribed in the course of the English proceedings, to persuade the Greek court to review the circumstances of the case and effectively unpick the settlement agreement. 

In response, the insurers sought the assistance of the High Court in enforcing the settlement, which was in turn resisted by Starlight, which applied for these English proceedings to be stayed while the Greek proceedings were ongoing – a classic turf war over the jurisdiction of the dispute.

The High Court concurred with the insurers and stayed the Greek proceedings, but the to-ing and fro-ing continued with the Court of Appeal reversing this position. The insurers then took the matter to the Supreme Court, which issued its judgment this month.

The sound of the insurance markets breathing a collective sigh of relief is audible.

In its judgment the Supreme Court underlined that it was important not to prevent a final decision of the English court where this was the jurisdiction that governed the contract. “Once there is a final judgment of the English court, it will be recognisable in Greece, as elsewhere in the EU and will assist the Greek courts.”

The Supreme Court determined that Article 27 of the EU Jurisdiction Regulation, which obliges any court other than the first seized (in this case Greece)
to order a stay, did not apply because the English and Greek proceedings did not involve the same “cause of action”. This is a highly technical argument, and possibly the result is counter-intuitive to what the man on the street would have thought, but this was an essential determination if there was to be a victory for common sense in this case. 

The outcome is that both proceedings can in theory continue, but the Greek action
is now pointless as any recovery will be automatically indemnified in England.

Commentary so far on the long-term impact of the ruling has focused on the point that it increases certainty and confirms that English settlements cannot be unravelled easily by a foreign jurisdiction. But is the position really as well shored up as many commentators would have us think? Looking at the detail of the case, it was actually a very close call. 

The critical question was whether the two arms of the dispute – ie, a) upholding the settlement agreement in contract, and b) seeking tortious damages effectively on the basis that the action that led to the agreement was tainted by fraud – were completely separate causes of action, or whether they were actually part of the same one.

The Supreme Court decided they were separate causes of action, which is the main reason it determined the case in the way that it did. But the facts would not have to be that different in another case for the court to come to a different conclusion, at which point we could well find ourselves in a similar position to where we were after the Court of Appeal’s decision in this case. For example, fraud could make the settlement voidable, or the jurisdiction in the settlement agreement might not be expressed as exclusive.  

Also, what gave this case extra dimension is the fact that damages for late payment by insurers are not available in England (unlike in Greece), whereas the Law Commission looks like it may change that.  

Further, not all settlement agreements will be subject to English law and jurisdiction: if they are subject to another law or jurisdiction, all the questions that were examined in the chain of proceedings we saw in the Starlight case might be viewed differently elsewhere, in any country in the EU.

Yes, it certainly is good news that we have some more certainty about the integrity of settlement agreements in England, but perhaps this is not the last word we have heard on these issues.

Jonathan Bruce is a partner at Holman Fenwick Willan