Shipping tycoon may have to foot the bill

Roger Pearson reports an Appeal Court ruling that a Greek shipping tycoon can be called to account for a £2.5m legal bill.

The Appeal Court has ruled that a Greek shipping tycoon can be held personally liable for a £2.5m legal bill, even though he was not a named party in a claim against his company.

Prudential Assurance has been given the go-ahead by the Court of Appeal to continue court action in a bid to recover the court costs from a Greek resident who was the principal owner of a Panamanian company with which Prudential was in dispute in respect of a ship which was destroyed by fire.

The case concerned a claim by the owner of the MV Ikarian Reefer for compensation from her hull and machinery underwriters, of which Prudential was the lead underwriter.

The claim followed the total destruction of the ship by grounding and fire in 1985. Prudential, however, argued that the vessel had been deliberately cast away by her owner.

In the High Court Mr Justice Cresswell found in favour of the claimant.

But in December 1994, following a 30-day hearing, the Court of Appeal ruled that the vessel had been deliberately run aground and then set on fire on the authority of her owner. Prudential was awarded its costs – estimated at some £2.5m – in respect of both the Appeal Court and High Court actions.

This July, in a bid to recover the amount, Prudential won a High Court order that Constantine Comninos, the principal owner of the Panama company, should personally pay its costs. However, the order was challenged by Comninos on the grounds that the English court had no jurisdiction nor could it assume jurisdiction over him.

But the Appeal Court ruled that the English court did have jurisdiction over a party which was not domiciled in England and Wales and is entitled to rule on whether that party has had sufficient connection with proceedings in the English court that he should pay the costs, even though he was not actually named as a party.

Lords Justices Simon Brown, Waller and Tuckey ruled that if the connection alleged was that the non-party was in fact the alter ego of a party being sued, the English court had jurisdiction to decide the question and to decide whether the non-party had in effect submitted to the English jurisdiction.

Waterson Hicks acted for the appellant and Ince & Co for Prudential.