UK: (Re)Insurance Weekly Update 23- 2016

Last Updated: 6 July 2016
Article by Nigel Brook
Most Read Contributor in UK, September 2017

This week's caselaw

ADM Asia- Pacific v PT Budi Semesta: Court declines anti-suit injunction on ground of delay, where foreign court originally declined jurisdiction

The parties entered into an agreement containing a London arbitration clause, which allegedly governed their subsequent dispute. The defendant commenced proceedings in Indonesia (which were not served on the claimant for over a year). In the meantime, the claimant commenced arbitration in London. The claimant subsequently challenged the jurisdiction of the Indonesian court and also defended the claim (which did not amount to a submission to the jurisdiction). At first instance the Indonesian court held that it did not have jurisdiction, but this was reversed on appeal (and the claimant is appealing that decision to the Indonesian Supreme Court). At that point, the claimant applied to the English court for an anti-suit injunction restraining the Indonesian proceedings.

The recent cases of Ecobank Transnational v Tanoh (see Weekly Updates 25/15 and 1/16) and Essar Shipping v Bank of China (see Weekly Update 42/15), have confirmed the principle that those who seek an anti-suit or anti-enforcement injunction should act promptly, and not await the outcome of a challenge brought in the foreign court. An argument by the claimant that that was the wrong approach was rejected by Phillips J.

The claimant then argued that the court's discretion should be exercised in its favour because it was not to blame for all of the delay in bringing the anti-suit injunction. The judge agreed that the claimant could not be criticised for not applying prior to being served with the Indonesian proceedings. However, "the task for the Court is not to look at periods of delay and attribute blame for them, but to consider whether the application was made promptly and how far, and with what consequences, the foreign proceedings have progressed". Accordingly, the delay during the time when the Indonesian courts had declined jurisdiction should still be taken into account. The claimant had sought to argue that it could not be criticised for failing to apply for the injunction in the period between the time the Indonesian courts declined jurisdiction and the time they reversed that decision. However, Phillips J said that it should have applied for the injunction as soon as it was served with the Indonesian proceedings.

Zumax Nigeria v First City Monument: The Court of Appeal considers whether there had been a submission to the jurisdiction

Proceedings were issued against and served on a Nigerian defendant. The defendant applied to challenge the jurisdiction of the English courts. Before that application was made, it made an application for the disclosure of bank records under section 7 of the Bankers' Book Evidence Act 1879. One of the issues in this case was whether the defendant had submitted to the jurisdiction of the English courts by making the application for disclosure. At first instance, the judge held that the defendant had submitted. The Court of Appeal has now reversed that finding.

The Court of Appeal noted Patten J's view in SMAY Investments v Sachdev [2003] that unequivocal conduct is needed to demonstrate a waiver of a challenge to jurisdiction where a defendant has acknowledged service but the time for challenging jurisdiction has not yet expired (a defendant will not be taken to have submitted to the jurisdiction of the court merely because he has acknowledged service for the purpose of disputing the court's jurisdiction to try the claim). It held that the same approach should be adopted where an application challenging jurisdiction has been made but not yet heard.

It further held that there was no such unequivocal conduct here. Instead, the documents which the defendant sought would have been relevant to its application challenging jurisdiction.

High Commissioner for Pakistan v Prince Mukkaram Jah: Court confirms limitation period for restitutionary claims

Where money is paid by mistake, a claim for restitution might be brought in equity. There has been difficulty in determining the limitation period for bringing a restitution claim, though, because this is not specifically dealt with in the Limitation Act 1980. The issue arose in this case.

Henderson J held that the point had been decided by the Supreme Court in Aspect Contracts v Higgins [2015]. There it was held that, in relation to a cause of action which arises from payment, "for this purpose, an independent restitutionary claim falls to be regarded as "founded on simple contract" within section 5 of the Limitation Act 1980" (section 5 provides that "an action founded on simple contract shall not be brought after the expiration of 6 years from the date on which the cause of action accrued").

Henderson J acknowledged that Professor McGee in his work on Limitation Periods cast doubt on section 5 applying to an action for money had and received, and said that "if the matter were free from authority, I would have much sympathy with that view, the force of which is indeed acknowledged by Hobhouse J in the Sandwell case and the restitution scholars to whom I have referred". However, the judge noted that Professor McGee's discussion on the topic pre-dated the Aspect decision and so he held that the Aspect case "seems to me conclusive".

Pawar v JSD Haulage: Part 36 offers and appeals

In this personal injury claim, the claimant was awarded damages at trial but on appeal his award of damages was increased. The defendant made two Part 36 offers, both of which the claimant rejected. The claimant failed to beat either offer at trial. However, following the appeal he beat the first Part 36 offer, but not the second. The respondent accepted that the costs order below had to be amended to reflect that the claimant had beaten one of the Part 36 offers. The respondent also conceded that the rules governing Part 36 offers apply to the costs of the proceedings in which they are made, not the costs of the appeal. Nevertheless, the respondent sought to argue that the Part 36 offers could be taken into account under CPR r44 (in particular the Part 36 offer which was not beaten), when assessing who is the real winner on the appeal (ie if the claimant had accepted the second offer, he would have been substantially better off).

That argument was rejected by the Court of Appeal. The second offer had no longer been open for acceptance and so, in order to improve his position, the claimant had had to pursue the appeal. Furthermore, he had already been penalised in costs for failing to accept that offer.

(Re)insurance Weekly Update 23- 2016

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