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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Braceforce Warehousing Ltd v Mediterranean Shipping Company (UK) Ltd [2009] EWHC 3839 (QB) (04 June 2009) URL: http://www.bailii.org/ew/cases/EWHC/QB/2009/3839.html Cite as: [2009] EWHC 3839 (QB) |
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QUEEN'S BENCH DIVISION
Strand London WC2A 2LL | ||
B e f o r e :
____________________
BRACEFORCE WAREHOUSING LIMITED |
Claimant | |
- and – |
||
MEDITERRANEAN SHIPPING COMPANY (UK)
LIMITED |
Defendant |
____________________
101 Finsbury Pavement London EC2A 1ER
Tel No: 020
7422 6131 Fax No: 020 7422 6134
Web: www.merrillcorp.com/mls Email:
mlstape@merrillcorp.com
(Official Shorthand Writers to the Court)
MR CALUM LAMONT (Instructed by Hammonds LLP) appeared
on behalf of the DEFENDANT
____________________
Crown Copyright ©
MR JUSTICE RAMSEY:
Introduction
Background
"Save where otherwise provided if any dispute shall arise between the parties hereto with respect to the rights duties or liabilities of either party under or by virtue of or arising out of or in consequence of this Agreement (other than the construction or interpretation of this Agreement on points of law) the matter or difference shall be determined by an expert to be agreed between the parties, or failing agreement to be appointed on the written application of either party by the President for the time being of the Royal Institution of Chartered Surveyors whose decision shall be final and binding on the parties and whose costs shall be borne by the parties as directed by the expert or in default of such direction equally between the parties."
"In default of the parties reaching an agreement in respect of the dispute, the dispute will have to be referred to expert determination under the terms of the Agreement for Lease.
It is possible under the relevant provisions governing limitation of liability for actions under English law that the limitation period in respect of the dispute might expire on 5 December 2007. Without prejudice to MSC's contention that limitation might expire on 5 December 2007 and reserving the rights on behalf of MSC to contend that the limitation period might expire on a date other than 5 December 2007, the parties have mutually agreed to extend the limitation period. This extension has been agreed upon the terms below in order that the parties may seek to resolve the dispute without the need to refer the dispute to expert determination.
The parties agree so as to bind them and any successors or assignees as follows:
(1) that the limitation period in respect of all causes of action arising out of the dispute including but not limited to any contractual breach of covenant claim is hereby extended by one year to 6 December 2008.
(2) that in the event that any proceedings are issued from the date of this letter up until 6 December 2008 that Braceforce will not raise any limitation defence in answer to the claim."
That letter was signed by the claimant on 16 November 2007, confirming agreement to the matters set out in it.
"…the parties are in the first instance to attempt to agree on the appointment of an expert to hear the dispute. In this regard MSC would propose engaging Mr Barry Milton to hear the dispute, a copy of Mr Milton's curriculum vitae is attached by way of information ... Please provide your comments on Mr Milton's appointment and confirmation as to whether Mr Milton's appointment is agreed by close of business on 5 December 2008. In circumstances where no response is received by this date and/or agreement on the identity of an expert is unlikely to be reached between the parties, MSC will proceed to make the appropriate application to the RICS in accordance with clause 24 of the agreement."
"In light of the current circumstances MSC requests that Braceforce enter into a further Standstill Agreement in the same form and content save for an extension of one year. Braceforce is required to confirm whether it is agreeable to entering into a further standstill agreement by close of business on 26 November 2008. In the event that confirmation is not received from Braceforce by this date, MSC will have no option but to issue protective legal proceedings in the Courts."
"The Claimant claims against the Defendant for breach of the Agreement for Lease made on 6 December 2001 between (1) the Defendant and (2) the Claimant, as more fully set out in the claimant's letter to the defendant of 19 November 2008, with damages to be assessed."
It appears the reference should probably have been to the letter of 24 November 2008.
"Our Client's legal advisers have referred us to a letter that was written by Messrs Hammonds to our clients of 14 November 2007, a copy of which is enclosed. As you will observe, the letter refers to the matter of statutory limitation, a matter which may not fall within the provisions of Clause 24 of the Agreement for Lease.
It has been suggested that as there may be a question arising on jurisdiction and that before taking part in the process that the matter of jurisdiction should be resolved as a preliminary matter prior to my client's consideration of any substantive response."
"(1) Any application or claim by the Respondent to the court concerning my jurisdiction shall be brought not later than 27 April 2009.
(2) The Respondent shall either provide a copy of any application made to the applicant and to me immediately upon it being lodged with the Court and confirm not later than 1 May 2009 that its challenges to my jurisdiction are withdrawn.
(3) If no such application or claim is brought the Respondent shall provide its substantive response not later than 5 June 2009."
The Issues
(1) that by the letter dated 14 November 2007 the parties extended the limitation period to 6 December 2008 and that the right to refer the dispute for expert determination under clause 24 of the agreement expired on 6 December 2008;
(2) that there is no right to extend time for commencement of expert determination and the expert determination was commenced out of time because it was not commenced by the letter of 24 November 2008 but by the application to the RICS of 8 December 2008;
(3) that, in any event, the parties have agreed to litigate the dispute by service of the Part 7 Claim form, by the claimant acknowledging service and by requesting and being granted an extension of time for the Defence, alternatively, that this amounts to an election by the defendant for the matter to be litigated;
(4) that litigation has been commenced and there is a substantial dispute valued at £3.7 million which, in any event, is more appropriately dealt with in the court and that the court should stay the expert determination while the court determines the dispute.
(1) that the expert has been properly appointed and has jurisdiction because the letter of 14 November 2007 did not impose any limitation by way of time bar where one was not included in clause 24 but extended the limitation period for proceedings and, in any event, the 24 November 2008 letter commenced the expert determination;
(2) the claimant is estopped from raising jurisdictional challenges or has waived such challenges by not raising the matter with the expert until 30 March 2009;
(3) the court should stay the court proceedings until it is seen whether points on construction of contracts which cannot be dealt with under the expert determination under clause 24 arise, when the stay can if necessary be reconsidered.
Jurisdiction of the expert
"In light thereof and given the continued deterioration of the property necessitating immediate attention, MSC is left with no option but to activate the formal dispute resolution machinery under the Agreement."
The court proceedings
"Having made this choice I believe that it is in accordance not only with the presumption exemplified in the English cases cited above that those who make agreements for the resolution of disputes must show good reasons for departing from them, but also with the interests of the orderly regulation of international commerce that, having promised to take their complaints to the experts and if necessary to the arbitrators, that is where the appellant should go. The fact that the appellants now find their chosen method too slow to suit their purpose is, to my way of thinking, quite beside the point."