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Commercial Disputes Weekly – Issue 1344 October 2022

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"It is apparent… that these points of law are not only of considerable difficulty, but are potentially of considerable commercial significance."Fimbank plc v KCH Shipping Co, Ltd

The Commercial Court has confirmed that the time bar in the Hague-Visby Rules will apply to a claim for misdelivery of cargo after discharge. The cargo had been discharged into stockpiles at the port and FIMBank, who financed the cargo purchase, brought a claim against KCH as carrier for misdelivery from the stockpiles pursuant to delivery orders. FIMBank’s notice of arbitration was served more than a year after delivery took place or should have taken place but its arguments to disapply the one year time bar failed. The application of the time bar to misdelivery claims after discharge gave finality and avoided fine distinctions as to when discharge ended. The parties had contractually applied the Hague-Visby Rules to any bill of lading issued under the charterparty so the Rules were intended to apply to all rights and liabilities under the bills, not just the carriage by sea aspects.
Fimbank plc v KCH Shipping Co, Ltd [2022] EWHC 2400 (Comm), 28 September 2022

Contract Interpretation
Where the terms of pre-emption rights following a share sale were ambiguous, the court took account of the context and commercial purpose. The content and structure of the agreement as a whole suggested that the purpose of the definition of ‘Disposal’ was not to exclude dispositions between connected parties or transactions not negotiated at arm’s length, but rather to include them. The contract contained other provisions (such as a good faith obligation) to protect Mr Munding from abusive or collusive conduct (without needing to exclude non arm’s length transactions from the definition). However, the terms of the property sale offered to the eventual buyer were more favourable than those offered to Mr Munding. As a result, Mr Munding’s pre-emption right was not extinguished and the title restriction would remain in place.
Fairhaven Shipping Company (UK) Ltd v Munding [2022] UKUT 260 (LC), 27 September 2022

The claimant in an UNCITRAL arbitration who was ordered to make an interim payment of US$250m to the defendants has failed to remove the tribunal on grounds of procedural irregularities and apparent bias. The procedural ruling and deferral of reasons were case management decisions within the tribunal’s remit and ‘not so odd that they lead one to suspect that the explanation for the oddness might be bias’ (as per guidance in Porter v Magill, 2002). The decision was manifestly fair to both sides and there was no serious or reasonable basis for an allegation of apparent bias. There was no evidence of a lack of substantive jurisdiction or that the tribunal had exceeded its powers and caused substantial injustice, and so the claims under sections 67 and 68 of the Arbitration Act 1996 also failed.
EGF v HVF and others [2022] EWHC, 16 September 2022 (the decision is not yet publicly available)

Proceedings and Notice
The Commercial Court has granted summary judgment in spite of the defendant’s non-attendance at the hearing. The dispute arose out of two interest rate swap transactions between an Italian company Dexia and Pesaro, a municipal authority in Italy. Pesaro commenced legal proceedings in Italy to set aside the transactions. Dexia commenced proceedings in England for declarations that the transactions were valid. Pesaro did not appear at the hearing of Dexia’s application for summary judgment. The court was satisfied that Pesaro had due notice of the hearings and the proceedings, that they had chosen not to appear and that it was appropriate and in the public interest to continue with the hearing in Pesaro’s absence. It then concluded that the transactions were governed by English law as an express choice and that various provisions of Italian law did not displace that choice. Pesaro had no real prospect of successfully defending Dexia’s claim on the ground that it was not governed by English law. The judge granted the various declarations sought.
Dexia Crediop SPA v Provincia di Pesaro E Urbino [2022] EWHC 2410 (Comm), 27 September 2022

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams:

Robert Fidoe
Rebecca Williams
Ryland AshCharles Buss
Dev DesaiSarah Ellington
Andrew HutcheonAlexis Martinez
Theresa MohammedTim Murray
Mike Phillips
Andrew Ward

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