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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> A&N Seaways and Projects PVT Ltd v Allianz Bulk Carriers DMCC [2025] EWHC 2126 (Comm) (13 August 2025) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2025/2126.html Cite as: [2025] EWHC 2126 (Comm) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (KBD)
AND IN THE MATTER OF THE ARBITRATION ACT 1996
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
SITTING AS A JUDGE OF THE HIGH COURT
____________________
| A&N SEAWAYS AND PROJECTS PVT LIMITED |
Claimant |
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- and – |
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| ALLIANZ BULK CARRIERS DMCC |
Respondent |
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| THE MV "BHARADWAJ" |
____________________
James Lamming (instructed by MFB Solicitors) for the Respondent
Hearing date: 27 June 2025
Further written submissions: 9 July 2025; 11 July 2025
____________________
Crown Copyright ©
HIS HONOUR JUDGE BAUMGARTNER:
Introduction
"(1) A person alleged to be a party to arbitral proceedings but who takes no part in the proceedings may question—
(a) whether there is a valid arbitration agreement,
(b) whether the tribunal is properly constituted, or
(c) what matters have been submitted to arbitration in accordance with the arbitration agreement,
by proceedings in the court for a declaration or injunction or other appropriate relief.
(2) He also has the same right as a party to the arbitral proceedings to challenge an award—
(a) by an application under section 67 on the ground of lack of substantive jurisdiction in relation to him, or
(b) by an application under section 68 on the ground of serious irregularity (within the meaning of that section) affecting him;
and section 70(2) (duty to exhaust arbitral procedures) does not apply in his case."
Section 70(3) of the 1996 Act provides that any application or appeal against an award must be brought within 28 days of the date of the award.[1] Here, the Claim Form was filed on 6 August 2024, i.e. on the twenty-eighth day following the making of the Award and so within time.
The Award
The Claim
"[Charterers challenge] the [Award]. The part of the [Award] challenged is the arbitrator's decision in paragraphs [34]-[38] that he had jurisdiction to determine the claim that [Owners] had presented in the reference to the arbitration. The grounds for the challenge are that the purported [Charterparty] was of no legal effect because it had been entered into by one of [Charterers'] two directors, Sashank Puria, without the authority of [Charterers]. The purported [Charterparty] was signed only by Mr Puria. There was no written resolution of [Charterers'] board of directors authorising [Charterers] to enter into the purported [Charterparty] and [Owners] would have been aware of the absence of any such resolution. [Charterers were] unaware of the actions of Mr Puria and of the purported [Charterparty] until it received a demand notice dated 10 October 2023 from [Owners]. [Charterers'] other director, James Richard Samuel, was unaware of the purported [Charterparty]. Accordingly there was no valid arbitration agreement between [Charterers] and [Owners]."
"would have been aware of the absence of any such resolution [i.e., a board resolution by Charterers authorising Mr Puria to enter the Charterparty]."
"It is pertinent to mention that there is no Board resolution from the [Charterers] granting authority to [Mr Puria] to make any independent decisions regarding the company's affairs, nor is there any Board resolution specifically authorizing any business dealings with the [Owners] to incur liabilities on behalf of the [Charterers]. It is further pertinent to note that there was a lack of due diligence on the part of the [Owners] when it entered the contract for the first time allegedly with the [Charterers] through [Mr Puria] and it did not also insist a Board Resolution [sic] from [Mr Puria]. These deficiencies on the part of the [Owners] give rise to concerns about the genuineness, validity and enforceability of the purported [Charterparty]. While there could have been multiple reasons for the collusion between the [Owners] and [Mr Puria], I understand upon enquiry that the vessel was likely idling and the opportunity to defraud the [Charterers] by using the idling vessel and that too at higher than market rates had driven the [Owners] to participate in the fraud with [Mr Puria]. Therefore, the said [Charterparty] was entered into between [Mr Puria] and the [Owners] without the knowledge and/or approval of the [Charterers] but in the name of the [Charterers] with a collusive and mala fide intention to defraud the [Charterers] and enrich themselves unjustly."
Procedural history
Strike-Out Application
(a) the absence of board approval, and the fact that Charterers did not carry any cargo on the Vessel;
(b) that all transactions, including financial transactions, were between Owners, Mr Puria, and SPG;
(c) the Vessel was delivered to SPG, rather than to Charterers;
(d) the absence of required documents, such as a local authority clearance certificate;
(e) the absence of board approval for SPG's nomination for raising invoices and remittances;
(f) Owners' failure to verify SPG's status, which would have disclosed that it was a partnership run by Mr Puria and not part of Charterers' group of companies;
(g) the absence of an amended fixture note in the name of SPG;
(h) the Owner's failure to take action against SPG;
(i) the Vessel being deliberately idled, docked, anchored, or delayed for a time exceeding the stipulated time in the Charterparty; and
(j) the failure to withdraw the Vessel at any earlier date in light of the non-payment of charges.
Amendment Application
"Particulars of Dishonesty
[Charterers aver] that the fraudulent bad faith alternatively dishonesty of [Owners] in entering into the [Charterparty] can be inferred from the following facts:
(a) [Owners] took no steps to confirm [Charterers'] board of directors had approved the execution of the purported [Charterparty].
(b) [Owners] agreed to the nomination by Mr Puria of [SPG] alternatively amendment to the [Charterparty] to place [SPG] in place of [Charterers] without confirming the legal status of [SPG] and its relationship with [Charterers].
(c) [Owners] accepted [SPG] as the guarantor of payment.
(d) The only payments made to [Owners] were made by [SPG]; no payments were made by [Charterers].
(e) Delivery of the vessel was in fact to [SPG] because [Charterers] did not take delivery.
(f) [Owners have] failed to provide proof of the valid delivery of the vessel in the form of clearance certificate from the relevant local authorities.
(g) There is no record of an addendum, a new contract or amended fixture note between [Owners] and [SPG] to permit payments from [SPG] to [Owners] through outward remittances, a regulated banking process, which required an amended fixture note in [SPG's] name.
(h) [Owners] did not withdraw the vessel prior to 22nd September 2023 despite the failures to pay hire charges and payment defaults. The vessel was deliberately idled, docked, anchored, or delayed for a period exceeding the time stipulated resulting in additional hire charges.
(i) [Owners] took no action against [SPG] notwithstanding the agreement by SPG to pay the hire charges.
Alternatively, on the basis of the same facts, [Owners were] or should have been aware that [Charterers] had not entered into the [Charterparty].
[Charterers] did not ratify the purported [Charterparty] and obtained no benefit from it because [Charterers were] entirely unaware of the existence of the [Charterparty] until 10 October 2023 and did not enter into any contracts to carry any goods on the vessel."
(1) out of time;
(2) defective, as showing no ground on which fraud can be inferred; and/or
(3) having no real prospects of success.
Amendment Application
Out of time
Legal framework
"The principles regarding extensions of time to challenge an arbitration award have been addressed in a number of recent authorities, most notably in Kalmneft v Glencore [2002] 1 Lloyd's Rep 128 , Nagusina Naviera v Allied Maritime Inc [2003] 2 CLC 1, L Brown & Sons Limited v Crosby Homes (Northwest) Limited [2008] BLR 366, Broda Agro Trading v Alfred C Toepfer International [2011] 1 Lloyd's Rep 243, and Nestor Maritime v Sea Anchor Shipping [2012] 2 Lloyd's Rep 144, from which I derive the following principles:
(1) Section 70(3) of the [1996 Act] requires challenges to an award under sections 67 and 68 to be brought within 28 days. This relatively short period of time reflects the principle of speedy finality which underpins the Act, and which is enshrined in section 1(a). The party seeking an extension must therefore show that the interests of justice require an exceptional departure from the timetable laid down by the Act. Any significant delay beyond 28 days is to be regarded as inimical to the policy of the Act.
(2) The relevant factors are:
(i) the length of the delay;
(ii) whether the party who permitted the time limit to expire and subsequently delayed was acting reasonably in the circumstances in doing so;
(iii) whether the respondent to the application or the arbitrator caused or contributed to the delay;
(iv) whether the respondent to the application would by reason of the delay suffer irremediable prejudice in addition to the mere loss of time if the application were permitted to proceed;
(v) whether the arbitration has continued during the period of delay and, if so, what impact on the progress of the arbitration, or the costs incurred in respect of the arbitration, the determination of the application by the Court might now have;
(vi) the strength of the application;
(vii) whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined.
(3) Factors (i), (ii), and (iii) are the primary factors."
The principles set out by Popplewell J quoted at [27(2)] of his judgment were ones first identified by Colman J in Kalmneft JSC v Glencore International AG [2001] 2 AER (Comm) 577, at [59] to [60], and are often referred to as the "Colman Principles".
(1) First, the claim form as issued within 28 days must be capable of standing on its own as a "complete, particularised statement of the case to be advanced": See section O3.2 of the Commercial Court Guide, and CPR r.62.4(1)(b). As Andrew Baker J said in Orascom TMT Investments Sàrl v VEON Limited [2018] EWHC 985 (Comm), at [5] (my emphasis):
"It is, with respect, insufficient in my judgment, although a common practice, merely to say in the Claim Form, beyond identifying the bare statutory essentials, that reference should be made to the supporting witness evidence. Witness statements served in support of a section 68 claim should contain evidence, not comment or argument. They are not the proper vehicle for setting out the analytical case to be advanced before the court; that should properly be done by way of statement of case. In circumstances where the procedure for section 68 challenges, as for that matter section 67 challenges, does not involve, unless specifically ordered in a particular case, an exchange of statements of case separate to the Claim Form, the Claim Form has to serve that purpose."
The same is true in respect of a s.72 challenge, given it is made by way of service of an N8 Claim Form.
(2) Second, it must be the claimant's whole case, not merely a part thereof or a placeholder. The parties are entitled to know the specific grounds which are to be advanced in challenge to an arbitration award: see Leibinger v Stryker Trauma GmbH [2006] EWHC 690 (Comm), at [31] to [33] per Cooke J.
(3) Third, evidence must be contained in the arbitration claim or filed at the same time: CPR r.8.5(1), (7). No written evidence may be relied on at the hearing of the claim unless it has been served in accordance with this rule, or the court gives permission: CPR r.8.6(1).
(4) Fourth, any allegations of fraud must be pleaded squarely and fairly, not in a mealy-mouthed way. This is not a requirement specific to arbitration claims but applies more widely: see Three Rivers District Council v Governor and Company of the Bank of England (No.3) [2003] 2 AC 1, per Lord Millett at [184] et seq.; and JSC Bank of Moscow v Kekhman [2015] EWHC 3073 (Comm), per Flaux J (as he then was) at [20]. In Playboy Club London Ltd v Banca Nazionale Del Lavoro SpA [2018] EWCA Civ 2025, Sales LJ (with whom Gloster LJ agreed) said this (at [46]):
"The pleading of fraud or deceit is a serious step, with significance and reputational ramifications going well beyond the pleading of a claim in negligence. Courts regard it as improper, and can react very adversely, where speculative claims in fraud are bandied about by a party to litigation without a solid foundation in the evidence. A party risks the loss of its fund of goodwill and confidence on the part of the court if it makes an allegation of fraud which the court regards as unjustified, and this may affect the court's reaction to other parts of its case. Moreover, as Birss J observed in Property Alliance Group v Royal Bank of Scotland [2015] EWHC 3272 (Ch) at [40], allegations of fraud 'can cause a major increase in the cost, complexity and temperature of an action.' For these reasons parties are well-advised, and indeed enjoined according to usual pleading principles, to be reticent before pleading fraud or deceit."
"As the defendant points out, the claimants seek to undermine and circumvent the statutory time limits provided by Section 70(3) of the 1996 Act by issuing a Claim Form without detailed particulars and without evidence and then making an application to file and serve detailed particulars and written evidence 72 days after the statutory deadline, after serving those particulars and evidence some eight weeks after that deadline. These are not short periods in the context of the 28 day period allowed by statute. The public policy which underlies arbitration and the finality of awards means that extensions of time, particularly on a retrospective basis, are not lightly given. Section 73(2) of the 1996 Act provides that where an arbitral tribunal decides that it has jurisdiction and a party who could have questioned that ruling by challenging the award does not do so within the time allowed by the statute, 'he may not object later to the tribunal substantive jurisdiction on any ground which was the subject of that ruling'. Whilst this is not a case where the Claim Form was issued out of time (as in Kalmneft JSC v Glencore International AG [2001] 2 AER (Comm) 577), the principles to be applied are not dissimilar as appears from the decision of Colman J in Westland Helicopters Limited v Sheikh Salah al-Hejailan (1) [2004] 2 LLR 523 at paragraphs 38-42."
"The parties are entitled to know the specific grounds which are to be advanced in challenge to an arbitration award not only because they must know the case to be met but also because they should know the extent to which what would otherwise be a valid award is challenged. One of the objectives of arbitral proceedings is to achieve the speedy determination of disputes. It is accordingly very important that time requirements prescribed by the Act are strictly complied with and only allowed to be departed from in exceptional cases. No reasonable excuse has been proffered to the court for the failure to plead the grounds now sought to be introduced at the time the Arbitration Claim Form was issued."
(1) the length of the delay: this is to be "judged against the yardstick of the 28 days provided for in the Act" (at [28]);
(2) whether the delay was reasonable: this requires an investigation into the reasons for the delay, and the onus is on the applicant to provide an explanation (at [29]) (my emphasis):
"In the absence of such explanation, the Court will give little weight to counsel's arguments that the evidence discloses potential reasons for delay and that the applicant 'would have assumed' this or 'would have thought' that. It will not normally be legitimate, for example, for counsel to argue that an applicant was unaware of the time limit if he has not said so, expressly or by necessary implication, in his evidence. Moreover where the evidence is consistent with laxity, incompetence or honest mistake on the one hand, and a deliberate informed choice on the other, an applicant's failure to adduce evidence that the true explanation is the former can legitimately give rise to the inference that it is the latter.";
and
(3) whether the respondent or the arbitrator caused or contributed to the delay.
Discussion and analysis
"give rise to concerns about the genuineness, validity and enforceability of the purported [Charterparty]. While there could have been multiple reasons for the collusion between the [Owners] and [Mr Puria], I understand upon enquiry that the vessel was likely idling and the opportunity to defraud the [Charterers] by using the idling vessel and that too at higher than market rates had driven the [Owners] to participate in the fraud with [Mr Puria]. Therefore, the said [Charterparty] was entered into between [Mr Puria] and the [Owners] without the knowledge and/or approval of the [Charterers] but in the name of the [Charterers] with a collusive and mala fide intention to defraud the [Charterers] and enrich themselves unjustly."
As I mentioned at [?13] above, no evidence was filed by Charterers with the Claim Form on 6 August 2024. The fact that Owners were later served with Mr Samuel's witness statement does not, in and of itself, amount to a waiver on their part. Charterers could not force an election by so doing.
"Your duty to act with honesty and with integrity under CD3 includes the following requirements:
…
.2 you must not draft any statement of case, witness statement, affidavit or other document containing:
.a any statement of fact or contention which is not supported by your client or by your instructions;
.b any contention which you do not consider to be properly arguable;
.c any allegation of fraud, unless you have clear instructions to allege fraud and you have reasonably credible material which establishes an arguable case of fraud;
.d (in the case of a witness statement or affidavit) any statement of fact other than the evidence which you reasonably believe the witness would give if the witness were giving evidence orally; …"
"(i) Full and specific details should be given of any allegation of fraud, dishonesty, malice or illegality; and
(ii) where an inference of fraud or dishonesty is alleged, the facts on the basis of which the inference is alleged must be fully set out."
It is not for Owners to try and guess whether these allegations of fraud were ones that were being made by Charterers in the Claim Form. The sole basis for Mr Samuel alleging fraud is what he says was Owners' failure to insist on a board resolution from Charterers granting authority to Mr Puria to enter into the Charterparty. That, coupled with the other facts and matters upon which he relies to make out a case for fraud is, with respect, and in my judgment, insufficient to establish an arguable case of fraud. I return to this aspect below in considering Charterers' prospect of success.
"Insofar as the Claimant wishes to provide proper particulars, it must apply to amend its Claim Form. The Respondent's position on that, in particular in circumstances where a further application would be out of time, is reserved".
Defective, as showing no ground on which fraud can be inferred
Legal framework
"That all said, there remains some flexibility in allowing an element of freedom to a claimant alleging fraud to plead its case with the evidence and information then available, given that there might be concerns that the evidence against the defendant will not be readily available, at least possibly until disclosure and the exchange of evidence."
Discussion and analysis
"… it is not normal business practice to request to see board approval; indeed it would be highly unusual. … I do not consider that any lack of board approval would be relevant in any event, and consider that we were entitled to rely on Mr Puria, as a director of [Charterers] (a company with only 2 directors), when entering into the contract."
(1) in paragraph (d), which avers the only payments made to Owners were made by SPG, and no payments were made by Charterers. It is common ground that the hire payments made came from SPG, but there may well be many reasons why Owners could regard such an arrangement as unremarkable. Whatever arrangements Charterers and SPG had between themselves was a matter between them. Ultimately, Owners' contract was with Charterers, and it was to Charterers to whom they could (and did) look in the event payment from SPG was not forthcoming;
(2) in paragraphs (e) and (f), which aver delivery of the vessel was to SPG not Charterers, and the lack of a clearance certificate. Permission to charter the Vessel, however, was applied for and given by the Directorate General of Shipping, Mumbai, to Charterers, as the clearance certificate at p.1,270 of the bundle shows;
(3) in paragraph (g), which avers the lack of any documented agreement between Owners and SPG to permit payments from SPG to Owners. I do not understand the basis for or relevance of this pleading. Who would have required an amended fixture note? Why this would have been required? Neither of Mr Samuel's witness statements address these issues;
(4) in paragraph (i), which avers Owners took no action against SPG notwithstanding the agreement by SPG to pay the hire charges. Again, I cannot see how this supports a pleading of fraud. Owners pursued Charterers because Charterers were their contractual counterparty. As I have said, whatever arrangement Charterers had with SPG was a matter between them.
No real prospect of success
Legal framework
"48. … There is no point in giving permission for an amendment which is fanciful and which has no real prospect of success. In this regard the principal focus must be on the pleading in question and no attempt should be made to resolve disputed matters of evidence (conducting a mini-trial) … . It is, however, appropriate to consider whether a proposed pleading is coherent and contains properly particularised elements of the cause of action relied upon (Elite Property Holdings Ltd v Barclays Bank Plc [2019] EWCA Civ 204 at [42]).
49. Even if an amendment clears that initial hurdle and has a real prospect of success, whether to allow the amendment remains a matter of discretion. I would accept, however, that in general (and save perhaps in the case of 'very late' amendments) it is not appropriate to consider the strength or weakness of the claim as a factor relevant to that exercise of discretion, for the reasons given by the Master of the Rolls and Lord Justice Newey at [69] to [77] of their judgment.
Discussion and analysis
Conclusion
Strike-Out Application
Legal framework
"The test under CPR rule 3.4(2)(a) requires the court to be satisfied that the claim is 'unwinnable' where continuance of the claim is without any possible benefit to the respondent and would waste resources on both sides. … This sets a high hurdle for an applicant seeking to strike out a statement of case. There are some circumstances in which the applicant may not succeed in striking out a claim that is 'bound to fail' where the relevant area of law is subject to some uncertainty and is developing such that it is desirable that the facts should be found at a trial so that any further development of the law should be on the basis of actual and not hypothetical facts."
"The Court has power under rule 3.3(4) and/or rule 23.8(c) to dismiss any claim without a hearing. It is astute to do so in the case of challenges to awards under section 67 or 68 of the Act where the nature of the challenge or the evidence filed in support of it leads the Court to consider that the claim has no real prospect of success. If a respondent to such a challenge considers that the case is one in which the Court should dismiss the claim on that basis:
(a) the respondent should file a respondent's notice to that effect, together with a skeleton argument (not exceeding 15 pages) and any evidence relied upon, within 21 days of service of the proceedings on it;
(b) the applicant may file a skeleton and/or evidence in reply within 7 days of service of the respondent's notice."
Charterers' participation in the arbitral proceedings
"23. The cases therefore draw a distinction between protesting that the arbitration tribunal has no jurisdiction and asserting that the issue should be decided by some other court or tribunal and asking the tribunal to consider the issue of jurisdiction. In the latter case the party is likely to be held to have invoked the jurisdiction of the tribunal.
24. Sovarex sought to rely upon the obiter comment made in Broda Agro v Alfred C Toepfer [2011] 1 Lloyd's Rep 243 at 250, at [50] (Stanley Burnton LJ), where he said:
'It may be difficult to distinguish between a letter that does no more than inform the arbitral tribunal, as a matter of courtesy, that the respondent does not accept its jurisdiction, and a submission that it has no jurisdiction. This is such a case.'
25. … A 'submission' that the tribunal has no jurisdiction is made when you invite the tribunal to consider that issue and thereby invoke their jurisdiction to decide it."
"A party cannot have its cake and eat it: it must really elect at the outset to snub the process entirely, or to engage, and if the latter, any engagement at all will cost that party the right to apply under section 72."
Whether a party "takes no part in the proceedings" will all depend on the exact circumstances, and the correct interpretation of any such letter will depend upon the precise words used and the context in which they have been used.
Discussion and analysis
(1) on 22 November 2023:
"Please note that the appointment of arbitrator by your client to commence the arbitral proceedings is illegal since our client disputes the existence of the alleged Charter Party dated July 05, 2023 stated to have been executed by our client … Kindly advise your client to forthwith withdraw the initiation of arbitration under the alleged Charter Party";
(2) on 13 February 2024:
"The Sole Arbitrator was unilaterally nominated and wrongly declared as appointed at the instance of the Claimant without considering the responses sent by us on behalf of our client on October 26, 2023 and November 22, 2023. In the said responses, our client disputed the very existence of the purported Charter Party and called upon your client to forbear from initiating any arbitral proceedings. We once again reiterate our objections to the purported and wrongful constitution of the present Arbitral Tribunal which lacks jurisdiction over the alleged dispute between the Claimant and our client since the subject matter is non arbitrable for the reasons stated and reiterated below …
…
Therefore, in light of the aforesaid facts and circumstances, there is no valid dispute for the present Arbitral Tribunal to decide. The jurisdiction of the present Arbitral Tribunal is challenged and disputed as the subject matter is non-arbitrable and non-maintainable as against our client";
and
(3) on 26 February 2024:
"Therefore, our client requires three-week time extension to prepare and submit appropriate submissions/application before Mr. David Martin Clark, the Sole Arbitrator based on the opinion that our client procures from the counsel in London."
All this, Mr Bowen submits, was clearly a continuance of Charterers' protest that the Tribunal had no jurisdiction. He says it is significant to note that the arbitrator did not consider Charterers had taken part in the proceedings, because at [34] of the Award he says:
"As the Charterers have chosen not to participate in this reference …".
"1. We refer to your below interim response to the claim submissions of 17 January. We note that your clients deny liability and contest jurisdiction.
2. The next step is to inform the appointed arbitrator of the parties' respective positions, including your clients' jurisdictional challenge. As such we will write to the arbitrator with you in copy. Before we send that message, we have noted that your interim response is marked 'without prejudice'. We understand that to be a general reservation of all your clients' rights, including as to jurisdiction rather than an assertion of privilege over the contents of your clients' response to the claim submissions …
For the sake of good order, could you please confirm within Monday 19 February 2024, 4pm London to me, that your interim response is precisely that and is for submission to the Tribunal. We will write to the Tribunal after the aforementioned time and so look forward to your confirmation by then."
"Your understanding is correct as to the reservation of our rights regarding the arbitrability of the captioned dispute. We object to the initiation of arbitration proceedings itself including the appointment of a Sole Arbitrator by you.
We reserve all our rights to challenge the jurisdiction of the Arbitral Tribunal.
Please note that we have no objections in forwarding the interim response dated February 13, 2024 by you to Mr. David Martin-Clark, however, the same does not amount to our client's acceptance to submit itself to the arbitration proceedings initiated by you."
"Our client is currently in the process of obtaining a legal opinion from counsel in London.
Therefore, our client requires three-week time extension to prepare and submit appropriate submissions/application before Mr. David Martin Clark, the Sole Arbitrator based on the opinion that our client procures from the counsel in London."
No real prospect of success
Discussion and analysis
(a) Charterers were unaware of Mr Puria's actions and the Charterparty until they received Owners' demand notice;
(b) Mr Puria did not have Charterers' actual authority;
(c) Owners were aware or should have been aware Mr Puria did not have authority; and
(d) Charterers (rather than SPG) did not ratify the Charterparty and did not obtain any benefit from it.
Disposition
"… the failure of a case of fraud or dishonesty is a factor that the court may take into account in deciding on the basis of assessment but there is no automatic or rule that the making of such allegations which fail at trial will justify an order for indemnity costs or even operate as a starting point in the sense that the paying party is then required to explain why indemnity costs are not appropriate. It is also right to recall that the default position is that standard costs are to be paid unless the court orders otherwise."
I bear those cautionary words in mind.
(1) The Claim Form was filed without evidence of any kind and without sufficient particularisation, in breach of CPR r.8.5. No explanation was provided for this failure. Charterers instead sought to provide Mr Samuel's witness statement dated 26 September 2024 by way of reply evidence to Owners' Strike-Out Application, which was a waste of resource and costs. All that Mr Samuel had to say in his first witness statement could have been said by him when the Claim Form was issued on 6 August 2024, but it was not.
(2) The Amendment Application was (to use Miles J's words) "speculative, weak, opportunistic [and] thin": given no evidence was adduced (until the last-minute attempt) to explain the failure, I consider it was in fact a completely hopeless application. That is why I disposed of it at the hearing on 27 June 2025, giving an ex tempore judgment setting out in short my reasons so doing.
(3) Charterers advanced and aggressively pursued serious and wide-ranging allegations of dishonesty and impropriety in witness evidence. They were, in my judgment, entirely speculative. If Charterers had any complaint about the limit and extent of Mr Puria's authority as one of their two directors, they should have pursued him, not Owners.
(4) Despite the ex tempore judgment which I gave at the hearing that refusing to plead the allegations of fraud, Charterers sought to re-introduce those allegations in their further submissions in response to the Strike-Out Application.
(5) The allegations of fraud (and indeed the allegation of lack of apparent authority) are, for the reasons which I set out above, hopeless. I am satisfied that Owners entered the Charterparty in good faith and with the due diligence that was commercially reasonable in the circumstances. For that, they cannot be faulted in the way in which Charterers sought to do so.
Note 1 See Russell on Arbitration (Informa Law, 24th ed., 2015), at 8-061:
“Sections 67-69 are available to ‘a party to arbitral proceedings’. This refers to a person who takes part or continues to take part in the arbitration. [The phrase ‘a party to arbitral proceedings’ is also used in ss.24(1), 32, 36, 43(1), 73(2).] Such a person is to be contrasted with a person ‘alleged to be a party to arbitral proceedings but who takes no part’ under s.72(1). [London Steam Ship Owners Mutual Insurance Association Ltd v The Kingdom of Spain [2013] EWHC 2840 (Comm) at [82(3)]; Bernuth Lines Ltd v High Seas Shipping Ltd [2006] 1 All ER (Comm) 359 at [51].] Such non-participants are however given the right to challenge an award under ss.67 and 68, but not s.69, by virtue of s.72(2). By s.82(2) of the Act, a party includes any person claiming under or through an arbitration agreement.”
As the learned authors of Merkin and Flannery on the Arbitration Act 1996 (Informa Law, 6th ed., 2019), observe (at 72.5):
“as the words in section 72(2) refer to an applicant having ‘the same right’ as a party challenging an award under either section 67 or 68 (which implicitly includes the time limit in section 70(3)). By the express inclusion of the words ‘section 70(2) … does not apply’, the obvious inference is that the time limit in section 70(3) does apply.” [Back]