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England and Wales High Court (Commercial Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Universal Africa Lines BV v Knidos Shipping Corporation [2025] EWHC 770 (Comm) (18 February 2025) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2025/770.html Cite as: [2025] EWHC 770 (Comm) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
Fetter Lane London EC4A 1NL |
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B e f o r e :
(Sitting as a Judge of the High Court)
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UNIVERSAL AFRICA LINES BV |
Applicant |
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- and - |
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KNIDOS SHIPPING CORPORATION |
Defendant |
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Lower Ground, 46 Chancery Lane, London WC2A 1JE
Web: www.epiqglobal.com/en-gb/ Email: civil@epiqglobal.co.uk
(Official Shorthand Writers to the Court)
The Defendant did not attend and was not represented
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Crown Copyright ©
JUDGE PELLING:
9. So far this is a relatively straightforward cargo claim by a consignee with claims for an indemnity by a charterer against an owner. What has happened recently, however, has triggered this application for a freezing order. What happened is essentially this. As I have already explained, the defendant is a one ship company and therefore, as things stood until September of last year, the claim proceeded on the basis that the defendant had one asset, namely a ship, which on the information available to me had a value of between US $7 million and $8 million. On 9 September 2024, while the vessel was on passage in the Persian Gulf, it collided with another vessel and suffered damaged to her starboard quarter. The watertightness of the engine room was compromised. The crew abandoned ship and the vessel ultimately sunk in the Persian Gulf and became a total loss.
"Our discussions have not produced a solution to our concerns about your client's intentions with regard to the insurance proceeds it is due to receive following the casualty of the vessel. Indeed, those discussions have failed to make any meaningful progress since 18 December 2024 when we sent you a draft of the proposed claims handling agreement. This failure gives our client reasonable grounds to believe your client is engaged in delaying tactics. The CHA is only three pages long. Its intended purpose and effect is not complex, novel or in any way controversial, yet seven weeks after receiving it, you have provided no substantive comments on the draft. All that you can say after all this time is that you are 'reviewing and taking instructions' …"
The letter then goes on to address various issues raised in the course of the correspondence as to reasons why it may not be appropriate to provide security. That included at paragraph 5 the suggestion that the claimant had not posted any security to Cargill in the Dutch proceedings. As the solicitors who act for the claimant point out, that does not have any bearing on the entitlement of the claimant to a freezing order in this jurisdiction if otherwise the preconditions for the grant of such an order can be satisfied.
"In summary, a court with equitable and/or statutory jurisdiction to grant injunctions where it is just and convenient to do so has power - and it accords with principle and good practice - to grant a freezing injunction against a party (the defendant) over whom the court has personal jurisdiction provided that:
i) the applicant has already been granted or has a good arguable case for being granted a judgment or order for the payment of a sum of money that is or will be enforceable through the process of the court;
ii) the defendant holds assets (or, as discussed below, is liable to take steps other than in the ordinary course of business which will reduce the value of assets) against which such a judgment could be enforced; and
iii) there is a real risk that, unless the injunction is granted, the defendant will deal with such assets (or take steps which make them less valuable) other than in the ordinary course of business with the result that the availability or value of the assets is impaired and the judgment is left unsatisfied."
"There is no requirement that proceedings in which the judgment is sought should yet have been commenced nor that a right to bring such proceedings should yet have arisen: it is enough that the court can be satisfied with a sufficient degree of certainty that a right to bring proceedings will arise and that proceedings will be brought (whether in the domestic court or before another court or tribunal)."
"That leaves our client with a claim against a single asset company whose one tangible asset has been destroyed and has thus far displayed a singular unwillingness to commit to preserving the liquid and therefore easily transferrable funds it can expect to receive in the near future. That unwillingness and apparent refusal to engage in meaningful dialogue towards agreeing an arrangement, the intention of which is to give comfort to both parties, suggests to our client that your client is simply unwilling to give up its ability to dissipate the insurance proceeds so as to make itself judgment-proof.
If such an arrangement would create difficulties for the owner's business operations, please now set out what those problems are so that, if appropriate, we can consider ways to address those concerns. Absent any such explanation, our client will be entitled to conclude that our client's only real objection is that the proposals will prevent them dissipating assets. In the circumstances, our client will be making an appropriate application shortly and will be seeking an order for the costs of this exercise as against your client. To that end, we reserve the right to place this correspondence before the court at the appropriate time as may be necessary.
Without prejudice to any of the foregoing, our client is prepared to offer your client one last chance to come to the table with a suitable proposal. You already have our suggested wording on the proposed CHA and we would welcome your agreement to those terms or any reasonable amended terms forthwith. If this cannot be achieved, our client is open to any other proposal that would give our client the comfort that it seeks, eg, by way of an NS letter of undertaking. But in either event we must ask that we receive any firm proposals no later than Friday, 7 February 2025."
That letter has gone unacknowledged, with no response being received by the deadline identified in the letter. The 7 February date was two days from the date of the email containing the request.
"Any proposed claims cooperation agreement discussions between lawyers would always have been without prejudice and subject to instructions. That said, we have recommended to our member that we provide security, but there is no legal obligation to do so under the 1984 ICA or otherwise as you say. The reasons for the member's decision on this are clearly for them and we are not hiding behind instructions in saying so ..."