Universal Africa Lines BV v Knidos Shipping Corporation [2025] EWHC 770 (Comm) (18 February 2025) [ Home ] [ Databases ] [ World Law ] [ Multidatabase Search ] [ Help ] [ Feedback ] [ DONATE ] England and Wales High Court (Commercial Court) Decisions 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) [ New search ] [ Printable PDF version ] [ Help ] Neutral Citation Number: [2025] EWHC 770 (Comm) Case No: CL-2025-000065 IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES COMMERCIAL COURT (KBD) 7 Rolls Buildings Fetter Lane London EC4A 1NL 18 February 2025 B e f o r e : HIS HONOUR JUDGE PELLING KC (Sitting as a Judge of the High Court) ____________________ UNIVERSAL AFRICA LINES BV Applicant - and - KNIDOS SHIPPING CORPORATION Defendant ____________________ Digital Transcription by Epiq Europe Ltd, 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) ____________________ MR S SNOOK (instructed by Reed Smith) appeared on behalf of the Applicant The Defendant did not attend and was not represented ____________________ HTML VERSION OF JUDGMENT (APPROVED) ____________________ Crown Copyright © WARNING: reporting restrictions may apply to the contents transcribed in this document, particularly if the case concerned a sexual offence or involved a child. Reporting restrictions prohibit the publication of the applicable information to the public or any section of the public, in writing, in a broadcast or by means of the internet, including social media. Anyone who receives a copy of this transcript is responsible in law for making sure that applicable restrictions are not breached. A person who breaches a reporting restriction is liable to a fine and/or imprisonment. For guidance on whether reporting restrictions apply, and to what information, ask at the court office or take legal advice. JUDGE PELLING: This is an application made without notice for a freezing order in aid of arbitration proceedings that have been commenced by the applicant in London under the London Maritime Arbitrators Association general rules. Those rules do not permit an arbitral tribunal to grant freezing relief. Therefore, an application was made by the applicants to the arbitral tribunal for permission to commence this application in accordance with section 44 of the Arbitration Act. That permission was granted and therefore the application is one which is properly brought under the Arbitration Act 1996 and in accordance with the limitations imposed by the Act. The circumstances leading to the application can be relatively shortly stated. The defendant is a one ship company registered in Panama that owned a ship called the Knidos ("vessel"), that was, as I understand it, registered in Panama as well. The defendant chartered the vessel to the claimant on a time charter basis and in its capacity as time charterer, the claimant then sub-chartered the vessel to Cargill BV for the purposes of carrying a cargo of cocoa beans from Ghana to the Netherlands. There were bills of lading issued at the load port in respect of the cargo under which the claimant was the contractual carrier, the consignor was the local company supplying the cocoa beans, and Cargill was the consignee. The cargo having been loaded, the vessel then sailed to the Netherlands where it was unloaded in the ordinary course. Following completion of the discharge of the vessel, it was found that a portion of the cargo of beans had suffered heat and smoke damage caused, so it is alleged, by a part of the cargo coming into contact with a hot sodium light used to illuminate the hold into which the cargo had been loaded. The claimant alleges that the light should have been extinguished as the cargo being loaded into the hold reached the light but it was not, but on the contrary, on the balance of probabilities, was left on after the cargo had passed the level of the light in the hold and may even have been left on for much if not all of the voyage to Rotterdam. As I have said, following the discharge of the vessel, the problem with the cargo was discovered and proceedings were commenced by the consignees in Rotterdam for the purposes of arresting the vessel in order to secure the cargo claim. The vessel was arrested and on 18 June 2022 security was posted by the relevant P&I club in respect of the cargo damage claim initially in a sum of about $9.3 million, later reduced to the value of about $4.5 million-odd and a smaller euro sum. About a year later, on 14 June 2023, Cargill and their insurers commenced proceedings in the Rotterdam District Court against the claimant as the contractual carrier under the bill of lading and also against the defendant as the actual carrier or in tort in accordance with the Dutch civil code. In those proceedings, Cargill claim $4.9 million-odd and €85,000-odd in respect of that alleged loss. Those proceedings are ongoing, but the position adopted by the claimant in these proceedings is that it intends to settle imminently the cargo claim with Cargill in the Netherlands on the best possible terms obtainable following receipt of Dutch legal advice concerning its liabilities in respect of that claim under the bill of lading. While all that was going on, on 17 April 2023 arbitration proceedings were commenced by the claimant against the defendant, pursuant to the charterparty between the claimant and the defendant. As currently constituted, the arbitration claim seeks a declaration that in the events that have happened, the vessel was unseaworthy and a further declaration that the unseaworthiness alleged was the cause or at least a cause of the cargo damage and a claim is also included for the claimant's legal costs. The allegation of unseaworthiness in summary and for reasons I explain in a moment it is not something I need take up a significant amount of time considering, is based on an allegation that the defendants failed to put in place a system which required the master, who had exclusive control of the key that had to be engaged before the lights in the hold could be switched on or off, to ensure that the lights in the hold were switched off as soon as a cargo reached the level of the light in the hold and to ensure that the light remained extinguished until unloading operations commenced, unless there were special reasons for illuminating the light. The defendant disputes in the arbitration that this is the correct analysis, maintaining that the claimant was responsible for loading operations, therefore was responsible for saying when the light should be switched off, and therefore no part of the responsibility for what occurred attaches to the defendant. As I have said, as things currently stand, the claim in the arbitral proceedings is for a declaration. However, the position adopted by the claimant, as I have indicated, is that it intends imminently to enter into negotiations for the purpose of compromising the Rotterdam proceedings and as and when those proceedings are concluded, the claimant proposes to amend the arbitration proceedings in accordance with its rights under the Interclub Agreement 1984 version, which allocates how cargo claims are to be dealt with as between owners and charterers under charterparties (such as the one relevant to this case) which incorporate that agreement. However, before that agreement can take effect, it is a condition precedent that the cargo claim, including any legal costs, shall have been "properly settled and compromised". In the event that the Rotterdam claim is settled and the arbitration proceedings are amended so as to include a money claim by reference to the ICA indemnity, whether the claim in Rotterdam has been properly settled or compromised will be an issue to be determined by the arbitrators, essentially, I suspect, by reference to the issues which are already pleaded concerning the alleged unseaworthiness of the vessel on the one hand, as against the defendant's counter allegation that the loss was caused by a failure on the part of the claimant to properly stow the cargo. 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. The vessel was insured by a Turkish maritime insurer and, as a result of the total loss to which I have referred, it is clear that a claim was to be made under the hull and machinery insurance policy by which the vessel was insured, such claim being made by the defendants. In consequence of that, correspondence was entered into by solicitors acting for the claimant, with solicitors appointed by the defendant to act on its behalf in relation to the arbitration concerning the provision of security in respect of the claim. The defendant initially suggested that an agreement could be entered into by which the security provided in respect of the Rotterdam claim could be discharged and at the same time new security provided by the defendant's P&I club in respect of the arbitration claim. Notwithstanding that by the defendant, no agreement has been reached as to how the insurance proceeds are to be dealt with. In those circumstances the claimants are concerned that the proceeds of the insurance of the vessel once received, will be dealt with by passing it up the line through the various subsidiaries to the entity that that ultimately owns the defendant, with the result that the claimant will be left with an arbitral claim and no ready means of enforcing the judgment. It was in those circumstances that the claimant approached the arbitrators for permission to make this application and that is why this application is before the court today. The vessel is registered in Panama. The existence of maritime mortgages over vessels registered in Panama is apparent from a search of the Panamanian registry. However, no such search has been carried out and so I am not in a position to say definitively whether the vessel was subject to a mortgage or not, and in any event, the register apparently does not disclose the value of any such mortgages. The key point that matters is that in the discussions which took place between the parties between September 2024 and February 2025, such as they were, it was not suggested that the ship was subject to a mortgage and thus that there was any prior call on the proceeds of the hull and machinery policy. In the course of the argument, I asked Mr Snook to address me on why it is that this application should be dealt with on a without notice basis, having regard to the extensive correspondence that passed between the parties relating to the provision of alternative security following the loss of the vessel since, as he rightly observes in his written submissions, the inevitable inference that would be drawn by any experienced London-based maritime solicitor from that correspondence is that an application of this sort would be made if satisfactory arrangements could not be made. The point which Mr Snook makes on behalf of his client is that anxious consideration was given to the question of whether at least short notice of this application should be given to the defendant, but the way in which the correspondence was conducted by the solicitors acting for the defendant on the instructions of the defendant gave rise to a very real concern that the defendant had engaged upon a  deliberate policy of delay and inaction for the purposes of buying itself time to receive the insurance proceeds and thereafter deal with it without any limitation, which might otherwise be imposed. Mr Snook submitted that those circumstances there was a real fear that the proceeds of the insurance policy were about to be received and, if notice were given of the application, then the benefit of the order would be lost. I accept that that is always an extremely difficult issue for an applicant on an application of this sort to address. I also accept that the applicant was entitled to act on the side of caution, since the consequence of getting the judgment wrong would have been the loss of any means in realistic terms of enforcing any arbitral award if and when it is obtained. I therefore accept the explanation offered by Mr Snook as to why this is an application is properly brought on a without notice basis. As he rightly observed in the course of his submissions, there is adequate protection made available to the defendant by permitting it to apply on short notice to vary or set aside the order and by what will be a relatively short return date. Against that background, I therefore turn to the application which has been made. The principles which apply in this area are now well-established. Following the decision of the Court of Appeal in Isabel dos Santos v Unitel SA [2024] EWCA Civ 1109 , the threshold test is whether there is a good arguable case available to the claimant on the merits. This reflected case law going back to the early 1980s and requires that a claimant seeking a freezing order is able to show a claim on the merits which is more than barely capable of serious argument, though not necessarily one which has a better than 50 per cent chance of success. I have already explained the parameters of the dispute between the claimant and the defendant. I need not take up any more time setting out the arguments of the parties. The case that the claimant seeks to advance so far as liability is concerned against the defendant, is supported by expert evidence from Brookes Bell as to the absence of an appropriate safety system for dealing with lights in the hold and that satisfies me that there is a good arguable case or as to the merits available to the claimant against the defendant. The next issue which arises, therefore, is whether there is a realistic risk of dissipation. The points which are made in relation to this are relatively straightforward. The first point is that the defendant is registered in Panama where there is limited open access information as to the financial assets of the defendant company and where there are real difficulties in enforcing judgments or awards, it is said. More pertinently, however, the point is made that if otherwise a risk of dissipation can be spelt out of the conduct of the defendant as a matter of inference, then the fact that the asset of the company is no longer a ship that is being traded in the ordinary course, but is a fund due to be received or possibly even now having been received from insurers a1curtely increases the risk faced by the claimant since it is inherently easy to transfer such a find and, of course, the defendant is a one ship company with no other assets. The real question, therefore, is whether a real risk of dissipation is to be inferred from the circumstances. So far as that is concerned, there is a significant run of correspondence between the solicitors acting for the parties, which commence with the suggestion that a claims handling agreement be entered into with broadly the effect outlined earlier in this judgment. That was a suggestion which came, as I have also said, from the defendant. Notwithstanding that is so, by 5 February 2025, agreement had still not been reached on the relatively simple and straightforward proposal being made and it is submitted on behalf of the claimant that in those circumstances, that is to say the lapse of time of getting on for two months, in combination with the failure to engage proactively most recently in the correspondence, leads relatively readily to the inference of a real risk of dissipation. The most recent piece of correspondence which is relevant for these purposes is an email from the claimant's solicitors to the defendant's solicitors of 5 February 2025. That is a lengthy email but the points that matter for present purposes are these. In paragraph 2 of that letter the claimant's solicitors rehearse that: "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. At paragraph 6 a further objection was addressed, namely that the claimant did not have any entitlement to security under the ICA 1984 addition referred to earlier in this judgment. Again, for the reasons identified by the claimant's solicitors, that point is of no substance, not least because the absence of a pre-entitlement to contractual security is not a reason for the refusal of a freezing order in this jurisdiction. The third point which was relied upon by the defendants and which the claimants addressed in the letter I am now considering, was a suggestion that the claim under the ICA had not yet crystallised. So far as that is concerned, the point which is made on behalf of the claimants and which was developed in some detail in the submissions, was that, as a matter of law, there is no requirement for the right to an indemnity to have crystallised at the time when an application for a freezing order is made- see Broad Idea International Ltd v Convoy Collateral Ltd [2021] UKPC 24  in which Lord Leggatt JSC, gave the lead judgment in those proceedings. Although that case was a Privy Council case concerned with an appeal from the BVI, there is nothing to suggest that the principles which are identified, which are all advanced by reference to established English legal principle, would not apply in relation to a freezing order sought from the English courts. The key point developed by Lord Leggatt starts at [99] of his judgment by drawing attention to the fact that the classical summary of the requirements in this area by Lord Diplock in Siskina (Owners of cargo lately laden on board) v Distos Cia Naviera SA ("The Siskina")  [1979] AC 210, did not mean that the conduct giving rise to the cause of action relied upon must already have occurred, because he contemplated a threatened invasion of a right. Lord Leggatt also drew attention to the fact that a freezing injunction is always concerned with conduct that lies in the future, and that the injunction is designed to pre-empt dealings in the future in assets which would frustrate enforcement of a judgment inevitably prospective at the time when the application is made. All this led to a summary of the relevant legal principles at [101] in the judgment in these terms: "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." Specifically in [102] of the judgment, Lord Leggatt noted that: "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)." In these proceedings the position is that whilst, as I have already explained, the ICA right to an indemnity has not yet arisen because the Rotterdam claim has not yet been settled, the claimant is imminently about to settle the Rotterdam proceedings on the basis of the legal advice it has received, at which point it will amend its proceedings in the London arbitration so as to include an indemnity in respect of the sums it has become obliged to pay under the settlement agreement it enters into with Cargill in the Netherlands. My concern at the outset of this case was that that was too uncertain in terms of when and whether the events which are relied on were to happen. Happily, however, the claimant by Mr Snook has been able to offer me an undertaking which will involve the imminent commencement of settlement negotiations with the claimant in the Rotterdam proceedings, an undertaking to proceed with those negotiations as quickly as is reasonably practical, and an undertaking within a fixed number of days, I suggest some either 7 or 14, to amend the proceedings in the arbitration, once a settlement is achieved, so as to include a claim for an indemnity. In those circumstances and returning to the terms in which Lord Leggatt formulated the applicable principles in Convoy Collateral (ibid), I am satisfied there is a sufficient degree of certainty that the right to bring proceedings for a monetary claim under the ICA will arise in the near future. In those circumstances, the point made by the defendant's solicitors in their correspondence that a claim under the ICA has not yet crystallised is neither here nor there. The further point that was considered in the correspondence was a suggestion that the settlement of a cargo claim in the Netherlands would be unreasonable. That is not an issue that arises in these proceedings. It is an issue which will ultimately have to be decided by the arbitrators but I can be satisfied on the basis of the evidence that has been filed, that the claimant will have a good arguable case, if it enters into a settlement with Cargill, that it will be a proper settlement because it will have been entered into on legal advice received in the Netherlands. No doubt the merits of that settlement can be enquired into by the arbitrators to the extent it is appropriate and necessary. As things stand, there has never been any suggestion that the claimant might have a defence to the claim in the Netherlands. The final point considered in the letter was a suggestion that there had been arbitrary deadlines set by the claimant's solicitors for the purposes of obtaining a response. I am satisfied for the reasons that have been identified by the claimant's solicitors that that is not an appropriate response to a failure to engage over a period of in excess of seven weeks with a proposed settlement against the background I have identified. It is important then to understand what the letter then went on to say. Insofar as is material it says this (from paragraph 11 and following): "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. The correspondence does not end there, however, because there was correspondence between the claimants' solicitors and the P&I club referred to in the correspondence from which I have just quoted concerning the provision of a letter of undertaking as an acceptable form of security. The relevant email response from the P&I club concerned is of 13 February 2025. Having rejected an allegation that it was somehow assisting its member to wrongly dissipate assets, the letter from the P&I club to the claimants' solicitors then continued in these terms: "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 ..." Thus the position is this. For a period of two months, the claimants by their solicitors have negotiated in good faith with the solicitors acting for the defendant in the arbitration for the purpose of putting in place some alternative security following the loss of the vessel which started with a proposal that emanated from the defendants themselves. Notwithstanding that was so, the defendants have failed to engage timeously with the process and most recently and following the email of 5 February, have failed to engage at all. Furthermore, it is clear from the correspondence from the P&I club from which I quoted a moment ago, that the defendants' P&I club was prepared to put up security but required the instructions of its member to do so and those instructions were not forthcoming. In those circumstances and returning to the test I have to apply, I have to ask myself whether there is a real risk of dissipation in the circumstances that have arisen. I am satisfied that there is such a risk. Whilst ultimately this conclusion is an inferential one, it is based on the facts and matters referred to above viewed collectively. The nature, location and liquidity of the assets that are available is plainly a relevant consideration, though probably not sufficient of itself to justify a conclusion that there is a risk of dissipation. However, as I have explained, the defendant no longer has a ship trading in the ordinary course of business around the world, but instead has the right to receive or the receipt of insurance monies following the loss of the vessel. A cash receipt by its nature is easily moved around the world and, in any event, the defendant is registered in Panama where enforcement proceedings are said to be likely to be more difficult than elsewhere. It formerly had only one asset namely the vessel and now has only a fund that can with ease be passed to the defendant's ultimate beneficial owner. The real point, however, is this. The way in which the correspondence took place between the solicitors acting for the defendant on the one hand and the solicitors acting for the claimant on the other, demonstrate an unwillingness to engage with a process which involves offering security in a way which will be relatively painless for all concerned. The failure to agree the terms of the agreement that was initially proposed by the defendant, the failure to instruct its P&I club to provide a letter of undertaking, the failure to respond at all to the email of 5 February, notwithstanding what is contained in it as quoted above, all lead me to conclude that there is a real risk of dissipation in the circumstances of this case. The final issue, therefore, that has to be considered is whether it is just and reasonable to make an order in the terms sought. There are two issues which I identified to counsel in the course of the argument which might be relevant for consideration under this particular part of the legal test that applies. The first is whether an order in more confined terms than a general freezing order would be appropriate, and the second is whether or not security in aid of the cross-undertaking should be provided, having regard to the fact that the claimant is a company registered in the Netherlands. So far as the first of these points is concerned, the point fairly made on behalf of the claimant is that, whilst the vessel may have been worth between $7 million and $8 million at the date of her loss, there is no evidence as to the amount of the insurance cover and no evidence as to the amount that has been agreed by way of settlement between the defendant and the insurers, nor any evidence that deals with any other assets that the defendant company may have, although the belief of all concerned is that it is and always was a one ship company. In those circumstances the point which is made on behalf of the claimant is if I am satisfied that there is a real risk of dissipation, then there is no good reason for limiting the order to the amount of the insurance monies, since there is no evidence that the company is trading at present and the risk of dissipation, if made out, would extend to all its assets and not merely the insurance money. I accept that submission for the purposes of this present application. The other issue concerns security. The concern is always that, although a cross-undertaking in damages is offered in the circumstances of this case, its benefits may be illusory if a judgment obtained from the English courts under the cross-undertaking turns out not to be readily enforceable where the claimant is centrally located. So far as that is concerned, the point which is made on behalf of the claimant is that it is a worldwide training company with a very substantial balance sheet which is positive, and more particularly, it is registered in the Netherlands where there are reciprocal enforcement arrangements in respect of judgments from the courts of England and Wales and the courts of the Netherlands, and in those circumstances, there is no real difficulty in enforcing any judgment that might be obtained under the cross-undertaking in damages. So far as that is concerned, , I have been offered an undertaking by the claimants to file evidence which confirms the points made in submission concerning the ready enforceability in the Netherlands of judgments obtained from the English courts and of there being no particular difficulty in enforcing a judgment from the English courts obtained pursuant to a cross-undertaking in damages. I accept the undertaking that evidence to that effect will be filed and on that basis I am content to proceed on the basis of the undertaking without its enforcement. In the circumstances, I propose to grant the orders sought. There are two final issues which needs to be dealt with. The first concerns service. The claimant seeks an order which provides for service by an alternative means, namely on the solicitors who act for the defendant in London in the arbitration as opposed to serving the proceedings on the defendant in Panama. So far as that is concerned, Panama is a Hague Service Convention state, therefore the default position is always that service should be in accordance with the Convention because, to do otherwise, is to circumvent the Convention rights of the state concerned. That said, however, the English case law recognises that in exceptional circumstances it will be appropriate to direct service by an alternative means and there are any number of cases decided at first instance level in the Commercial Court which establish as an exceptional reason for ordering service by alternative means on an entity registered in a Hague Convention state the making of an order of the sort that I propose to make in this case on the basis that it is important that a defendant against whom such an order is made, knows immediately that such an order has been made because of the nature of the order concerned and the coercive means by which it can be enforced, and secondly, because inevitably relatively speedy return dates are fixed for the redetermination of the application on a notice basis. In those circumstances and having regard to the fact that the solicitors acting for the defendant are fully engaged in the arbitration, have been fully engaged in the debate which has led ultimately to this application, I consider it appropriate in the exceptional circumstances that exist, to order service by an alternative means. The final point that remains is this. I have already indicated that this claim is worth a smidgeon short of $5 million. In the normal way this is a claim which, if started in the Commercial Court, will be transferred almost as a matter of course into the London Circuit Commercial Court. I will hear brief submissions from the counsel for the claimant as to whether that is appropriate in the circumstances of this case. Provisionally, however, I consider it is the appropriate course to take. This transcript has been approved by the Judge BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII URL: https://www.bailii.org/ew/cases/EWHC/Comm/2025/770.html