Gulf Azov Shipping Company Ltd & Ors v IDISI & Ors

Permission to appeal an assessment of damages should be refused where the proposed grounds merely challenge the master’s evaluation of evidence, factual assessment, or case-management decisions for which the applicant failed to comply with directions. A party cannot allow a months-long hearing to proceed and then seek to reopen an evidential ruling after judgment. The assessing tribunal may confine the evidence to material properly served for the assessment and need not sift through unsorted evidence from earlier interlocutory proceedings. A court need not decide an abstract penalty issue where the impugned contractual rate did not determine the award. Procedural control exercised reasonably and orderly does not of itself engage a human-rights objection.

Gulf Azov Shipping Company Ltd & Ors, the respondents, obtained an assessment of damages by Master Miller in the sum of £4,201,046 plus interest. IDISI & Ors, the applicant defendants, sought permission to appeal.

The proposed appeal challenged the evidential basis for the period of hire, reliance on a demurrage clause, the refusal to permit cross-examination, and the exclusion of evidence used in earlier proceedings. Subsidiary complaints concerned market comparables, proof of parts of the claim, and the loss of parts of the rig. The central question was whether any ground disclosed a reasonable prospect of success.

Lord Justice Longmore delivered the judgment, with Lord Justice Brooke agreeing. The application for permission to appeal was refused. The respondents accepted that the damages assessment should be reduced by 14 days, because the vessel was wrongly arrested only from 22 August rather than 6 August. Any mathematical difficulty could be dealt with before Master Miller.

1. The Master had evidence from the claimants and the defendants had been given the opportunity to adduce contrary evidence. They chose not to do so. The Master therefore had to reach the best assessment possible on the evidence available. His reduction of the claimed detention period from 642 days to 577 days disclosed no arguable error.
2. The challenge to the demurrage clause was unarguable. The Master had not awarded the contractual rate of $7,000 per day, but a substantially lower rate of $4,855 per day. The court therefore declined to undertake the wider question whether the clause was a penalty.
3. The Master was entitled to prevent cross-examination where the defendants had failed to comply with directions requiring notice within a specified period. A party cannot allow a hearing lasting several months to proceed under that case management decision and then challenge it after judgment. The same applied to further evidence concerning payments to Nigerian agents.
4. The Master was not required to consider a collection of affidavits and other evidence from the summary judgment and default judgment proceedings which had not been organised for the issues arising on the assessment. The directions for the assessment governed the evidence to be considered.
5. Complaints about the absence of a true market, the use of comparables, and the lack of detailed vouchers were matters for the Master in exercising his jurisdiction. No allowance could be made for the lost parts of the rig where the defendants had chosen to pursue their counterclaim elsewhere and had supplied no evidence on that issue.
6. The reference to the Human Rights Act did not assist the applicant. A court of competent jurisdiction may control its process in a reasonable and orderly manner.

1. Court of Appeal (Civil Division): In [2001] EWCA Civ 491, permission to appeal was refused. The court directed that 14 days be deducted from the damages assessment.
2. Assessment before Master Miller: Damages were assessed at £4,201,046 plus interest, after the Master reduced the claimed detention period and assessed the loss on the evidence before him.