GULF AZOV SHIPPING CO. LTD. AND ANOTHER v. IDISI AND OTHERS [2001] EWCA Civ 491

A damages tribunal must do its best on the admissible evidence, particularly where the opposing party had an opportunity to produce contrary evidence but failed to do so. An appellate court will not ordinarily reopen the tribunal’s factual assessment merely because the evidence was limited.

A party must challenge case-management decisions promptly. It cannot allow a lengthy substantive hearing to proceed and attack earlier evidential or cross-examination rulings only after judgment. Reasonable procedural control, including enforcement of directions and deadlines, is compatible with Convention rights.

Master Miller assessed damages for the wrongful detention of a vessel at £4,201,046 plus interest. The defendants sought permission to appeal, challenging the period and daily rate used to quantify loss, the Master’s reliance on the evidence admitted, restrictions on cross-examination and the treatment of their alleged loss of parts of a rig.

The defendants also invoked the Human Rights Act when challenging the Master’s control of the evidence and procedure. The central question was whether any proposed ground had a reasonable prospect of success.

1. Application for permission to appeal refused. Longmore LJ held that the proposed appeal disclosed no arguable ground, save for a limited adjustment which the respondents accepted. Brooke LJ agreed and concluded that the application had no reasonable prospect of success.

2. The Master was entitled to assess the vessel’s likely employment period on the available evidence. The defendants had been given an opportunity, under Langley J’s directions, to produce contrary evidence but chose not to do so. The Master therefore had to do his best with the claimants’ evidence and was entitled to adopt 577 days rather than the 642 days claimed. In light of the Court of Appeal’s substantive judgment, however, the respondents accepted that 14 days should be deducted because the vessel was arguably wrongfully arrested only from 22 August rather than 6 August. The court directed that deduction, with any mathematical question to be determined by the Master.

3. The proposed challenge based on the charterparty demurrage clause was unarguable. It was inappropriate to decide whether such a clause could constitute a penalty because the Master had not awarded the contractual rate of US$7,000 per day. He had instead selected US$4,855 per day after substantially reducing the claim.

4. The Master was entitled to enforce directions governing evidence and cross-examination. The defendants had failed to give the required notice that they wished to cross-examine. A party cannot permit a hearing lasting several months to proceed and then challenge an earlier case-management ruling only after judgment. The admission of further evidence concerning payments to Nigerian agents was likewise a matter for the Master’s procedural control, particularly as that evidence led to a reduction of the claim.

5. The Master was not required to examine the collection of affidavits used in earlier summary and default judgment proceedings. The governing directions required evidence for the damages assessment to be served within a specified time. Detailed objections concerning market comparables, protection and indemnity expenditure and proof of individual losses were matters for the Master’s factual assessment.

6. No allowance could be made for the alleged loss of parts of the rig. The defendants had deliberately chosen not to pursue that counterclaim in the English proceedings and had produced no supporting evidence before the Master. Brooke LJ added that Convention jurisprudence does not prevent a competent court from controlling its process reasonably and orderly.

1. Court of Appeal (Civil Division): Refused permission to appeal from the damages assessment. It nevertheless directed an agreed deduction of 14 days from the detention period.

2. Master Miller: Assessed damages for wrongful detention at £4,201,046 plus interest, using a detention period of 577 days and a daily rate of US$4,855.