ELF Oil UK Ltd & Anor v Besiktas Denizcilik VE Tasimacilik Sanayi VE Ticaret AS & Ors

Under the Civil Procedure Rules, an application made after the ordinary service period can succeed only if the claimant took all reasonable steps to serve the claim form but was unable to do so, and acted promptly in applying for an extension. Claimants must address service at an early stage. Once service within the jurisdiction is unavailable, reasonable steps ordinarily require a prompt application for permission to serve out. A mistaken belief about the applicable service period does not excuse delay. Early notification, investigation of the claim, absence of prejudice and a possible contractual extension of the limitation period do not displace these procedural requirements.

Two related cargo-damage claims against shipowners were commenced by claim forms issued on 1 December 1999, shortly before the contractual Hague Rules time limit expired. The forms were marked for service within the jurisdiction and were not served within the four-month period. Toulson J granted ex parte extensions on 1 June 2000. Judge Chambers QC later set those orders aside after the shipowners became aware of the true reasons for the delay. The claimants renewed applications for permission to appeal. The central issue was whether the requirements in CPR 7.6(3)(b) and (c) had been satisfied.

The renewed applications for permission to appeal were refused.

1. CPR 7.6(3) imposed the relevant cumulative conditions. After expiry of the ordinary service period, the claimants had to show both that they had taken all reasonable steps to serve the claim forms but had been unable to do so, and that they had acted promptly in applying for an extension.

2. The claimants had not taken all reasonable steps. They delayed in addressing service after issuing the claim forms. Once the shipowners’ response of 16 February 2000 made clear that English solicitors would not accept service, the claimants should promptly have applied for permission to serve out of the jurisdiction or otherwise taken effective steps to serve. The endorsement that the forms were not for service out did not excuse inaction.

3. The claimants had also failed to act promptly. They addressed the likely duration of service in Turkey only on 22 March, did not obtain instructions to seek an extension until 15 May, and made the application on 1 June. The mistaken belief that six months were available was neither a reasonable nor a relevant excuse. Compliance had to be assessed by reference to the actual four-month period, which expired on 31 March.

4. The surrounding commercial circumstances had limited relevance to this procedural question. Early notification of the cargo claim, the shipowners’ investigation, the absence of apparent prejudice and the possibility that the contractual time limit might commonly be extended did not satisfy CPR 7.6(3). Absence of prejudice was principally relevant to discretion rather than jurisdiction.

5. It was unnecessary to decide the separate non-disclosure issue. The lower court had not set aside the ex parte orders solely because of non-disclosure, but because the procedural conditions were not met and the orders were properly subject to review. There was no real prospect of a different result on appeal.

1. Court of Appeal (Civil Division): Lord Justice Mance refused the renewed applications for permission to appeal: [2001] EWCA Civ 822.
2. High Court, Commercial Court: On 15 December 2000, Judge Chambers QC set aside the ex parte extensions of time for service granted by Toulson J.
3. High Court, Commercial Court: Toulson J had granted extensions of time for service on 1 June 2000 without notice to the shipowners.