Navusina Naviera v Allied Maritime Inc

A lawyer who acted in an arbitration is not, merely by that role, a legal representative authorised to accept service of a separate court claim seeking permission to appeal. Service by fax requires authority in relation to the particular court claim and must be assessed objectively.

When extending the short time limit for an arbitration appeal, the court must consider delay, its explanation, the parties’ conduct, prejudice, merits and overall fairness. The policy of speedy finality in arbitration gives substantial weight to an unexplained delay. A respondent’s uncooperative but procedurally permissible conduct does not excuse an applicant’s independent failure to pursue service promptly.

The vessel owners sought permission to appeal from an interim arbitration award concerning a trip time charter. On the last day of the 21-day period prescribed by the Practice Direction—Arbitration, they issued a Part 8 claim form and faxed a copy to the charterers’ protection and indemnity club. The club’s in-house lawyer had represented the charterers in the arbitration, but had not been instructed in the court claim.

Service in Greece was not pursued promptly and was effected only about seven months after the award. Andrew Smith J held that the fax was not valid service, refused extensions and other procedural relief, and set aside service. The owners appealed. The central issues were whether the fax constituted service and whether the time limit should be extended.

1. Appeal dismissed unanimously. Mance LJ gave the reasons, with which Latham LJ and Simon Brown LJ agreed.

2. The fax to the club did not effect service. For the purposes of service by fax, a legal representative is a lawyer instructed in relation to the particular court claim. Representation in the underlying arbitration did not make the club lawyer authorised to accept service of the new Part 8 arbitration claim. The fax’s terms also objectively indicated that service was to be effected by another process, not by the transmission itself.

3. Service is assessed objectively, rather than by undisclosed intention. However, a party which states or clearly conveys that it is not serving a document cannot later assert that the same transmission was service. This reflects the procedural consequences which service has for the recipient.

4. Assuming that the relevant question was whether to extend the 21-day period in the Practice Direction—Arbitration, the judge had exercised his discretion correctly. The considerations identified in Aoot Kalmneft were relevant guides, but no rigid formula governed the decision. The owners’ unexplained delay of about three months before taking steps to serve in Greece was substantial and could not be overlooked.

5. The charterers’ refusal to appoint solicitors was uncooperative, but they were entitled to adopt that procedural stance. It was not a breach of any contractual duty of co-operation under the arbitration agreement, since an application to the court for permission to appeal was governed by the court’s procedural code. Their conduct did not excuse the owners’ separate delay.

6. The court applied the policy, explained in Secretary of State for the Environment v Euston Central Investments Ltd [1995] Ch 200, that intervention in arbitration must be pursued with dispatch in the interests of speedy finality. The absence of demonstrated prejudice to the charterers did not require an extension. The owners’ proposed appeal was not so strong that refusal would be an obvious hardship. Mance LJ also expressed, without deciding the point, considerable doubt that CPR 7.5 operated cumulatively with paragraph 27.2 of the Practice Direction—Arbitration.

• Court of Appeal (Civil Division): Appeal dismissed. The court upheld the refusal of procedural relief and the order setting aside service.
• High Court, Queen’s Bench Division, Commercial Court: Andrew Smith J, by judgment and order dated 6 December 2001, held that the claim form had not been served within its validity period, refused the owners’ applications for relief, and set aside service.
• Arbitration: An interim award published on 23 January 2001 rejected the owners’ claim concerning alleged delay in discharge.