Borealis AB v Stargas Ltd & Anor

An appellate court should interfere with a discretionary case-management decision only where the judge erred in principle, omitted a relevant matter, considered an irrelevant matter or reached a plainly wrong decision.

A party seeking to join a new defendant shortly before trial must provide a proper and candid explanation for any material delay. The court may respect a claim to privilege, but the resulting absence of an explanation may weigh decisively against joinder.

The court must assess fairness and proportionality for all parties. Relevant considerations include alternative remedies, the likely postponement of trial, jurisdictional disputes, additional costs and the value of the proposed claim.

Stargas applied shortly before trial to join Saudi Aramco to long-running Commercial Court proceedings. It sought contribution under section 1 of the Civil Liability (Contribution) Act 1978 in respect of a shipowner's claim alleging that propane supplied by Stargas had damaged the vessel's tanks.

Moore-Bick J refused joinder. He relied principally on Stargas's unexplained delay, its failure to demonstrate the value of the contribution claim and the prejudice caused by postponing the trial.

Stargas appealed. The central issue was whether the judge's discretionary case-management decision was erroneous or disproportionate, particularly because he had assumed that refusal might deprive Stargas of its only remedy against Saudi Aramco.

1. Appeal dismissed unanimously. Rix LJ delivered the leading judgment. Robert Walker LJ agreed with his reasons, and Arden LJ agreed that the discretion should be re-exercised with the same result.

2. A decision about joining a party and preserving a fixed trial date lies peculiarly within the case-management judge's discretion. An appellate court should intervene only where the judge went wrong in principle, omitted a relevant consideration, considered an irrelevant matter or acted outside the generous ambit of permissible decision-making.

3. The judge had erred in concluding that there was no material from which to assess the proposed contribution claim. Per Rix LJ, the pleadings showed a prima facie good arguable claim. If the shipowner could establish that the cargo was dangerous as against Stargas, the same allegation could support liability against Saudi Aramco as shipper. Arden LJ likewise held that material bearing on the claim's strength could be gleaned from the statements of case. The Court of Appeal was therefore entitled to exercise the discretion afresh.

4. Stargas had nevertheless failed to give a proper and candid explanation for the critical delay between March 2001 and March 2002. By March 2001 the possible need to join Saudi Aramco should have been fully appreciated. The matter should at least have been addressed at the September 2001 case-management conference. A litigant may maintain privilege, but a court asked to grant exceptional late relief is then entitled to take account of the absence of an adequate explanation.

5. Stargas had also failed to show that contribution under section 1 of the Civil Liability (Contribution) Act 1978 was its only remedy. It appeared to possess contractual claims against its suppliers, including Saudi Aramco, but had supplied insufficient information about them. This materially weakened the alleged prejudice from refusing joinder and distinguished the circumstances considered in The “Baltic Flame”.

6. Joinder was likely to produce a substantial jurisdictional dispute because the supply contract selected Saudi Arabian law and jurisdiction. It would postpone trial for at least a year and potentially considerably longer. Disclosure, amendments, evidence and expert work would generate substantial additional costs which were disproportionate to the approximately $300,000 claim. Balancing all matters, it was neither proportionate, fair nor just to postpone the imminent trial.

• Court of Appeal (Civil Division): The court re-exercised the case-management discretion after finding an error in the assessment of the proposed contribution claim. It nevertheless dismissed the appeal and upheld the refusal of joinder.
• Commercial Court: Moore-Bick J refused Stargas's late application to join Saudi Aramco for contribution under section 1 of the Civil Liability (Contribution) Act 1978.