Chemicals & Plastics Ltd. & Ors v Marittima Etnea Srl

A default judgment obtained against a defendant domiciled in another Convention state must be set aside where the English court lacked Convention jurisdiction and proceedings were commenced on the basis of an incorrect jurisdiction certificate. The certificate is a safeguard for service out of the jurisdiction and must not be abused. A party cannot ordinarily establish estoppel by silence merely because the other party failed to object to English jurisdiction. Estoppel by silence requires circumstances giving rise to a duty to speak, a resulting belief or expectation, and unconscionability in allowing the party to resile. Where the claimant’s advisers knew or should have known the jurisdictional position, and the defendant neither represented nor accepted English jurisdiction, reliance on a time bar is not unconscionable.

The claimants sought damages for contamination of caustic soda carried on the vessel Sarah Wonsild. The Italian ship owners were served in Italy after the claimants certified that the English court had jurisdiction under the Civil Jurisdiction and Judgments Act 1982. Judgment in default was later entered when the owners did not acknowledge service.

The owners applied to set aside the judgment, contending that the English court lacked jurisdiction under the Brussels Convention. The claimants ultimately accepted that the court lacked jurisdiction but sought to impose a condition that the owners should not rely in Italy on the accrued contractual time bar. The central issues were whether the judgment should be set aside without terms and whether the owners were estopped from relying on the jurisdictional objection or time bar.

1. The default judgment was set aside and the proceedings were set aside because the English court lacked jurisdiction. The claimants had invoked English jurisdiction through an incorrect certificate. That certificate was a vital safeguard which enabled service in another Convention state without an application for leave, and its use in this case constituted an abuse of process.

2. The court did not need to decide the general question whether terms could ever be imposed when the court had never possessed jurisdiction. This was not an appropriate case for doing so. A condition preventing reliance on the time bar would have rewarded the claimants for obtaining judgment in default after the expiry of the period in which timely proceedings could have been brought elsewhere.

3. The claimants had also failed to give clear notice that the moratorium on procedural steps had ended and that the owners were required to acknowledge service immediately. That failure independently justified setting aside the default judgment without terms.

4. Estoppel by silence or acquiescence requires more than inaction. The circumstances must establish a legal duty to speak, produce a belief or expectation across the parties, and make it unconscionable for the alleged representor to resile. The approach in The Stolt Loyalty, reported at [1993] 2 LlLR 281, depended on the party said to be estopped knowing or suspecting the other party’s mistake and deliberately allowing it to continue.

5. Those circumstances were absent. The owners’ representative made no unequivocal representation accepting English jurisdiction. He had not seen the contract of affreightment and was entitled to assume that the claimants’ Dutch and English lawyers had concluded that English proceedings were permissible. The claimants were the authors of their own misfortune, and it was not unconscionable to allow the owners to rely on the accrued time bar.

The court declared that it had no jurisdiction and set aside the proceedings.

Not stated in the judgment. This was a first-instance decision of the High Court (Queen’s Bench Division).