Tramp Oil & Marine Ltd v State Enterprise for Water Transport & Ors

Under the Civil Procedure Rules, an application to strike out for want of prosecution requires a broad assessment of what justice demands. Relevant considerations include the length and responsibility for delay, prejudice, prospects of a fair trial, and alternative case-management powers. Delay after issuing proceedings near the limitation deadline remains relevant, but may be excusable where service was genuinely impeded by international or legal conditions and the claimant reasonably relied on official and expert advice. A fair trial may remain possible despite substantial loss of documents and witnesses where contemporaneous admissions narrow the issues. The claimant nevertheless retains the burden of proving the claim and any contractual entitlement to interest.

Tramp supplied bunkers to vessels owned or managed by the Iraqi State Enterprise for Water Transport. It issued proceedings in 1996, but delayed service while diplomatic conditions and Iraqi law appeared to prevent lawful and enforceable service. The writ was renewed annually and was eventually served by an alternative method in 2003.

After a default judgment was set aside by consent, SEWT applied to strike out the claim for want of prosecution. Morison J refused the application and an adjournment application. SEWT abandoned its appeal concerning the adjournment, but appealed against refusal to strike out. The central issues were whether Tramp's delay was inexcusable and whether a fair trial remained possible.

Lord Justice Clarke delivered the leading judgment. Patten J and Lord Justice Auld agreed. The appeal was dismissed.

1. The application was made under the residual power preserved by rule 3.4(5) of the Civil Procedure Rules. SEWT accepted that it could not rely on the express abuse-of-process ground in rule 3.4(2)(b). It was unnecessary to decide whether abuse of process was the necessary threshold, because SEWT argued that the facts satisfied that test in any event.
2. The applicable approach was the flexible CPR approach identified in Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926, Purefuture Ltd v Simmons & Simmons (unreported, Court of Appeal, 25th May 2000) and Amy Nasser v United Bank of Kuwait [2001] EWCA Civ 1454. The court had to assess all the circumstances against the overriding objective. Relevant matters included delay, culpability, prejudice, the possibility of a fair trial and the availability of alternative case-management powers. No one power was inherently preferable, although serious prejudice could make continuation unjust.
3. Issuing proceedings close to expiry of the limitation period was potentially relevant and imposed a responsibility to progress the claim expeditiously. However, Tramp's delay was understandable. The debt had been acknowledged, Tramp wished to preserve its commercial relationship, and service in Iraq appeared unavailable under the Convention made on 25th July 1935 because the required consular services did not exist. Tramp and its solicitors were entitled to rely on the advice of the Foreign and Commonwealth Office and an Iraqi lawyer. There was no point in attempting service which was unlawful in Iraq and would probably have produced an unenforceable judgment.
4. The destruction of SEWT's offices and the loss of witnesses and documents did not establish that a fair trial was impossible. The contemporaneous telexes strongly indicated that the principal debt was undisputed. Common sense supported the conclusion that SEWT was unlikely now to challenge amounts which its accounts department had accepted when the relevant documents and personnel were available.
5. Tramp retained the burden of proving the principal claim, interest, incorporation of its standard terms and any issue whether contractual interest was a penalty. If contractual interest was not proved, the court retained a discretion as to interest. Those issues could be fairly tried.
6. Morison J made no error of principle and was entitled to refuse strike-out. The Court of Appeal detected no abuse of process and would not interfere with the exercise of his discretion. The appeal was dismissed, with SEWT ordered to pay Tramp's costs.

• Court of Appeal (Civil Division): On 8 June 2005, the court dismissed SEWT's appeal against Morison J's refusal to strike out the claim for want of prosecution. The appeal concerning the adjournment was abandoned. See [2005] EWCA Civ 772.
• High Court of Justice, Queen's Bench Division, Commercial Court: Morison J refused an application to adjourn and refused SEWT's application to strike out the statement of case for want of prosecution on 16 July 2004.