Braceforce Warehousing Ltd v Mediterranean Shipping Company (UK) Ltd

An agreement referring disputes to expert determination should generally be upheld. A limitation agreement extending time for court proceedings does not, without clear contractual language, create a time bar depriving the expert of jurisdiction. Where expert determination is commenced by the first necessary unilateral step within the relevant period, the expert has jurisdiction. Protective court proceedings do not necessarily amount to an election to litigate or displace the agreed dispute-resolution procedure. The court may stay overlapping proceedings so that the contractual procedure can take its course, while retaining liberty to reconsider if issues arise outside the expert’s jurisdiction.

The claimant and defendant had agreed that disputes arising from an agreement for lease, other than questions of construction or interpretation on points of law, would be determined by an expert. The parties later agreed to extend the limitation period for claims until 6 December 2008. The defendant subsequently proposed an expert, issued a protective Part 7 claim, and applied for the appointment of an expert by the President of the RICS.

The claimant brought Part 8 proceedings, contending that the expert determination was out of time, that the defendant had elected to litigate, and that the dispute should proceed in court. The defendant maintained that the expert had jurisdiction and that the court proceedings should be stayed.

1. The Part 8 application was rejected. The agreement extending the limitation period to 6 December 2008 concerned limitation in relation to proceedings and prevented the claimant from raising a limitation defence in proceedings commenced by that date. It did not impose a contractual time bar on commencing expert determination or deprive the expert of jurisdiction.
2. The court noted that the parties’ premise that the Limitation Act 1980 applied to expert determination appeared incorrect, but it was unnecessary to decide that issue. Any limitation defence would be a matter for determination within the relevant jurisdiction, rather than a jurisdictional defect.
3. Clause 24 contained no express provision governing commencement. Where a time bar applied, commencement would be a unilateral act taking place at the first necessary step. The defendant’s letter of 24 November 2008, proposing an expert and invoking the contractual machinery, commenced the expert determination. The subsequent appointment was therefore valid.
4. The defendant’s issue of protective Part 7 proceedings did not amount to an election to pursue litigation in preference to expert determination. The parties had not agreed to proceed exclusively by the court claim, and parallel proceedings were not inherently objectionable.
5. Applying the principle that parties should generally be held to their contractual choice of dispute resolution, the court stayed the Part 7 proceedings pending expert determination. The stay could be reconsidered if the claimant’s response disclosed questions of construction or interpretation, or other matters outside clause 24.

First-instance decision. The judgment records no prior appellate decision.