SET Select Energy GmbH v F & M Bunkering Ltd

A procedural time limit may bar a challenge to jurisdiction under Articles 27 or 28 of the Judgments Regulation, but the court may extend time retrospectively under CPR 3.1(2)(a). A short delay will ordinarily justify careful consideration of an extension where the jurisdiction challenge is genuine, there is no prejudice, and refusing the extension could require judgment without considering the European jurisdiction rules.

Proceedings do not involve the same cause and object merely because they concern overlapping facts or common issues. Proceedings concerning an autonomous demand guarantee and proceedings concerning the underlying supply contract may involve different contractual relationships and different remedies. An exclusive jurisdiction clause is a powerful factor against a discretionary stay under Article 28.

SET Select Energy GmbH claimed approximately US$1.2 million from F & M Bunkering Ltd for bunkers supplied to vessels on the Danube. The contracts contained an English governing-law and exclusive-jurisdiction clause.

F&M had begun earlier proceedings in Cyprus seeking to restrain payment under a demand bank guarantee issued by Bank of Cyprus. It later applied under CPR Part 11 for a stay of the English proceedings under Articles 27 or 28 of Council Regulation (EC) No 44/2001. The application was made shortly out of time, and S.E.T. sought judgment in default of defence.

The issues were whether time should be extended and whether the English proceedings had to be stayed, or should be stayed, because of the Cyprus proceedings.

1. The court retrospectively extended F&M’s time for challenging jurisdiction under CPR 3.1(2)(a). The Supreme Court’s decision in The Alexandros T [2013] UKSC 70 established that the CPR time limit was compatible with EU law and could be extended in an appropriate case. The application here was only slightly late, S.E.T. identified no prejudice, and it would have been inappropriate to enter judgment without considering whether the Judgments Regulation required a stay.

2. Article 27 was not engaged. The test requires proceedings between the same parties involving the same cause of action, with the same object and cause. Identity of cause concerns the facts and legal rules relied upon. Identity of object concerns the end sought. Common issues, facts or documents are insufficient, and the claims rather than the defences must be compared.

3. The English proceedings sought payment for bunkers supplied under contracts of sale. The Cyprus proceedings sought to restrain payment under an autonomous demand guarantee, based on alleged fraud in the demand. The proceedings therefore concerned distinct transactions, contractual relationships and remedies. A declaration in the Cyprus pleading that F&M owed no money did not alter the substance of the proceedings.

4. Article 28 was also inapplicable. The actions were not so closely connected that it was expedient to determine them together to avoid a substantial risk of irreconcilable judgments. The guarantee dispute concerned the bank’s obligation to pay; the English proceedings concerned liability under the supply contracts. The exclusive English jurisdiction clause was a powerful factor against a discretionary stay.

5. S.E.T.’s application for judgment in default of defence and F&M’s jurisdiction challenge were dismissed. Consequential directions were to be addressed after judgment.