Expofrut SA & Ors v Melville Services Inc & Anor

An extension of an arbitral time limit under Arbitration Act 1996, s 12(3)(b), requires conduct by the other party which makes it unjust to enforce the limit. Mere silence or participation in related proceedings is insufficient. The conduct must have a causative connection with the failure to comply or with the injustice relied upon, although it need not amount to an estoppel or be blameworthy. Delay by the applicant may also be decisive. Where a party was entitled to participate in foreign proceedings before raising an arbitration objection, that participation does not ordinarily justify an extension. A party who learns of the objection but delays seeking relief may be refused an extension.

The claimants sought an extension of approximately three years and eight months to comply with the one-year Hague/Hague-Visby limitation period incorporated into an arbitration clause in the relevant charter party and bills of lading.

They had pursued cargo-damage claims concerning fresh pears in Belgium. The defendants participated in Belgian court-surveyor proceedings and later challenged the Belgian court’s jurisdiction, asserting that the dispute belonged in arbitration. The Belgian court accepted that argument on 24 June 2014. The claimants then commenced arbitration and applied for an extension of time.

The issue was whether the defendants’ conduct made it unjust under s 12(3)(b) of the Arbitration Act 1996 to hold the claimants to the contractual time limit.

1. The application was dismissed. Section 12 of the Arbitration Act 1996 materially restricts the circumstances in which an arbitral time limit may be extended. The relevant requirement was s 12(3)(b): conduct by one party making it unjust to hold the other to the strict terms of the provision.
2. Mere silence is insufficient. There must be conduct by the other party which is causative of the failure to comply with the time limit or of the injustice said to arise. The conduct need not be wrongful, blameworthy, or amount to an estoppel. The approach in The Catherine Helen, Thyssen v Calypso Shipping, Harbour & General v Environment Agency and The Lake Michigan supported that conclusion.
3. The defendants were entitled under Belgian procedure to participate in the court-surveyor process and to defer their jurisdictional objection until their pleadings on the merits. Their participation, without more, did not constitute conduct making enforcement of the limitation period unjust. The factual analogy with The Skier Star did not alter that conclusion.
4. The claimants had formed a firm but mistaken view that Belgian law prevented reliance on the arbitration clause. They chose to pursue the Belgian proceedings on that basis. When the defendants raised arbitration in November 2012, the claimants did not seek an extension or take protective steps, instead continuing to contest jurisdiction in Belgium. Their subsequent delay until April 2015 was independently relevant and made an extension unavailable.
5. The merits of the underlying cargo claim did not affect the conclusion. The strict contractual time limit therefore remained enforceable.