Melissa K, the Motor Vessel v Tomsk, The Former Owners of the Motor Tanker

An offer to settle collision liability must be construed objectively, in its contractual and procedural context. A settlement offer does not ordinarily displace an agreed deadline for issuing and serving proceedings unless its terms clearly do so. An offer intended to operate under CPR Part 61.4 should be read consistently with that provision where reasonably possible, but the court must not force an incompatible construction. Where parties have agreed jurisdiction, security and a deadline for service, the absence of an opportunity to arrest the defendant vessel does not justify a mandatory extension under section 190(6) of the Merchant Shipping Act 1995. An extension under section 190(5) requires a good reason, and CPR 3.10 cannot circumvent the specific requirements of CPR 7.6(3).

The parties’ vessels collided in the Black Sea. Each side provided security, and the parties agreed English jurisdiction and a mutual deadline of 28 April 2015 for issuing and serving proceedings. The defendants later offered to settle liability on a 50/50 basis, stating that the offer was made under CPR Part 61.4 and/or Part 36. The claimants neither accepted the offer nor served proceedings by the deadline. They issued a claim form on 28 April, accepted the offer on 15 May, and served the claim form on 24 June.

The claimants sought confirmation of a binding settlement and extensions of time. The defendants sought declarations that service was invalid and that the court lacked jurisdiction.

1. Settlement offer. The claimants’ acceptance did not create a binding settlement. CPR Part 61.4, rather than Part 36, was the relevant regime for an Admiralty collision liability offer. The offer and its covering email had to be read together with the Second Extension Agreement. Read objectively, they preserved the deadline for issue and service. The offer remained open after the deadline only if proceedings had been served by then. The references to later acceptance and trial assumed validly issued and served proceedings.
2. Waiver. The defendants’ correspondence did not unequivocally waive reliance on the service deadline. It continued to encourage acceptance before expiry and was, at most, inconclusive as to any short-term continuation of negotiations.
3. Extensions. Section 190(6) of the Merchant Shipping Act 1995 applies where jurisdiction must be founded by arrest and the claimant lacked a reasonable opportunity to arrest. It does not apply where a jurisdiction agreement and contractual security made arrest irrelevant, particularly where the parties agreed not to arrest each other’s vessels. Section 190(5) requires a good reason at the first stage of the applicable two-stage approach. The claimants’ carelessness and failure to request service in time supplied no good reason.
4. Service and procedural error. The relevant regime was CPR 7.6(3). The claimants had not taken all reasonable steps to serve the claim form in time. CPR 3.10 could not be used to obtain indirectly an extension which CPR 7.6(3) specifically refused.
5. The claimants’ applications were dismissed. There was a declaration that the claim form had not been validly served and that the court had no jurisdiction to try the claim. The defendants’ applications for strike-out or summary judgment did not arise.

First-instance decision. No prior appellate decision is stated in the judgment.