Flota Petrolera Ecuatoriana v Petroleos De Venezuala S.A.

For service-out applications outside the Brussels or Lugano regimes, the court need not apply a “much better argument” test to the jurisdictional gateway. Where the jurisdictional issue is a question of law and the relevant materials are before the court, it should ordinarily decide the issue on its merits.

In an arbitration context, the fact that service through the Hague Convention may take many months can contribute to a good reason for alternative service, particularly where English solicitors already act in closely related arbitrations and will give adequate notice. Convention membership does not itself make alternative service exceptional, absent a positive objection to the proposed method.

The claimant sought to constitute a sole-arbitrator tribunal under Arbitration Act 1996 s 18(3)(d), relying on an arbitration agreement allegedly contained in a contract of affreightment. Knowles J had granted permission under Civil Procedure Rules 1998 r 6.15 to serve the arbitration claim form on the defendant’s London solicitors by an alternative method.

The defendant applied to set that order aside. It challenged the jurisdictional gateway, the existence of a good reason for alternative service where the Hague Convention applied, and the claimant’s alleged failure of full and frank disclosure.

1. Jurisdictional gateway. The application was governed by Civil Procedure Rules 1998 r 62.5(1)(c). The court rejected the suggestion that the “much better argument” formulation used in Brussels Regulation cases should generally govern non-Brussels service-out applications. The distinction is material because, outside that regime, the claimant must also show that England and Wales is the appropriate forum. Where the jurisdictional question is one of law, no disputed fact arises, and the court has the necessary materials, it should normally decide the question itself rather than apply only a good arguable case test (paras [11]-[14]).
2. Arbitration agreement. Clause 18 of the contract of affreightment, providing “GA/ARB: LONDON/ENGLISH LAW to apply”, was elliptically worded. Read with the contractual context and commercial common sense, it was at least a possible and, overwhelmingly, the proper interpretation that disputes under the contract of affreightment were to be arbitrated in London subject to English law. It was unnecessary at this stage to decide what form the arbitration should take or whether the Asbatankvoy arbitration mechanism was incorporated (paras [15]-[19]).
3. Alternative service. Hague Convention membership did not, without more, require exceptional circumstances before r 6.15 could be used. The relevant question remained whether there was a good reason. Delay of eight months would not ordinarily suffice alone, but here it materially combined with the arbitration context, the defendant’s existing English representation in seven related arbitrations, the adequacy of notice, and the desirability of avoiding pointless delay. Alternative service on the defendant’s solicitors was therefore justified (paras [20]-[23]).
4. Disclosure. The supporting witness statement was less full than it should have been and was misleading in its treatment of a period of delay. However, the defects were not material to the decisions under challenge and did not justify setting aside the order or imposing a sanction (paras [24]-[26]). The defendant’s application was dismissed (para [27]).

The judgment records that Knowles J made the order dated 21 June 2017 granting permission for alternative service. The present court dismissed the defendant’s application to set that order aside. No further appellate history is stated.