Griffin Underwriting Ltd v Varouxakis (Free Goddess)

A party who agrees a moratorium affecting a procedural time limit must notify the court where the rules require notification. Failure to do so may leave the original time limit effective. A defendant who fails to challenge jurisdiction within the applicable period is treated as having accepted jurisdiction, and relief from that sanction is not generally justified merely because the court might otherwise lack jurisdiction.

For Article 7(2) of the Recast Brussels Regulation, the relevant place of damage is ordinarily where the initial direct and immediate damage occurs. Consequential financial loss elsewhere is insufficient. Where the damage is non-payment of money, the relevant place is ordinarily where payment should have been made. A claim brought by an insurer is not necessarily a matter relating to insurance; the insurance policy must have a material and indispensable connection with determination of the claim.

Griffin Underwriting Ltd, a Guernsey insurer, sued Ion Varouxakis, domiciled in Greece, for allegedly inducing companies under his control to breach a settlement agreement. The claims concerned loss of general-average recoveries and failure to account for payments received from third parties.

The defendant acknowledged service indicating an intention to contest jurisdiction, but did not issue his jurisdiction application within the applicable period. The parties had agreed a moratorium which was not notified to the court. After the moratorium ended, the defendant applied out of time and sought relief from sanctions.

The issues were whether the challenge was in time, whether relief should be granted, whether England had jurisdiction under Article 7(2), and whether the claims were matters relating to insurance under Section 3 of Chapter II.

1. Timing. The defendant’s application was late. Under CPR 11(4) and CPR 58.7, the application had to be made within 28 days of acknowledgment of service. The parties’ moratorium was ineffective to extend time because it was not notified to the court as required by CPR 58 PD para 7. Even if effective, it ended following the claimant’s clear notice in October 2017. The defendant was therefore treated as having accepted jurisdiction under CPR 11(5).
2. Relief from sanctions. Applying the three-stage approach in Denton v TH White Ltd, the delay was serious, there was no good reason for it, and refusal of relief was proportionate. The fact that refusal might result in proceedings continuing in a forum which otherwise lacked jurisdiction was not generally a powerful reason for relief. Newland Shipping & Forwarding Ltd v Toba Trading FZC was confined to its exceptional circumstances. Relief was refused.
3. Article 7(2). The court accepted the good arguable case standard and the established distinction between the place of the harmful event and the place where damage occurred. For the Lost GA Claim, the initial direct and immediate damage occurred in Oman, when the voyage was abandoned and the value of the subrogated right was adversely affected. The later prospect of payment through London was consequential. England therefore lacked jurisdiction over that claim.
4. For the Accounting Claim, the settlement agreement required recovered funds to be paid to the average adjusters in London. The claim concerned non-payment of money which ought to have been paid there and therefore fell within Article 7(2).
5. Insurance. Neither claim was a matter relating to insurance. Griffin’s status as insurer explained the background and the existence of subrogated rights, but determination of the tort claims did not require consideration of the policy. The insurance-policy nexus was therefore neither material nor indispensable.
6. The jurisdictional challenge was dismissed. Had it been necessary to decide the merits of jurisdiction, the Accounting Claim would have fallen within Article 7(2), but the Lost GA Claim would not.

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