Alba Exotic Fruit SH PK v MSC Mediterranean Shipping Company S.A.

A long and inexcusable delay does not automatically amount to an abuse of process justifying strike out. Strike out for delay requires either a serious risk to a fair trial or serious prejudice, intentional and contumelious disregard of the court’s rules with awareness of the possible consequences, or conduct amounting to abuse such as warehousing. Where a party breaches a procedural obligation, the court must consider the Denton approach but must separately decide whether strike out is proportionate. Security for costs may be imposed as a proportionate sanction for prolonged non-compliance where the claim remains triable and strike out would be too draconian.

Alba claimed damages and loss of profit arising from spoiled bananas carried by MSC from Ecuador and Honduras to Albania. MSC denied liability and brought a counterclaim. Alba issued proceedings within the contractual limitation period, but failed to apply for a case management conference within the period required by Civil Procedure Rules Practice Direction 59, paragraph 7.2. No case management conference had been fixed more than four years later.

MSC applied to strike out the claim for abuse of process and breach of a practice direction, and separately sought security for costs. The central issues were whether Alba’s delay justified strike out, whether the claim should instead continue subject to a proportionate sanction, and whether security should be ordered.

1. Abuse of process. The court accepted that inordinate and inexcusable delay may justify strike out where it creates a substantial risk that a fair trial will not be possible or causes serious prejudice. Delay involving complete, total or wholesale disregard of the court’s rules with awareness of the consequences may also justify strike out without separate proof of such prejudice. A deliberate decision not to progress a claim may amount to abuse, but its length, the claimant’s responsibility and the reasons given remain relevant.
2. Alba’s delay of four years and seven months was inordinate and inexcusable. However, MSC had not shown serious prejudice or that a fair trial was no longer possible. The evidence suggested that relevant documents had already been gathered and that documentary evidence would be important. Strike out was therefore refused on this ground.
3. The evidence did not establish the complete and wholesale disregard, or full awareness of the risk of strike out, required for intentional and contumelious delay. Nor did the two identified periods of delay amount to warehousing. Arbuthnot Latham Bank Limited v Trafalgar Holdings was materially distinguishable, and the approach in Asturian Foundation v Ibrahim was applied.
4. Breach of procedural obligation. Alba had breached PD 59, paragraph 7.2. The factors relevant to relief from sanctions under CPR 3.9, applying the three-stage approach in Denton v TH White, were relevant. The breach was serious and unexplained, and the need for efficient litigation and compliance with rules favoured refusing relief. Nevertheless, CPR 3.4 required a separate assessment of whether strike out itself was proportionate, as explained in Walsham Chalet Park Limited (T/A Dream Lodge Group) v Tallington Lakes Limited.
5. Strike out would deprive Alba of the opportunity to pursue an apparently legitimate claim, although the case remained triable and MSC had suffered no substantial litigation prejudice. An unless order would not adequately sanction the past default. The proportionate sanction was an order under CPR 3.1(5) requiring security for MSC’s costs.
6. Security for costs. The conditions in CPR 25.13(2)(a) were satisfied, but the financial evidence did not justify security under CPR 25.12 as a standalone order. The court nevertheless ordered security of £100,000 as a proportionate sanction for the procedural default, representing approximately 79% of MSC’s projected costs. Additional security for enforcement costs in Albania was unnecessary.