Neutral Citation Number: [2011] EWHC 3381 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 19/12/2011

Before :

MR JUSTICE BURTON
---------------------
Between :
Case No: 2006 Folio 815

STARLIGHT SHIPPING COMPANY

Claimant
- and -

(1) ALLIANZ MARINE & AVIATION

VERSICHERUNGS AG
(2) ROYAL & SUN ALLIANCE
INSURANCE PLC
(3) ASSICURAZIONI GENERALI SPA
(4) REMBRANDT INSURANCE CO LTD
(5) BRIT UW LTD (sued on its own behalf
and on behalf of all underwriting members of
Lloyds Syndicate 2987 for the 2006 Year of
Account)
(6) NICHOLAS BURKINSHAW (sued on his
own behalf and on behalf of all underwriting
members of Lloyds Syndicate 2003 for the
2006 Year of Account)
(7) HISCOX DEDICATED CORPORATE
MEMBER LTD (sued on its own behalf and
on behalf of all underwriting members of
Lloyds Syndicate 0033 for the 2006 Year of Defendants
Account)

-and-
OVERSEAS MARINE ENTERPRISES INC
-and- Third Party
(1) HILL DICKINSON LLP
(2) HILL DICKINSON INTERNATIONAL
(3) MICHAEL FRANCIS MALLIN
(4) ALEXANDRA JULIA TYTHERIDGE Intended
MARIA MOISIDOU Defendants

AND 2011 Folio 702

Draft 23 June 2017 05:57 Page 1

 BRIT UW LTD AND OTHERS Claimants
-and-
(1) STARLIGHT SHIPPING CO
OVERSEAS MARINE ENTERPRISES INC Defendants
AND 2011 Folio 1043

BRIT UW LTD AND OTHERS Claimants

-and-
(1) IMPERIAL MARINE CO
(2) BRISTOL MARINE CO
(3) CYCLONE MARITIME CO
(4) SEAGARDEN SHIPPING INC
WAVE NAVIGATION INC Defendants

---------------------
---------------------

MR JAMES DRAKE QC and MS EMMA HILLIARD (instructed by Lax & Co LLP) for
the Claimant and Third Party in 2006 Folio 815 and for the Defendants in Folio 2011 702
and 2011 1043
MR MICHAEL SWAINSTON QC and MR TONY SINGLA (instructed by Clyde & Co
LLP) for the First to Fourth Defendants in 2006 Folio 815
MR STEVEN GEE QC and MR TOM WHITEHEAD (instructed by Norton Rose LLP) for
the Fifth to Seventh Defendants in 2006 Folio 815 and for the Claimants in 2011 Folio 702
and 2011 Folio 1043
MR DAVID BAILEY QC AND MR JOCELIN GALE (instructed by Mayer Brown
International LLP) for the Intended Defendants

Hearing dates: 28 and 29 November 2011

---------------------
Judgmen

Draft 23 June 2017 05:57 Page 2

tMR JUSTICE BURTON :

1. Starlight Shipping Company (Starlight) sued its insurers by proceedings in the

Commercial Court, 2006 Folio No 815, issued on 15 August 2006 (the original
action), arising out of the loss of the vessel Alexandros T on 3 May 2006. The first
four Defendants are known as the Company Market Insurers (CMI) and the Fifth to
Seventh Defendants as the Lloyds Market Insurers (LMI). In each relevant policy,
there was an exclusive jurisdiction clause providing for English law and the
jurisdiction of the courts of England and Wales, which is why Starlight commenced
and continued its claims here. Liability was denied, and vigorously contested.
Overseas Marine Enterprises Inc (OME) were identified in the policies as
Managers. Ince & Co acted for Starlight in the proceedings, and Hill Dickinson LLP,
then Hill Taylor Dickinson, (whom, together with their partners and employees, all
being Intended Defendants in the original action, I shall call HD) acted for the
Defendant Insurers.

2. The loss of the Alexandros T involved considerable loss of life, and the
proceedings were made the more fraught both for that reason and because the denial
of liability was based in substantial part upon allegations of unseaworthiness, to
which Starlight and/or OME were alleged to be privy, and failure properly to report
and repair damage to the vessel in accordance with Class Rules. In the course of the
preparation for the proceedings, a number of specific allegations were made and
pursued by Starlight, and Ince and Co on its behalf, falling into two general
categories:

i) Serious allegations of misconduct by the Defendant Insurers and their

underwriters involving alleged tampering with and bribing of witnesses, in
particular the bosun, a Mr Miranda, to give false evidence, coupled with other
allegations of spreading false and malicious rumours against Starlight in the
course of purported investigation of its claims.

ii) Deliberate failure by the Defendant Insurers to pay up under the policy, said
to have had substantial consequential financial impact upon Starlight, and to
have led to substantial recoverable loss and damage.

3. The allegations were made even before the issuing of the proceedings by the
Claimant. They were referred to with some particularity in Ince & Cos letter to HD of
18 July 2006. Complaints were made about attempted covert contacts with the
Claimants crew, and, in particular, an unspecified instance of serious misconduct by
one of the underwriters. As for the malicious rumours (described as malicious
scuttlebutt), this was described and complained of, together with its alleged effect on
the market. Further reference was made in Ince & Cos letter of 20 October 2006 to
the underwriters behaving in a reckless and irresponsible fashion in making an
allegation when they have no evidence to substantiate what they allege. It appears
that those representing Starlight obtained a sworn affidavit dated 8 January 2007 from
Mr Miranda and another member of the crew, a Mr Paulino, alleging that they were
given money and offered more, in return for the giving of what they regarded as
untrue evidence. A Request for Further Information was served on 24 October 2007
by Starlight in the proceedings, asking probing questions about payments made, inter
alia, to Mr Miranda, and as to the circumstances of approaches to the witnesses,
which led to a response, dated 19 November 2007. The allegations came fully out into

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 the open in a witness statement of Mr Nicholas Shepherd of Ince & Co, on Starlights
behalf, dated 7 December 2007, served just prior to a Pre-Trial Review on 14
December 2007. Mr Shepherd referred (in paragraph 6) to Mr Miranda as being the
apparent source of the very serious allegations which the Defendant Insurers were
making, as had now become clear after exchange of witness statements, and Mr
Shepherd addresses this in terms so that the Court has some idea of what the
Claimant will in due course say with regard to the bosons veracity: he exhibits the
joint affidavit of Mr Miranda and Mr Paulino of 9 January 2007, to which I have
referred.

4. He referred both to that affidavit and to other affidavits from crew members
dealing with alleged approaches made to them by a Mr Bernardo, on the Defendants
behalf, and suggests that Mr Bernardo appears effectively to have been attempting to
solicit untruthful evidence from those to whom approaches were made to say that the
Vessel was unseaworthy. Counsel for Starlight, Mr Brenton QC, specifically stated to
Tomlinson J at the Pre-Trial Review on 14 December 2007, as recorded by the
transcript (referring to Mr Shepherds fifth witness statement, which the judge had
read), that Mr Bernardo had approached a number of survivors and sought to
persuade them to give false evidence in return for financial inducements.

5. This position is summarised by Mr Crampton of Lax & Co, the new solicitors
acting for the purpose of these proceedings for Starlight, in his witness statement for
the purposes of the applications before me, namely:

5. In their defence to the claim, the Underwriters alleged that

the vessel was unseaworthy, that Starlight knew that the vessel
was unseaworthy and that Starlight had in place an illegal
practice, by which they refused to notify Class and the flag
state authority of the vessel about defects to their vessels.
These allegations were based on false evidence, which the
Underwriters had obtained from the bosun, Aljess Miranda

13. In their responses to the Request for Further Information,

the Hull Insurers provide details of payments totalling
US$25,100.00 and 14,864.39 made by them to Mr Miranda in
connection with the provision of his evidence. Throughout the
English Court proceedings, Starlight vehemently denied and
disputed the allegations made by Mr Miranda in the witness
statements and affidavit listed above. Starlight have always
maintained that Mr Mirandas accusations relating to the
condition of the Vessel and the conduct of the Starlight are
completely untrue and a fabrication; and that the payments
made by the Hull Insurers to Mr Miranda had the effect of
motivating Mr Miranda to intentionally make false
accusations.

6. As to the second series of matters by reference to consequential loss and damage,

at the same PTR, Mr Shepherd put in his sixth witness statement to support an
application to amend the pleadings, to add what were called the Additional Sums

Draft 23 June 2017 05:57 Page 4

 Claims, which he describes. The proposed amendment alleged that the Claimant
has sustained and claims loss and damage over and beyond the measure of the
indemnity to which it is entitled under the Policy. In what was described as the best
information which Starlight was presently able to provide, it was pleaded that, had the
Defendants complied with their obligations to indemnify in accordance with the terms
of the policy, Starlight would have purchased a replacement vessel, and had thus lost
between US$ 45m and US$ 47.7m by way of increased capital cost and chartering
losses of US$ 31,373,800.

7. Tomlinson J declined leave to introduce this further claim, concluding that he and
the Court of Appeal were bound by the decision of Sprung v Royal Insurance UK
Ltd [1992] 1 Lloyds I & R Rep 111 CA (itself following an earlier decision of the
Commercial Court by Hirst J in The Italia Express No 2 [1992] 2 Lloyds Rep 281).
Tomlinson J consequently refused permission on the basis that, in the light of English
law, Starlight had no cause of action in respect of the additional claims which it
sought to pursue. He also, as a matter of case management discretion, declined the
amendment, but he was quite plain as to the law.

8. In the event, the day before the hearing before Tomlinson J, LMI had entered into
a Settlement Agreement with Starlight and OME dated 13 December 2007 in full and
final settlement: I shall set out the terms of that agreement below. It was a term of the
Settlement Agreement that Starlight would obtain a stay by way of a Tomlin Order,
and a Tomlin Order by consent between the Claimant and the LMI Defendants was
made on 20 December 2007, such that:

UPON The Claimant and the Fifth, Sixth and Seventh

Defendants agreeing terms and by consent IT IS ORDERED
THAT

Save for the purposes of carrying into effect the terms agreed
between the Claimant and the Fifth to Seventh Defendants, all
further proceedings between the Claimant and the Fifth to
Seventh Defendants shall be stayed with effect from 14
December 2007 or such earlier date as may be agreed between
the parties or otherwise ordered hereafter.

9. A similar Settlement Agreement was then entered into in full and final settlement
between Starlight and OME and the CMI Defendants, dated 3 January 2008, and
pursuant to that agreement there was, by consent, a Tomlin Order entered, dated 7
January 2008, in materially the same terms, save that, whereas the other order was
backdated to 14 December 2007 (the date of the hearing before Tomlinson J), this
Tomlin Order had immediate effect.

10. I set out now the material parts of the two agreements. In each case the Assured
was defined as being [OME] and Starlight as Managers and/or Owners and/or
Associated and/or Affiliated Companies for their respective right and interest in the
ship Alexandros T:

The CMI Agreement:

Draft 23 June 2017 05:57 Page 5

 1. Each Underwriter agrees to pay on or before 18 January
2008 their due proportions of the sum of US$ 16m being
100% of their due proportions of the sum insured being 50% of
the US$ 32m without interest or costs.

2. The Assured and Claimant agree to accept the EURO

equivalent of each Underwriters due proportion of US$ 16m
in full and final settlement of all and any claims it may have
under Policy No 302/CF 000220Z against the Underwriters in
relation to the loss of Alexandros T, including all claims for
interest and costs (including in respect of all costs orders made
to date in the proceedings) but without effect to any other
insurance policy in which each Underwriter may be involved
[this latter aspect does not arise and I shall leave it out in my
recital of the rest of the agreement and of the LMI agreement].

3. The Assured and Claimant agree to Indemnify each

Underwriter against any claim that might be brought against it
by any of the Assureds or the Claimants associated companies
or organisations or any mortgagee in relation to the loss of
Alexandros T or under Policy No 302/CF 00220Z

6. This agreement is subject to English law and the exclusive

jurisdiction of the High Court in London.

2. The LMI Agreement:

2. The underwriters agree to pay on or before 24 December

2007 the sum of US$8M being 100% of their due
proportions of the sum insured being 25% of US$ 32m
without interest or costs

3. The Assured and Claimant agree to accept the EURO

equivalent of US$8M in full and final settlement of all and
any claims it may have under Policy No against the
Underwriters signing below in relation to the loss of
Alexandros T

4. The Assured and Claimant agree to indemnify the

underwriters signing below against any claim that might be
brought against them by any of the Assureds or the Claimants
associated companies or organisations or by any mortgagee in
relation to the loss of Alexandros T or under policy No

5. This agreement is subject to English law and the jurisdiction

of the High Court of London.

11. In April 2011 (more than three years later) nine sets of Greek proceedings, in
materially identical form, were issued by Starlight, by OME, by their co-Assureds and
by individual officers of those companies, against the LMI and CMI Defendants,
some of their employees or underwriters, and HD, and some of their partners or

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 employees. The claims are for compensation for loss of hire and loss of opportunity
by Starlight totalling approximately US$ 150m and for pecuniary compensation due
to moral damage amounting to 1m, and similarly substantial claims by the other
Claimants in respect of alleged acts, unlawful and in breach of good faith, all done for
the alleged purpose of avoiding the performance by the Defendants of their legal
obligations. The setting for all the claims is by reference to Articles of the Greek Civil
and Criminal Code: however the factual allegations are entirely familiar and include:

iii)At p33 of TC1 to Mr Cramptons witness statement, the allegation (which is

adopted by Mr Crampton as his summary of the Greek claim in paragraph 21
of his witness statement) that all the Defendants were responsible for using
false affidavits of witnesses (primarily Mr Miranda) with intention to harm the
Claimants: The underwriters pursued this criminal effect by intentionally
fabricating false evidence with the purpose that the underwriters (who were
responsible for the payment of insurance indemnity for the vessel) avoid
paying this insurance indemnity, contrary to their contractual obligations and
their legal obligations and in particular contrary to the provisions of the
insurance contract, providing for the timely payment of the insurance
indemnity.

iv)At p48, the claim that the Defendants were asserting and disseminating
false information to third parties, although they were aware of their falsity,
damaging to the Claimants reputation and credibility with the purpose that
the underwriters (who were responsible for the payments of the insurance
indemnity for the vessel) avoid paying the insurance indemnity, contrary to
their contractual obligation and their legal obligation and in particular
contrary to provisions of the insurance contract providing for the timely
payment of the insurance indemnity.

v) There then follows a whole section headed Intentional fabrication of false

evidence for defrauding the English court.

vi)There is a section headed The moral instigation alternatively complicity of

the underwriters to perjury and on the defrauding of the court by the
underwriters, including allegations of breaches of the English CPR.

Mr Crampton himself frankly summarises it in this way in paragraph 20 of his witness

statement before me:

The essence of the complaint against the Defendants in the

Greek proceedings concerns the allegation that the
Defendants obtained false evidence in Greece from the
bosun of the Alexandros T, Aljess Miranda This evidence
was then deployed in these proceedings in England and
also in the Greek proceedings:

12. There is then a substantial section of the Greek pleadings relating to the financial
consequences of the failure by the Defendants to comply with their obligations under
the policy and the way in which they allegedly handled the investigations. But what
has been described before Tomlinson J as the loss of the opportunity to buy and

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 charter one vessel has now become the loss of such opportunity in relation to three
vessels: hence doubling the pecuniary loss now sought.

13. In apparent recognition of the problem raised by the fact that such claims were
ruled out as a matter of English law by Tomlinson J, Mr Crampton, in paragraph 27 of
his witness statement, has explained that the claims made in respect of the three
vessels are advanced in two ways in the Greek pleadings, the first being that, as a
result of the underwriters intention to avoid payment of the insurance indemnity,
eventually resulting in late payment of the policy proceeds, the Claimant missed the
opportunity to use the policy proceeds to invest in the three vessels, and, secondly,
that, as an alleged result of the Defendants actions in acquiring the false evidence of
Mr Miranda, his clients were not able to insure the vessels and without insurance they
would not have been able to trade them and could not purchase them. He states that
his clients would amend their pleadings prior to the hearing of the disputes in
Greece so as to clarify this head of claim, such that no claim is made in respect of the
late payment of the policy proceeds. The expert evidence from the Claimant is that it
is not possible to amend the pleadings in the Greek courts, but, treating the proposed
draft amendment, which he exhibits, as a clarification, it does not seem to me that it in
any way cures the defect, if defect there was, and it is said that the insurance of the
three potential new vessels was rendered impossible, since all the London insurers
refused to quote for the vessels because of the refusal of the Defendant underwriters
to quote for them and because of the defamatory accusations spread as to the
unseaworthiness of the Alexandros T. All the allegations arise out of the alleged
manner in which the Defendants handled the Claimants claim in respect of the
Alexandros T, and, even though the consequences and the consequential losses have
expanded, and the claim for moral damages has been included, and although it seems
that the Claimant now relies on an expanded affidavit of Mr Miranda, which is
exhibited, the allegations, even though put into a context of Greek law, are materially
identical to those made prior to the Settlement Agreement.

14. Proceedings have been brought in this country as follows:

i) In the original action, the LMI Defendants and the CMI Defendants seek,
pursuant to the Tomlin Orders (or if necessary after lifting the stay imposed by
them) summary relief against Starlight, and the LMI Defendants, because
permission was given to them to join OME as a Third Party, seek summary
relief pursuant to Part 24 against OME (which filed an Acknowledgment of
Service and a Defence) to enforce the Settlement Agreement, to which it also
was a party.

ii) Fresh proceedings (2011 Folio 702) have been commenced by the LMI
Defendants without prejudice to their case that sufficient relief can and will be
obtained in the original action, against Starlight and OME, and, after
Acknowledgment of Service and Defence filed, an application under Part 24
against them for similar relief.

iii)The LMI Defendants have also brought fresh proceedings (2011 Folio
1043) against Starlights co-Assured and, again after Acknowledgments of
Service and Defence filed, seek under Part 24 declaratory relief and damages
for breach of the exclusive jurisdiction clause in their insurance policies, by
virtue of the issue of the Greek proceedings by them.

Draft 23 June 2017 05:57 Page 8

 iv)In fresh proceedings, 2011 Folio 894, the CMI Defendants have brought
claims against OME and the same co-Assured in respect of similar claims of
breach of the exclusive jurisdiction clause in the policy, and in respect of OME
by reference to breach of the terms of the Settlement Agreement. Judgment in
default has been entered by the CMI Defendants against all those Defendants
on 26 October (amended on 14 November) 2011, and no application to set
aside that judgment has been made and no issue arose in relation to those
proceedings before me.

v) Finally, and by separate application, David Bailey QC, with Jocelin Gale,
applied on behalf of HD to be joined to the original proceedings, pursuant to
CPR Part 19, as additional Defendants, so that, in due course, they too may be
able to claim relief, in their case by seeking declaratory relief within the
original proceedings. The contested application by HD was dealt with
discretely after the close of submissions on the main applications, and I shall
deal with it separately at the close of this judgment.

15. Although there are consequently a number of proceedings and a number of

applications, the thrust of the argument before me has been as follows. Michael
Swainston QC and Tony Singla, for the CMI Defendants, and Steven Gee QC and
Tom Whitehead, for the LMI Defendants, contend that the bringing of the various
Greek proceedings is in breach of the Settlement Agreements, and/or, insofar as
brought by the co-Assured, who fall within the definition of associated companies or
organisations, is covered by the indemnity in both Settlement Agreements; and
further is in breach of the exclusive jurisdiction clauses in the insurance policies and
in the Settlement Agreements. James Drake QC and Emma Hilliard, on behalf of
Starlight and OME and the other co-Assured who are claimants in the Greek
proceedings, both resist those contentions and, by a very late cross-application of their
own, seek a stay of any further proceedings in the original action, and of the two fresh
actions brought by LMI, by reference to Article 28 of EU Regulation 44/2001 (the
Judgment Regulation). No injunction is sought by the CMI or LMI Defendants to
restrain the Greek proceedings, so there is no contravention of the principle
established by Turner v Grovit [2004] ECR I-3565 in that regard.

16. I shall deal first with the issue which, it is common ground, falls to be considered
at English law (being the governing law of the insurance policies and of the
Settlement Agreements), namely whether, on a proper construction of the Settlement
Agreements and the jurisdiction clauses, the claims now sought to be brought in the
Greek proceedings

i) cannot be brought at all by reference to the Settlement Agreements (or are

covered by the indemnity therein if pursued further), and/or

ii) if to be pursued at all (and not to amount to an abuse at English law within
the principle in Henderson v Henderson [1844] 3 Hare 100 and Johnson v
Gore Wood & Co (No 1) [2002] 2 AC 1), can only be pursued within this
jurisdiction.

17. The Settlement Agreements

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 18. The two Settlement Agreements are in materially identical terms, as set out in
paragraph 10 above. Mr Drake submits that they are to be construed so as not to
prevent the bringing of the Greek proceedings. He relies on the following:

i) Starlight submits that the Greek proceedings are not in relation to the loss
of Alexandros T or under the Policies. He refers to Ashville Investments
Ltd v Elmer Contractors Ltd [1989] 1 QB 488 CA in which (by reference to
an arbitration clause) a dispute under an agreement was construed as less all-
embracing than a dispute arising out of an agreement.

ii) The claims are for bad faith and asserted breaches of the Greek Criminal
Code, perjury etc, tantamount to fraud, and thus should be construed as within
what might, in the context of exemption clauses, be called the fraud
exception. He refers to the decision of the Court of Appeal in Satyam
Computer Services Ltd v Upaid Systems Ltd [2008] EWCA Civ 487.
Laurence Collins LJ, giving the judgment of the Court in Satyam, in relation
to a clause which gave a very wide release from claims arising out of or
relating in any way directly or indirectly to an agreement, addressed in
section 4 of his judgment the question Whether the settlement agreement
prevented Upaid from bringing (a) unknown claims which arose after the date
of the settlement agreement and/or (b) unknown claims involving an allegation
of fraud against Satyams employees. In paragraphs 79 to 87, he addresses
that question, and concludes that express words would be necessary for a
release from unknown claims. Mr Drake relies on the words of Laurence
Collins LJ in paragraph 82 of his judgment:

Where the claims in question were based on fraud or

involved allegations of dishonesty, very clear and specific
language in a settlement agreement was required to settle
such claims or exclude their subsequent pursuit, a fortiori if
they were unknown at the time that the settlement
agreement was entered into.

This, Mr Drake submits, leaves open the route for claims in fraud which were
known at the time of the Settlement Agreements, in the absence of express
words excluding them.

iii)Although he does not pursue the suggestion made by Mr Crampton in his

witness statement, and plainly wrong in law, that there can be reference to the
negotiations at the time of the agreements being entered into, he nevertheless
submits that, on a true and proper construction of the Agreements, they would
not amount to a clean break provision.

19. I am wholly persuaded by the submissions of the Defendants to the contrary,

which appear to me to be unanswerable:

i) I start, as did they, with the indemnity clause contained in Clause 4 of the
LMI Agreement and Clause 3 of the CMI Agreement. It is plain that that
clause cannot widen the effect of the Settlement Agreements, but must in fact
contain its nub. It must both inform the construction of the earlier clause
(respectively Clauses 3 and 2) and indeed put it into effect. It is part and parcel

Draft 23 June 2017 05:57 Page 10

 of the wide-ranging release that Starlight and OME do not only agree
themselves not to make any claims, but also to indemnify the Defendants
against any such claims brought by the identified other parties. Indeed, Mr
Drake did not seek in his argument to contend for any difference between
claims in relation to the loss of Alexandros T or claims under the policies.

ii) I am satisfied that all the claims now made were claims in relation to the
loss of Alexandros T. They relate to the investigations by the insurers (in bad
faith or otherwise), and to the way in which those investigations and enquiries
were carried out (with or without malicious scuttlebutt) and to the alleged
delays in payment. Mr Gee refers, by way of analogy, to Steamship Mutual
Underwriting Association (Bermuda) v Sulpico Lines Inc [2008] 2 Lloyds
Law Rep 269, where the complaint as to the way in which a P and I Club had
handled the claims, including allegations of bad faith, fell within the
arbitration clause in the Club Rules.

iii)In any event, I am satisfied that all the claims now made are covered by the
release in respect of any claims it may have under the Policy. The approach
followed by the Court of Appeal in Ashville has been firmly disapproved. In
the Court of Appeal in Fiona Trust and Holding Corporation v Privalov
[2007] EWCA Civ 20, Longmore LJ, giving the judgment of the Court,
referred to Ashville at paragraph 13, and then stated (at paragraph 18):

As it seems to us, any jurisdiction or arbitration clause in

an international commercial contract should be liberally
construed. The words arising out of should cover every
dispute except a dispute as to whether there was ever a
contract at all Although in the past the words arising
under the contract have sometimes been given a narrower
meaning, this should no longer continue to be so.

In the House of Lords, reported at [2008] 1 Lloyds Law Rep 254, which,
particularly in the seminal decision of Lord Hoffmann, ratified the anti-
nitpicking approach of the courts to differences in such wordings in arbitration
or jurisdiction (or, by analogy, settlement) clauses (at paragraphs 11 to 13 of
his speech), the approach of the Court of Appeal was not only thus firmly
confirmed and adopted, but there was express approval of the judgment of
Longmore LJ by Lord Hoffmann (at paragraph 21), by Lord Hope at paragraph
26 and (by their agreement) by the rest of the House at page 261.

iv)The clean break principle is explained in Foskett: Law and Practice of

Compromise (7th Ed) at 5-22-33. He refers to BCCI v Ali [2002] 1 AC 251
where, at paragraph 23, Lord Nicholls stated:

The circumstances in which this general release was given

are typical. General releases are often entered into when
parties are settling a dispute which has arisen between
them, or when a relationship between them, such as
employment or partnership, has come to an end. They want
to wipe the slate clean. Likewise, the problem which has
arisen in this case is typical. The problem concerns a claim

Draft 23 June 2017 05:57 Page 11

 which subsequently came to light but whose existence was
not known or suspected by either party at the time the
release was given. The emergence of this unsuspected claim
gives rise to a question which has confronted the courts on
many occasions. The question is whether the context in
which the general release was given is apt to cut down the
apparently all-embracing scope of the words of the
release.

Foskett further there refers to what Lord Bingham in Ali, at paragraph 17,
describes as the reluctance [of judges] to infer that a party intended to give
up something which neither he, nor the other party, knew or could know that
he had. But, subject to that, the overriding approach is the wiping clean of
the slate, to which Lord Nicholls refers.

v) The Settlement Agreements brought the proceedings to a close, subject to

the stay imposed by the Tomlin Orders. All the claims now made were made,
or featured, in those proceedings. Insofar as the financial loss is now alleged to
be greater (by reference to an alleged loss in relation to three vessels rather
than one), such matters plainly were either known or capable of being known
or appreciated by the time of the Settlement Agreements, and are, in any event,
only an expansion or embellishment of the existing claims. Similarly, the fact
that such losses were allegedly caused only in part by the late payment, but in
part by the alleged malicious scuttlebutt, was also either known or capable of
being known. The revival of such claims now would be, Mr Swainston and Mr
Gee submit, an abuse of the process within the principle in Henderson v
Henderson, as explained and/or put into effect in Johnson v Gore Wood and
Stuart v Goldberg Linde [2008] 1 WLR 823. This simply serves to
emphasise that such claims fall within the wide definition of the Settlement
Agreements (see (ii) and (iii) above) and within the clean break/wiping the
slate clean principle, referred to in (iv) above.

vi)The words of Laurence Collins LJ in Satyam do not assist Mr Drake, on

the facts of this case, nor in any way take matters outside the general principle.
It is first of all clear that Laurence Collins LJ was dealing, in section 4 of his
judgment, with issues in relation to unknown claims. What he addressed in
his heading (quoted in paragraph 17(ii) above) was split into two: unknown
claims generally, and unknown claims involving an allegation of fraud. He is
not dealing at all with cases where, at the time of the settlement, the fraud was,
or was reasonably capable of having been, known to the parties. As for the
sentence upon which Mr Drake alighted in paragraph 82 of his judgment, it is
therefore taken out of context, and, if it purports to extend beyond unknown
claims of fraud, it must inevitably be obiter.

vii) The fact that the claims were not limited to monies recoverable
pursuant to the policy in respect of the loss of Alexandros T is only
emphasised by the inclusion in the settlement agreement of OME, which,
although named as an assured under the policy, had no entitlement to recover
under the policy, and of the other parties, against any claims by whom
Starlight and OME agreed to indemnify the CMI and LMI Defendants.

Draft 23 June 2017 05:57 Page 12

The Jurisdiction Clauses

20. It is common ground that there were exclusive jurisdiction clauses in the
insurance policies. It is also not in dispute that the clause in the CMI Settlement
Agreement is an exclusive jurisdiction clause. Although it is not determinative of
these applications, for reasons that will appear, I need to deal with the issue as to
whether the jurisdiction clause in the LMI Settlement Agreement should be construed
similarly.

21. On its face, as Mr Drake points out, the word exclusive is not used. However,
Mr Gee submits that it nevertheless should be so construed. He refers to a number of
authorities in which a jurisdiction clause not expressed to be exclusive has been so
construed. He refers to Briggs & Rees: Civil Jurisdiction and Judgments (5th Ed) at
4.45:

22. Where the agreement is to be construed according to English

law [such as in this case], there has been a noticeable judicial tendency
to resolve any ambiguity in the construction of the parties agreement in
favour of seeing it as one giving exclusive jurisdiction to the nominated
court. It is unnecessary that the agreement actually contain the word
exclusive in order to have this effect, but if the nominated court
would have had jurisdiction in any event, without reference to the
agreement, a court may wish to attribute some further effect to the
agreement, which will tend to lead in turn to its being seen as
exclusive.

23. I have been referred by Mr Gee to Sohio Supply Co v Gatoil (USA) Inc [1989]
1 Lloyds Law Rep 588 CA and to Svendborg v Wansa [1997] 2 Lloyds Law Rep
183, the latter a case in which, despite an express mention of exclusive jurisdiction in
the first part of the clause, it was unsuccessfully argued that there was therefore no
implication that the second part of the clause also provided for exclusive jurisdiction.
In Sohio, at 591, the Court of Appeal approved the then passage in Dicey & Morris,
which still survives today at 12-092:

24. Where the agreement is governed by English law, and in the

absence of explanation to the contrary, the court may conclude that if a
nominated court would have had jurisdiction by right in the absence of
the agreement, the agreement would be idle unless it conferred
exclusive jurisdiction on the nominated court.

25. In Continental Bank NA v Aeakos Compania Naviera SA [1994] 1 Lloyds

Rep 505 CA, Steyn LJ, after referring to Sohio, said it would be a surrender to
formalism to require a jurisdiction claim to provide in express terms that the chosen
Court is to be the exclusive forum. Article 23 of the Judgment Regulation itself (to
which I refer below) provides that a jurisdiction clause shall be exclusive unless the
parties have agreed otherwise.

26. I am satisfied that this which Dicey & Morris at 12-092 refers to as a
principle of interpretation applies in this case. In the absence of any argument that
the word exclusive was for some reason not explained or enunciated deliberately
left out, I am satisfied that, both by reference to the context, and to the fact that the

Draft 23 June 2017 05:57 Page 13

 provision would otherwise be idle, that the parties did mean to and intend exclusive
jurisdiction. I am influenced in particular by the fact that:

i) The insurance policy so provided. DSM Anti-Infectives BV v Smith Klein

Beecham plc [2004] EWCA Civ 1199 would suggest that that provision would
have applied to the settlement of a dispute about the policy even without
further provision in the Settlement Agreement.

ii) The proceedings to which the Settlement Agreements were immediately

referable were in this Court, and the Settlement Agreements were to be
enforced, as a result of the English Tomlin Orders, by this Court, by reference
to the express saving for the purpose of carrying into effect the terms agreed
included in those Tomlin Orders.

27. The Tomlin Orders

28. I now turn to the central question on the application, by reference to those Tomlin
Orders, namely whether the CMI and LMI Defendants are, pursuant to their primary
application before me, entitled to the relief they seek, by way of, as they assert,
carrying into effect the terms agreed in the Settlement Agreements.

29. Mr Drake submits that the Defendants are not entitled to proceed summarily, and
without issuing fresh proceedings, in respect of the relief they now seek. He relies
wholly on the decision of the Court of Appeal, reported, it seems, in The Independent
on 21 December 1987, in Hollingsworth v Humphrey [1987] CAT 1244. An
application to enforce a compromise contained in the schedule to a Tomlin order made
in 1978 was brought in 1985, by a motion seeking an order that the stay of
proceedings be lifted and the claimant be at liberty to proceed to trial; alternatively
that the terms of the compromise, being in respect of a binding contract for the sale of
a house, be carried into effect, with an enquiry as to the loss or damage which the
claimant would have suffered by reason of the defendants failure to effect the sale of
the property. Mervyn Davies J refused to lift the stay, by reference to the principle in
Cooper v Williams [1963] 2 QB 567, requiring good grounds to be shown. It was
apparent that there had been what was described as extraordinary inertia on Mrs
Hollingsworths side. For more than 6 years no step was taken to enforce the terms
of compromise.

30. The basis of the claim for lifting the stay appears to have been that the claimant
wished to regard the contract as repudiated. However, Mervyn Davies J did make an
order for an assessment of damages for breach of contract. The Court of Appeal
dismissed the appeal against the refusal to lift the stay. However, so far as the claim
for damages for breach of contract is concerned, Fox LJ, giving the only substantive
decision of the Court, allowed the appeal, concluding (on page 5):

31. The position, it seems to me, was that [the claimant] asserted
a cause of action and gave that up in consideration of the provisions of
the Tomlin order. Included in the provisions was that the agreement that
the action should be stayed except for the purpose of enforcement of the
term. If [the claimant] alleges a breach of the terms and subsequent
damage to her, it seems to me that her proper course is to sue for
damages in a separate action [I]t was not open to the judge to make

Draft 23 June 2017 05:57 Page 14

 an award of damages upon an application to enforce the terms of
compromise. It seems to me that, under the terms of the Tomlin order,
the only jurisdiction which he had in this action was to make an order
for the purpose of carrying into effect the terms of compromise. An
award of damages is not carrying the terms into effect. It is granting a
remedy for breach of contract. In my view, any claim by [the claimant]
for breach of contract must be pursued in a separate action.

32. Mr Swainston and Mr Gee criticise such conclusion by the Court of Appeal, but,
in any event, contend that they are in a position to distinguish it, upon a number of
grounds, to which I will refer. So far as their criticism is concerned, they note the
subsequent decision of Morritt VC, which Mr Drake submits to be wrong, such that I
should not follow it if I were tempted to do so, in Bargain Pages v Midland
Independent Newspapers [2003] EWHC 1887 Ch. In that case, Morritt VC
concluded that the CPR, and the Overriding Objective enshrined in and underlying the
CPR, entitled him to conclude that Fox LJs judgment was given against the
background of the RSC, not the CPR, and was inconsistent with the regime
introduced by the CPR (paragraph 43) such that (paragraph 44) he did not consider
that Hollingsworth would preclude an order for an enquiry as to damages sustained
in consequence of a breach of the terms of the settlement agreement contained in
the Tomlin order before him.

33. I am again firmly persuaded by the submissions of Counsel for the Defendants. I
approach the question first on the basis that Hollingsworth is correct and I am bound
by it, notwithstanding Bargain Pages:

i) Hollingsworth does not address such a clause as there is here, namely a

claim for an indemnity. It is wholly clear that enforcing the indemnity is
carrying into effect the terms agreed.

ii) Again, part of the relief sought by the Defendant is a claim for a
declaration. That too is neither even arguably caught by Hollingsworth nor
anything other than a carrying into effect of the Settlement Agreements.

iii)The same applies to the remedy of specific performance.

iv)Even if Hollingsworth is binding as to damages for breach of contract, it is

plainly not binding so far as concerns damages by reference to what used to be
Lord Cairns Act 1858, but which is now s50 of the Senior Courts Act 1981.
This not only permits damages to be given in lieu of, or substitution for, an
injunction or specific performance, but damages in addition to such remedies.
Insofar as damages are sought before me, they can be, and are, put as well by
reference to this jurisdiction as to the straightforward claim for damages for
breach of contract, and the measure would be the same.

34. If necessary, I would accept the fallback submissions of Mr Swainston and Mr

Gee as follows:

i) I would follow Morritt VCs decision and conclude, as he did, that the CPR
requires a less restrictive approach than the RSC to the courts jurisdiction to
enforce its own orders.

Draft 23 June 2017 05:57 Page 15

 ii) Mr Gee puts forward further or in the alternative the attractive submission
that the parties must be taken to have contracted on the basis that Morritt VC
was right as to the interpretation of the Tomlin Orders to which they were
agreeing in the Settlement Agreements. He refers to the words of Hobhouse LJ
in Toomey v Eagle Star Insurance Co Ltd [1994] 1 Lloyds Law Rep 516 at
520, and repeated in The Nukila [1997] 2 Lloyds Law Rep 146 at 152,
whereby:

iii) The principle has been stated on a number of occasions in the

field of commercial law where it is recognised that the parties enter
into contracts on the basis of the law as it has been stated in the
applicable authorities. For a Court, in deciding a dispute under a
commercial court, later to depart from those authorities risks a
failure to give effect to a contractual intention of those parties, as
evidenced by their contract entered into on a certain understanding
of the law.

iv)If necessary, Mr Swainston submits that I should conclude that the decision
in the Court of Appeal in Hollingsworth was per incuriam, because it did not
consider, no doubt because it was not argued, that the claim for damages is in
fact an enforcement of the secondary obligation of the parties under a contract,
and was thus contrary to the binding analysis of the law by the House of Lords
per Lord Diplock in Photo Production Ltd v Securicor Transport Ltd
[1980] AC 827 at 849. It is plain that Fox LJ did not address this question in
his short assumption that a claim for damages could not be said to be a
carrying into effect of the contract, although it may be that, in Hollingsworth,
the attention of the court was side-tracked by the very substantial delay and, in
particular, the assertion that the contract had been repudiated and the
repudiation accepted, which formed the basis of the primary claim for a lifting
of the stay. In this case, there is no doubt that the Defendants would be seeking
to enforce the secondary obligation under the contract of paying
compensation (damages) for non-performance of primary obligations (per
Lord Diplock at 849C). Mr Drake submits that there is a difference between
performance of the obligation and carrying into effect the terms, but I do not
accept that. It could be said if necessary also that there was no argument before
the Court of Appeal in Hollingsworth, and hence no appreciation of the
consequences of their judgment, by reference to the conclusion I have reached
at paragraph 28(iv) above, that there is no distinction between damages under
Lord Cairns Act and damages for breach of contract, and, if the former is
plainly included, it makes no sense to conclude that the latter is excluded.

35. In those circumstances, I do not need to consider the alternative and fallback case
for Mr Swainston that I should lift the stay in order to allow the relief claimed by way
of enforcement of the Settlement Agreement to achieve the result sought. By
reference to Cooper v Williams, there has to be good reason to lift a stay. On the face
of it, if I were really prevented by Hollingsworth from permitting the Tomlin Orders
to be enforced upon one or other of the grounds set out above, I would have wished to
conclude that there were good reasons to lift the stay, but, on the other hand, it seems
to me, that I would then be bound, if I had concluded I was bound, by Hollingsworth,
in which, as referred to in paragraph 26 above, such an alternative proposition was

Draft 23 June 2017 05:57 Page 16

 rejected by the Court of Appeal on the facts of that case. I see no need to lift the stay
when the availability of enforcement of the terms of the Tomlin Orders without doing
so is so plain.

36. Remedies

37. In those circumstances I am entirely satisfied that, subject to the question of any
stay sought by Mr Drake, I can and should determine the issues summarily.

38. For the reasons set out above, I conclude that, at English law, which, it is
common ground, is the law which I must apply, the bringing of the Greek claims is a
breach of the Settlement Agreements. It is also a breach of the jurisdiction clauses
contained in the Settlement Agreements (and for that matter in the insurance policies):
the jurisdiction clauses are plainly wide enough to cover the disputes in the English
and the Greek proceedings: see e.g. Continental Bank referred to in paragraph 22
above and DSM in paragraph 23(i) above.

39. As I have stated in paragraph 15 above, the Defendants do not seek, and would
not be entitled, to enjoin the Greek proceedings. The Greek court will now need to
proceed to consider those Greek proceedings, but, on the face of it, and at English
law, this Court is plainly first seised of the matters in issue, both in that they were
raised in these proceedings prior to the Settlement Agreements, and now by virtue of
their falling within the ambit of the Settlement Agreements, and consequently within
the Tomlin Orders, made in these proceedings.

40. There is no doubt that this action continues in existence and to have effect
notwithstanding the stay (see Rofa Sport Management AG v DHL International
(UK) Ltd [1989] 1 WLR 902 and Briggs & Rees at 2.236). The steps now taken to
enforce the Tomlin Orders are not in any way enlarging the original action, but are
taken in pursuance of it, and permitted by the Orders, as I have concluded. Even if it
were enlarging the proceedings, that would plainly not be, as is contended by Mr
Drake, a subversion of the effect of the Convention, as was concluded in a very
different situation in Knauf UK GmbH v British Gypsum Ltd [2002] 1 Lloyds
Law Rep 199, but would rather be consistent with the principle that all issues should
be tried in one court, being the court first seised of the dispute, as recommended by
the Advocate General in The Tatry [1999] 2 WLR 181 at 186G-H and 188G-H,
exemplified in Masri v Consolidated Contractors International (UK) Ltd (No 3)
[2009] QB 503 CA, where steps were taken after judgment in the original action, and
as explained by Rix LJ in Stribog Ltd v FKI Engineering Ltd [2011] 2 Lloyds Law
Rep 387, at paragraphs 115 and 128.

41. The damages sought are in effect in respect of the loss and damage which the
CMI and LMI Defendants have already incurred in dealing with and defending the
Greek proceedings, and of course the indemnity sought is for the sums incurred in
respect of such proceedings brought by others than Starlight and OME, but falling
within the category covered by the indemnity. There is, I am satisfied, no
jurisdictional restriction upon the making of an order for such damages or for such
indemnity: see Ellerman Lines Ltd v Read [1928] 2 KB 144 CA, Union Discount
Co v Zoller [2002] 1 WLR 1517 CA, CMA CGM SA v Hyundai Mipo Dockyard
Co Ltd [2009] 1 Lloyds Law Rep 213, and Briggs & Rees at 5.59 and Briggs:
Agreements on Jurisdiction and Choice of Law at pp301-302.

Draft 23 June 2017 05:57 Page 17

 42. The draft orders that were put before the Court by the CMI and LMI Defendants
were considered in some detail. I am satisfied that the English court is entitled to
pronounce its conclusions and grant remedies as sought, provided that none of them
prevents access to the Greek court by way of injunction. It will be a matter for the
Greek court to address, in the light of the conclusion of this Court, whether the
English courts do indeed have exclusive jurisdiction in respect of the matters before
me, pursuant to Article 23 of the Judgments Regulation (Prorogation of
Jurisdiction), and whether it has jurisdiction; and further whether it can and should
recognise declaratory and other relief granted by this Court, which I have concluded
to be the court first seised, just as the English court recognised declaratory relief given
by the Spanish court as the court first seised in The Wadi Sudr [2010] 1 Lloyds Law
Rep 193 CA. In the light of my conclusions above, and subject always to Mr Drakes
application for a stay pursuant to Article 28, to which I will come below, there was, in
fact, little dispute as to the terms of the relief sought. I deal with only two specific
matters.

43. Indemnity

44. Mr Drake did not contest Mr Gees case that I could, if I so decided, fortify the
indemnity. The relevant indemnity clauses are, as Mr Gee persuasively argued in his
skeleton argument, examples of an indemnity which is in part in respect of loss
already incurred, but in part quia timet. Rix LJ made plain, in Rowland v Gulfpac
Ltd [1999] Lloyds Law Rep (Banking) 86 at 97-98, that the court has an equitable
jurisdiction to grant quia timet relief to a party with the benefit of an indemnity before
loss has occurred, and that there is an equitable right to create and preserve a fund to
protect the party to be indemnified. Because no injunction can be sought, it is possible
that the Greek proceedings will be continued, at least until a decision by the Greek
court, and, in the absence of mandatory relief to prevent the proceedings (such as
would have been justifiable by reference to Ascherson v Tredegar Dry Dock &
Wharf Co Ltd [1909] 2 Ch 401, Re Anderson-Berry [1928] Ch 290 and The
Messiniaki Tolmi (No 2) [1982] QB 1248 CA), the mandatory injunction to require a
fund to be set up, from which indemnification can be made, is still plainly similarly
justifiable.

45. As Mr Gee puts it, the constitution of such a fund within the jurisdiction, in
London, will ensure that the LMI Defendants are held harmless, and are not required
to use their own funds to discharge liabilities falling within the ambit of the contract
of indemnity. He refers to the cloud hanging over the Defendants, referred to by
HHJ Chambers QC in Papamichaels v National Westminster Bank plc [2002] 1
Lloyds Law Rep 332, where an injunction was considered to be justified in order to
prevent the jurisdiction of the court from being stultified (para 88). The creation of a
fund is simply a modern exemplar of the courts jurisdiction to make any interlocutory
order reasonably asked as ancillary to the administration of justice, which long
antedated the invention of the freezing order, as illustrated in Smith v Peters [1875]
LR 20 Eq 511. Mr Swainston associated himself with Mr Gees arguments, and I
agree that it is appropriate that there should be such an order, in respect of both sets of
Defendants, with liberty to restore before me to consider the issues both of damages
to date and of indemnities for the future, including the establishment of an appropriate
fund.

46.

Draft 23 June 2017 05:57 Page 18

47.

48. Tomlinson Js Order

49. The other item of relief sought with which I must deal specifically is in respect of
the application by both sets of Defendants that I should declare that, by order of
Tomlinson J, dated 14 December 2007, it was determined that, under English law as
the governing law of the policy, the claimant has no claim against the [respective]
defendants for damages for late payment of the claim made by the claimant under the
policy in respect of the loss of the Alexandros T.

50. I have already recited, in paragraph 7 above, that Tomlinson J made such a
decision. It is obviously important, in that a very substantial part of the claims made
for actual financial losses in the Greek proceedings is said to arise (or, as a result of
the proposed clarification of the pleadings, arise in part) by reference to the alleged
failure by the Defendants to make payment in accordance with their obligations (until
payment in accordance with the Settlement Agreements). Mr Drake made a point that
the decision of Tomlinson J was made, so far as the LMI Defendants are concerned,
one day after the LMI settlement agreement, but (i) the proceedings were still in effect
at that stage, the Tomlin Order not imposing a stay until six days later and (ii) when
the Tomlin Order was imposed, it was backdated, but backdated not to 13 December,
the date of the settlement, but to 14 December, the date of Tomlinson Js decision.

51. In any event, the decision by Tomlinson J was made at a hearing when Starlight
was represented by leading Counsel, put forward the arguments, and they failed.

52. Accordingly, it is material both to the contention that the claims now made in the
Greek proceedings were already made in the original proceedings in this court and
consequently were, as I have concluded, covered by the Settlement Agreements, but it
is also relevant to the fact that those claims were, in such proceedings, made and
resolved by a decision of the English court that, at English law, they could not be
brought. Consequently, as to the relief sought by the Defendants before me, it is
correct that Tomlinson J so determined, and if the Greek court wishes to know the
answer to the question as to whether the claims are sustainable at English law, it can
see the decision of Tomlinson J, as further explained in this judgment. I do not
however see any point in making a declaration as to what Tomlinson J decided. It is
supererogatory to declare what has already been declared.

53. The Stay Application by Starlight

54. Such application was very late. Applications were issued by Starlight, OME and
the co-Assured on 24 and 28 November, the latter being the very date on which the
hearing before me commenced. As set out in paragraph 14(i) above, OME, having
been joined as a Part 20 Defendant in the original action, had actually put in both an
Acknowledgment of Service and a Defence (in terms to which I will refer below),
which Mr Gee submits prevents OME, in any event, from challenging the jurisdiction
by way of Article 28. He refers to Midland Resources Ltd v Gonvarri Industrial
SA [2002] I.L.Pr 8, Montrose Investments v Orion Nominees [2002] I.L.Pr 21, The
Burns-Anderson Independent Network plc v Wheeler [2005] I.L.Pr 38 and Briggs
& Rees at pp567-8.

Draft 23 June 2017 05:57 Page 19

 55. However this is all the more significant in relation to the stay application made in
relation to actions 702 and 1043, to which I shall refer below. As to the original
action, 815, where I have concluded that the Defendants are entitled, without lifting
the stay, to enforce the terms of the Tomlin Order, it is quite plain that this Court is
first seised (indeed I would also have been so satisfied had I considered it appropriate
to lift the stay). There is thus no jurisdiction in this Court, as the court first seised, to
grant a stay in respect of the relief sought in the original action, since Article 28
expressly provides that Where related actions are pending in the courts of different
Member States, any court other than the court first seised may stay its proceedings,
this Court, being the court first seised, cannot stay its proceedings. I am therefore
satisfied that there is nothing to prevent my making the order sought in the original
action in respect of these Settlement Agreements, upon the basis of my conclusion
that those Settlement Agreements both preclude the bringing of the claims now sought
to be brought in the Greek court and trigger the enforcement of the Indemnity. The
decision falls to be made both by this Court and at English law, and I so make it,
within the original action. In any event, Article 23 provides that:

56. If the parties, one or more of whom is domiciled in a Member

State, have agreed that the courts of a Member State are to have
jurisdiction to settle any disputes which have arisen or which may arise
in connection with a particular legal relationship [so that] those courts
have jurisdiction. Such jurisdiction shall be exclusive unless the parties
have agreed otherwise.

57. As to Actions 702 and 1043, referred to in paragraphs 14(ii) and (iii) above, the
Defendants to those actions, Starlight, OME and the co-Assured, have put in
Acknowledgments of Service. Not only have they not made, until just prior to this
hearing, any application for a stay pursuant to Article 28, but they are out of time to
do so Mr Gee refers to the authorities set out in paragraph 43 above and, in any
event, have submitted to the jurisdiction by serving Defences which do not contain a
challenge to the jurisdiction of the English court to determine the two actions. There
is, rather, a substantive defence on the merits contained in the Defences (identical to
that of OME as Part 20 Defendant in the original action as referred to in paragraph 43
above), by way of an assertion that:

58. The claims in the Greek Proceedings fall outside the

jurisdiction clause in the policy and the jurisdiction clause in the
Settlement Agreement. It is respectfully denied therefore that the High
Court of Justice of England and Wales has jurisdiction to determine the
claims in the Greek Proceedings.

This is not a challenge to the jurisdiction of the English court, but a substantive
defence to the claim of breach of the exclusive jurisdiction clause.

59. Action 1043 in fact only addresses the exclusive jurisdiction clauses, because the
co-Assured are not parties to the Settlement Agreements, and I am satisfied, for the
reasons set out above, and on a summary basis, that:

i) the Greek claims brought by the co-Assured do fall within the jurisdiction
clauses in the Policies.

Draft 23 June 2017 05:57 Page 20

 ii) their claims can only be brought in this country.

iii)if pursued, they would fall within the indemnities given by Starlight and
OME.

60. I am satisfied that, although in the case of these two actions the English court is
not first seised, the stay applications must fail. First, they are out of time and
inconsistent with the submission to the jurisdiction that has already occurred by virtue
of the Acknowledgments of Service and the Defences. Further and in any event, I
would refuse a stay by reference to the provisions of Article 23, and the prorogation of
English jurisdiction by virtue of the exclusive jurisdiction clauses (in the case of
Action 702) in the Policies and in the LMI Settlement Agreement, and (in the case of
1043) in the Policies.

61. For the same reason, in Action 702, I grant summary relief under Part 24 to what
is in fact the same effect as the relief sought and granted in the original action, and in
the case of Action 1043, I grant, pursuant to Part 24, because I am satisfied there is no
defence, the declaratory and other relief to the effect that the co-Assured is in breach
of the relevant policy and the exclusive jurisdiction clause contained in it, by
commencing and continuing with the Greek claims.

62. Conclusion on the Main Applications

63. Accordingly, I find for the LMI and CMI Defendants in respect of all the relief
they seek against Starlight, OME and the co-Assured, save in respect of their
applications in respect of the Order of Tomlinson J (discussed in paragraphs 39 to 42
above), and reject the cross-applications.

64. The intervention in the original action by HD (referred to in paragraph 14(v)

above).

65. HD, the Intended Defendants, wish to be joined to the original action as
defendants pursuant to CPR 19.2(2)(b), which reads:

66. The court may order a person to be added as a new party if

67.

68. (b) there is an issue involving the new party and an existing
party which is connected to the matters in dispute in the proceedings,
and it is desirable to add the new party so that the court can resolve
that issue.

69. If joined, HD will in due course wish to assert that they are entitled to the benefit
of the Settlement Agreements and/or that it is an abuse at English law for Starlight
and OME to have brought or to bring proceedings against them. The original action
led to the Settlement Agreements, which caused the proceedings to be stayed, and I
have already concluded above that those Settlement Agreements are subject to
English law and the exclusive jurisdiction of the English courts. HD wish to submit,
within the original action, that the effect of the Settlement Agreements, and of the
Tomlin Orders staying the proceedings save for the purpose of putting the Settlement

Draft 23 June 2017 05:57 Page 21

 Agreements into effect, is that Starlight and OME cannot now pursue them, at any
rate in Greece.

70. Mr Drake submits that this is an overt attempt by HD to subvert the Judgment
Regulation, by seeking to inveigle themselves into the original action after its
effective termination, so that they are then able to assert in the Greek proceedings that
the Greek court is second seised, whereas, if they were to issue fresh proceedings in
this Court, it would be apparent that the Greek court was first seised and the English
court second seised, which they submit is the reality.

71. Mr Bailey submits that:

i) As will appear, the English court is the best and only court to conclude what
is the effect of the Settlement Agreements and whether fresh proceedings
would be an abuse.

ii) Far from offending against the spirit of the Judgment Regulation, the Court,
if it acceded to their Part 19 application, would be acting in accord with the
principles set out in paragraph 34 above. The Advocate General in The Tatry
stated, at 188H, that if it were not possible, under the rules applicable in the
jurisdiction where the first action is pending, to extend its subject matter by
making further claims or raising new grounds of defence, there would be no
opportunity to deal with all aspects of the dispute in all cases where an action
of more limited scope was commenced first. Although this was only the
opinion of the Advocate General, the court did not expressly dissent from it;
and the principle was endorsed by Rix LJ in the Court of Appeal in Stribog,
whereby, while allowing for the possibility (at paragraph 128) that the
introduction of entirely new causes of action or parties is to be recognised as
the bringing of entirely new proceedings, so that the timing of seisin has to
be looked at from that point of view, he otherwise concluded that the
expansion of an originally unrelated first action to include new claims or
defences connected with it could and should, in rendering the two actions
related, result in the court in which the first action, thus altered, had been
brought being (or becoming) the court first seised.

72. There appears to me to be no doubt as to the jurisdiction to grant, and the

appropriateness in this case of granting, an application under Part 19.2(2)(b), so far as
English procedural law is concerned, on the facts of this case. Mr Bailey refers to
Dunlop Haywards (DHL) Ltd v Erinaceous Insurance Services Ltd [2008]
EWHC 520, where Field J said (at paragraph 44) that it was not necessary to show
that any existing party was able to bring a claim against the party sought to be joined.
This was approved in the Court of Appeal at [2009] EWCA Civ 354, and followed in
Shetty v Al Rushaid Petroleum Investment Co [2011] EWHC 1640. What was
necessary was simply to satisfy the requirements of Part 19.2 above, namely that (i)
there was an issue involving the new party and an existing party (ii) connected to the
matters in dispute in the proceedings and (iii) it is desirable to add the new party so
that the court can resolve that issue. There is clear authority, in The Selby Paradigm
[2004] 2 Lloyds Law Rep 714 and Prescott v Dunwoody Sports Marketing [2007]
EWCA Civ 461 (particularly at paragraph 23) that the court has power under CPR
19.2 in relation to joinder even after judgment: a fortiori after a stay which, as I have
concluded above, permits the bringing and determination of proceedings to carry a

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 settlement agreement into effect see similarly in Rofa Sport, referred to in
paragraph 33 above, where the court had jurisdiction to add a party under RSC 15(6)
(2) to an action which had been stayed.

73. Mr Bailey relies upon a number of factors in respect of the issues of

connectedness and desirability:

i) He wishes to submit (and it appears clear from the cases put forward by
CMI and LMI not least in relation to their own employees that they do
also) that the Settlement Agreements on their true and proper construction
extend to claims against, and/or losses incurred as a result of claims against,
the parties or their privies. This question will be decided at English law, but, so
far as the Judgment Regulation is concerned, and the applicability of Articles
27 and/or 28, Mr Bailey points out that there is authority in respect of parallel
proceedings for treating different parties as in effect the same: an insurance
company and its insured in Drouot Assurances SA v Consolidated
Metallurgical Industries [1998] ECR I-3075 and a liquidator and the
company in liquidation in Re Cover Europe Ltd [2002] 2 BCLC 61.

ii) English law will need to decide whether it is, as Mr Bailey asserts, an abuse
of the process for Starlight and its associates to sue HD in respect of the same
matters as were covered in the original action and settled by the Tomlin
Orders: Mr Bailey refers to the significant Court of Appeal decision of Aldi
Stores Ltd v WSP Group plc [2008] 1 WLR 748, in which the Court
concluded (per Thomas LJ at paragraph 10) that the fact that the defendants to
the original action and the proposed new action were different does not operate
as a bar to the application of the principle of abuse of the process.

iii)Mr Bailey points out the importance of the impact of the decision of
Tomlinson J in the original action, which would constitute at English law res
judicata as against the Claimant, but in any event constitute a statement of
binding English precedent in relation to a claim which constitutes substantially
the greatest financial element of the Greek claims.

iv)Mr Bailey also refers to the frequency with which the Greek pleadings
direct attention to the handling of, and procedures in, the original action,
including the allegations of breaches of the CPR.

74. I would find it difficult to contest these submissions, and in his skeleton argument
Mr Drake put forward the following submissions, which do not amount to a
satisfactory answer.

i) He points out that the action is stayed, such that no further steps may be
taken. Insofar as this is a submission that there cannot be a Part 19 joinder
after a stay or a judgment, I reject that submission for the reasons referred to
by Mr Bailey, by reference to authority (paragraph 54 above).

ii) He further submitted that the Court did not have the power to grant the
relief, because its powers are limited by the Tomlin Orders. Insofar as this is a
repetition of his submissions made during the main application, by reference to
Hollingsworth, I have already rejected those contentions. Insofar as he is

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 submitting that there are not issues raised in connection with the putting into
effect of the Settlement Agreements (or relating to their breach), I do not
accept those submissions, since the issues summarised above are plainly
interconnected with the Settlement Agreements and their effects and
consequences.

iii)He addresses CPR 19.2(2)(a), but that is not relied upon by Mr Bailey.
Contrary to his submissions, I am satisfied that there are, notwithstanding the
stay, and in the light of my judgment, not least because the questions of
damages and indemnity remain to be adjudicated, issues involving HD and
Starlight, OME and the LMI and CMI Defendants, connected to the matters in
dispute in the original action, and it is desirable to add HD for the purpose of
resolution of those issues.

75. The fundamental objection which Mr Drake puts forward is however not by
reference to what might otherwise be appropriate by way of a domestic applicability
of Part 19, it is his case that, as in Knauf, the overt purpose of HD is to subvert the
Judgment Regulation, and anticipate the result in Greece, by converting HDs claim
into proceedings of which the English Court, instead of being second seised if brought
by fresh action, would now be first seised.

76. Mr Bailey, while relying upon the contentions which I have already summarised
in paragraph 55 above, sought to meet this allegation as to motivation. He drew my
attention to Alan Barton v Golden Sun Holidays [2007] EWHC B6 QB, in which, in
relation to a Part 20 application, Wyn Williams J pointed (in paragraphs 25-26) to a
decision of the European Court relating to Article 6(2) of the Convention (GIE
Reunion Europnne v The Zurich Espania [2005] ECR I-40), in which the
European Court stated (at paragraph 33) that Article 6(2) of the Convention does not
require the existence of any connection other than that which is sufficient to establish
that the choice of forum does not amount to an abuse. However insofar as such is
relevant, Mr Bailey submitted that it could not possibly be said that the choice of an
English forum in this case could be an abuse, when it was, as he submitted, the most
natural forum for the resolution of the issues between the parties. But, more
relevantly, he drew my attention to Shetty (referred to in paragraph 54 above), in
which the learned Judge, Mr Pymont QC, concluded that the application under Part
19.2(2)(b) was not flawed, if otherwise justified, by reference to the motive for its
application. He said (at paragraph 23):

77. If (as I have decided) the joinder of ARPD is desirable to

enable the court to resolve the issue in the Employment Action against
Mr Shetty, the fact that joinder will also enable ARPD to bring claims
against Mr Caplis and Mr Wight cannot make joinder undesirable or
otherwise disentitle the Applicants from having recourse to CPR r
19.2(2)(b).

78. I found the arguments evenly balanced, but I was finally convinced by the
submission of Mr Bailey in reply. He pointed out that, but for the breach of the
exclusive jurisdiction clauses, which I have found to be established, any further
claims against the CMI and LMI Defendants (and, if HD be right, their privies) by
Starlight, OME and the co-Assured would and should have been (if permissible at all)
in this jurisdiction. The assertion of subversion by HD of the Regulation is in fact to

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 turn the Regulation on its head, in the light of Article 23. In those circumstances I am
and remain simply of the view that the provisions of CPR Part 19.2(2)(b) have been
made out, and that permission should be given to HD to be added as new parties to the
original action.

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