England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE QBCMI/96/0353/B

(MR JUSTICE COLMAN )

Royal Courts of Justice

Strand

London WC2

Wednesday, 5 February 1997

B e f o r e:

LORD JUSTICE BUTLER-SLOSS

LORD JUSTICE PETER GIBSON

LORD JUSTICE POTTER

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COMDEL COMMODITIES LIMITED

Plaintiff/Appellant

- v -

SIPOREX TRADE S A

Defendant/Respondent

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(Handed Down Transcript of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 831 3183

Official Shorthand Writers to the Court)

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MR SIMON GAULT (Instructed by Messrs Clyde & Co, London, EC3M 1JP) appeared on behalf of the Appellant

MR KENNETH ROKISON QC & MR PHILIP EDEY (Instructed by Messrs Middleton Potts, London, EC1A 3LD) appeared on behalf of the Respondent

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J U D G M E N T

(As approved by the Court )

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©Crown Copyright

LORD JUSTICE POTTER:

This is an appeal by the plaintiffs ("Comdel") from a decision of Colman J. made on 24th November 1995, when on the application of the defendants ("Siporex"), he made an order discharging a Mareva injunction granted to Comdel as long ago as 13th May 1986, but stayed execution of the order pending determination of this appeal. The sum covered by the injunction was $1,887,200 which represents an amount paid on 13th May 1986 by Comdel's bankers under performance bonds issued by them in support of Comdel's obligations as buyers from Siporex of 11,000 tons of Cotton Seed Oil and 21,000 tons of Tallow, under two contracts dated 19th October 1984. The breaches concerned were the failure by Comdel to open letters of credit in favour of Siporex complying with the contract terms that payment would be by confirmed, irrevocable, transferable letters of credit to be at Siporex's bank and fully operable by latest end November/ first week in December 1984

Comdel sought to recover the difference between the amount their bank paid to Siporex under the performance bonds and the loss (if any) suffered by Siporex as a result of Comdel's breaches of contract. Despite the relative simplicity of this issue, the parties have, over a period of some 10 years, made almost no progress towards its disposal. However, if the order discharging the Mareva injunction takes effect, so that the sum caught by the injunction is freed into the hands of Siporex, that sum (and any other assets of Siporex) are unlikely to remain available to satisfy any award which Comdel may obtain.

THE PROCEDURAL HISTORY

On 16th January 1985 Comdel commenced arbitrations ("the 1985 arbitrations") against Siporex asserting that Comdel were not in breach of contract in relation to the letters of credit and that Siporex were not entitled to invoke the performance bonds. On 29th November 1985 the umpire in those arbitrations held that Comdel had failed to open conforming letters of credit and had no claim for breach of contract against Siporex.

On 25th February 1986 Comdel wrote to the 1985 arbitrators submitting that it was an implied term of the contracts that Siporex had to account to Comdel for any balance of monies paid under the performance bonds after deduction of Siporex's loss arising from Comdel's breach of contract. Siporex, however, issued an Originating Summons for a declaration that Comdel were not entitled to refer this submission to the 1985 arbitrators and sought an injunction restraining Comdel from proceeding with the arbitration in respect of that submission. On 27th February 1986 Comdel obtained a Mareva injunction in support of their claims.

Bingham J. subsequently held in Siporex -v- Comdel [1986] 2 Lloyd's LR 428 that the 1985 arbitrators had no jurisdiction to adjudicate on the new submission and that there would have to be a fresh reference to arbitration. He discharged the Mareva injunction on the grounds that, when it was obtained, Comdel did not have an accrued course of action.

On 13th May 1986 Comdel commenced new arbitrations ("the 1986 arbitrations"), and obtained the Mareva injunction with which this application for leave to appeal is concerned. Comdel faced a potential problem in the 1986 arbitrations because, under the FOSFA rules of Arbitration and Appeal, Comdel's claims had become barred on 31st May 1985 (i.e. almost a year before the bank paid Siporex on 13th May 1986, the date at which Comdel's cause of action accrued in respect of any sums so paid). Accordingly Comdel issued an Originating Summons seeking an extension of time under S.27 of the Arbitration Act 1950 and a declaration that their claims were not time-barred. Siporex for their part applied for a stay of Comdel's action under S.1 Arbitration Act 1975 . Steyn J. decided in Comdel -v- Siporex [1987] 1 Lloyd's LR 325 that Comdel's application for an extension of time was premature. The issue of time-bar had first to be determined by the 1986 Arbitrators. He adjourned the application for extension of time.

On 31st March 1987, the umpire in the arbitrations ruled that the claims were indeed time-barred and refused to extend time, that ruling being upheld by the FOSFA Board of Appeal on 19th October 1987.

Comdel obtained leave to appeal to the Commercial Court, whence the case made its way to the House of Lords. It was held by the House of Lords in Comdel -v- Siporex [1990] 2 Lloyd's LR 207 that S.27 conferred jurisdiction on the Court to extend time for the commencement of arbitration, notwithstanding the fact that a discretion to extend time was also conferred on arbitrators by the relevant arbitration rules.

On 22nd June 1990, Comdel wrote to the arbitrators asking for their approval to bring the matter directly before the FOSFA International Board of Appeal. The arbitrators refused that application on 26th November 1990. On 24th January 1991, the arbitrators ordered new pleadings following which, on 16th April 1991, Comdel requested an order for discovery which was made in October 1991 in respect of any Siporex documents relating to any loss allegedly suffered by Siporex.

Such discovery as was given was completed in June 1992. Thereafter Comdel took no further steps in the arbitration until shortly before 17th January 1994 (a delay of 19 months). Comdel changed their solicitors twice during that period but appear to have done little else of significance. However, in January 1994, the matter was vigorously brought to life by Messrs Clyde & Co, who thereafter corresponded with Siporex's solicitors with a view to progressing Comdel's claim. This initiative provoked an application by Siporex to strike out those claims under S.13A Arbitration Act 1950 .

On 2nd November 1995, Mr. R.W. Rookes, the umpire appointed in the 1986 arbitrations, dismissed Comdel's claims for want of prosecution. Comdel forthwith appealed to the FOSFA Board of Appeal, which appeals are still pending.

On 17th November 1995 Siporex applied to discharge the Mareva injunction granted some 9 years earlier on the ground of delay. On 24th November 1996 Colman J. acceded to that application and made the order which is the subject of this appeal.

Comdel appeal on the basis that, while recognising that the question of discharge was a matter for the discretion of the Judge, the discretion which he exercised was based upon or at least substantially affected by two particular errors. However, before turning to consider the two alleged errors, it is appropriate briefly to consider (a) the merits of Comdel's claim against Siporex apart from the question of limitation and (b) the merits of Comdel's appeal to the FOSFA Board of Appeal, pending which they contend that the Mareva injunction should be continued.

Comdel submit that they have a strong case on the merits in their claim against Siporex. The substantive issue between the parties is whether, as Siporex contends, Siporex are entitled to keep the full amount paid under the performance bonds regardless of the amount of damage which Siporex suffered as a result of Comdel's breach of the original contracts of sale.

The law in this respect has recently been the subject of an illuminating decision of Morison J. in Cargill International SA -v- Bangladesh Sugar and Food Industries Corporation [1996] 2 Lloyd's LR 524 in which the authorities are reviewed, most notably decisions in two Australian cases and dicta of Lord Denning MR in State Trading Corporation of India Limited -v- E.D. & F. Man (Sugar) Limited , July 17th, 1981, transcript.

Those authorities are to the effect that it is implicit in the nature of a performance bond that, in the absence of some clear words to a different effect, when the bond is called, there will at some stage in the future be an "accounting" between the parties to the contract of sale in the sense that their rights and obligations will finally be determined at some future date. The bond is a guarantee of due performance; it is not to be treated as representing a pre-estimate of the amount of damages to which the beneficiary may be entitled in respect of the breach of contract giving rise to the right to call for payment under the bond. If the amount of the bond is not enough to satisfy the seller's claim for damages, the buyer is liable to the seller for damages in excess of the amount of the bond. On the other hand, if the amount of the bond is more than enough to satisfy the seller's claim for damages, the buyer can recover from the seller the amount of the bond which exceeds the seller's damages.

It does not appear that there is anything in the words of the contracts of sale in this case to exclude the implication that there would at some stage be an "accounting" between the parties in the sense that their rights and obligations would be finally determined at some future date.

So far as the question of loss is concerned it is not apparent that Siporex suffered any substantial loss as a result of Comdel's breach of contract. At a much earlier stage of the litigation, Staughton LJ, [1989] 2 Lloyd's LR 13 at 15, said:

"There is some evidence, albeit meagre, that [Comdel]

bought goods elsewhere, at a slightly higher price

so that they suffered a modest loss through their own

default. What is conspicuously absent is evidence

that [Siporex] suffered any loss at all; if the market

price had risen since October 19, they would not have

lost anything, save perhaps some minimal resale

expenses. In view of the course these proceedings

have taken, I would be confident that there would have

been some evidence of it if [Siporex] had suffered

substantial loss. So it seems that the amount claimed

under the performance bond would be an uncovenanted

benefit or windfall, of a very large amount".

On the evidence available before us, that remains the position to this day.

Mr. Rokison QC for Siporex has argued before us (a) that, if necessary, he would seek to distinguish the Cargill International case on the grounds that a principle which appears to apply to performance bonds in the context of building cases and the seller's obligations under a contract of sale should not be extended to apply to a bond given in respect of the buyer's obligation to pay the contract price; (b) that no assumptions should be made as to whether Siporex have suffered damage since that is a matter yet to be determined at arbitration should Comdel's FOSFA appeal be allowed. For my part (without so deciding), I found neither submission convincing and I am prepared to assume that, on the merits, Comdel's claim is a strong one.

MERITS OF FOSFA APPEAL - LIMITATION .

In his awards, Mr. Rookes analysed 6 successive individual periods of delay. He concluded that only during the fifth such period, namely the 19 month period 23rd June 1993 - 21st January 1994 referred to above, could it be said that Comdel failed to take proper steps in the arbitration. In respect of the other 5 periods he found that there was no undue delay, or, if there was, it was not attributable to Comdel. He held that:

"Given the long history of this dispute, it is

difficult to relate any of those attributes

[which represented prejudice to the respondent]

to any specific period out of the total time.

I am not prepared to find that the memories of

witnesses, the availability of evidence or the

conduct of the parties were diminished in any one

period rather than any other".

Based on that passage, Mr. Gault for Comdel submitted that Mr. Rookes could not have been satisfied that Siporex had satisfied the requirements of S.13A(1)(b) Arbitration Act 1950 and that he should have held that Siporex had failed to establish matters required to justify a dismissal of Comdel's claim. It is submitted that, in his analysis of the total period, Mr. Rookes lost sight of the fact that, in order to strike out Comdel's claim he had to be satisfied that the culpable delay by Comdel in pursuing their claim caused either a substantial risk that it was not possible to have a fair resolution of the issues in the claim or that it caused more than minimal prejudice to Siporex. It is said Mr. Rookes erred because, in essence, he held that any delay, regardless of which party caused it, was sufficient to justify dismissing the claim if the total period of delay caused prejudice, as opposed to concentrating upon the question (as to which he could not have been satisfied) that the 19-month period significantly added to the prejudice otherwise caused.

I do not propose to set out the various passages of Mr. Rookes' award which it is necessary to study to see whether Mr. Gault is correct in his criticism. Suffice it to say, his task will not be at all easy in the light of the most recent observations of this Court upon the issue of prejudice and the propriety of inferring it in cases of cumulative delay (see Shtun -v- Zalejska [1996] 1 WLR 1270). However, what is clear is that, in relation to the fifth period, Mr. Rookes stated:

"Furthermore, when Discovery was completed, the

Buyers did nothing at all for 19 months, which in my

view was sufficient in itself to warrant dismissal.

In total, from the date of the House of Lords'

judgement, more than three and a half years had

passed without significant progress. Such delay

was in contravention of any duty owed by Buyers

to Sellers to proceed with the case expeditiously.

The delay was certainly in contravention of any

duty owed by Buyers to Sellers in respect of the

Mareva injunction, and I find such a delay in dealing with the Mareva injunction caused serious prejudice to Sellers".

In that passage it is quite clear that Mr. Rookes found that Siporex suffered prejudice from the further 19 month period during which they were subject to the continuing Mareva injunction. It seems to me that was a finding which the arbitrator was entitled to make and it is not one which could be answered by the suggestion either that (a) Siporex had no moral right to use the money or (b) that Siporex could and should (if prejudice were really being suffered) have applied for discharge of the injunction at that stage. As to (a) Mr. Gault has not sought to argue that, had the injunction been discharged before the hearing of the arbitration, Siporex would be other than entitled to use the money for its own purposes pending such "accounting" as might take place. As to (b) it is not in principle a defence for a plaintiff, in response to a striking out application, to suggest that the defendant should have taken positive steps himself to progress the action or to limit any ongoing prejudice being occasioned to him by the plaintiff's failure to proceed to trial.

Again, however, it is no part of this Court's task to pre-judge the outcome of the FOSFA appeal if the matter proceeds, not least because it is common ground that the FOSFA Board of Appeal acts by way of a complete re-hearing, rather than simply as a body reviewing, and only interfering with, the arbitrator's exercise of discretion on the basis of well-defined principles. Accordingly, I approach this case on the basis that the FOSFA appeal is arguable.

THE DECISION OF COLMAN J.

Having dealt briefly with the history, the Judge accepted that there was only one period of time (the fifth period) during which it could be said that Comdel were clearly at fault in not pursuing the proceedings. He commented that he had before him no explanation as to why that period of delay had occurred. He accepted that, as from January 1994, Comdel had been getting on with the matter through Clyde & Co. He also accepted that the position was that if the injunction were discharged there would be no purpose in Comdel continuing with the proceedings, notably the appeal to the FOSFA Board of Appeal. He noted also that the money the subject of the Mareva injunction had been sitting in a London bank in a deposit account earning interest for the benefit of Siporex.

In reaching his decision, the Judge emphasised the strict view that the Court takes of the duty upon a plaintiff or claimant to pursue proceedings with proper expedition in a case where a Mareva injunction has been granted for his benefit. He referred in particular in this connection to the decision of this Court in Town and Country Building Society -v- Daisy Star Ltd , The Times, 16th October 1989. He observed that, where culpable delay had occurred, one of the questions for consideration by the Court was whether any such delay was continuing or merely historic in the sense that it had happened at some stage well before the application to discharge the injunction had taken place but that, since that time, the claimant or plaintiff had prosecuted the proceedings with appropriate dispatch. In that respect, he held that certain correspondence between the parties in January 1994 when Clyde & Co came on the scene, amounted to an agreement that time would be "frozen" at that point for the purpose of considering whether or not Siporex were entitled to apply to discharge the Mareva injunction on the grounds of Comdel's delay. He stated:

"It is right that I should treat the correspondence

which took place at the beginning of 1994 as roughly

equivalent to a notice of intention to proceed and I

shall go back to that time and ask the question of

whether, had the Court been seized of the matter on

that occasion, the right course would have been to

discharge the injunction there and then. It is

perfectly true to say that since then the parties have

been continually preoccupied by the application to

strike out which the arbitrator has heard in relation

to which an award has only just been made. Nonetheless,

I take the view on the correspondence that the matter

has to be dealt with retrospectively to the beginning

of 1994.

In those circumstances, having regard to the fact that

the delay in this case up to that time which no

satisfactory explanation has been given was as much as

19 months and, further, that the claimants caused that

delay to occur when the matter was already extremely

old, it is inappropriate that the injunction should

be permitted to continue."

The Judge also placed weight upon the alleged effect of the Mareva so far as the business of Siporex was concerned. He went on to say:

"In the present case the suggestion is made - and I

have no reason to disbelieve it - that this particular

Mareva injunction had the effect of stopping the

respondents from operating as a trading company simply

because it tied up a very large part of their capital.

It is perfectly true that, if the claimants were

successful in these proceedings, they would recover as

much as the amount which has been restrained by the

injunction. Nonetheless, it seems quite obvious that

the impact of the injunction on the respondents must

have been very considerable and must have had the effect of crippling them as a financial organisation".

It appears from an earlier passage in the judgment that the

"suggestion" to which the Judge referred in the first line of that quotation was an observation by leading counsel then appearing for Siporex that their ceasing business was a consequence of under-capitalisation as a result of the granting of the injunction.

THE GROUNDS OF APPEAL .

Comdel appeal on two broad grounds, namely that the Judge (a) wrongly construed the correspondence on the basis of which he "froze" the position as at January 1994 and (b) wrongly took account of what he was told about the financial position of Siporex.

As to the first ground, it is said that the Judge ought to have dealt with the application on the facts as they stood when the application was made on 24th November 1995, so that the 19-month period was no more than historic in a situation where Comdel were now making every possible effort to pursue their claims. It is said that the Judge was wrong to find on the evidence that there was an implied agreement between the parties' solicitors in January 1994 that time should be frozen at that point for the purpose of any application to discharge the Mareva injunction. Further, it is said that the Judge erred in failing to take into account the fact that in a letter dated 27th January 1994 the solicitors for Siporex had expressed themselves satisfied that Siporex were entitled to have the Mareva injunction discharged forthwith and yet made no application to that effect for 22 months until after they had obtained awards from the FOSFA umpire and Comdel had appealed therefrom. It is also argued that, in considering the delay by Comdel, the Judge failed to take sufficient account of the greater periods of delay for which Siporex had in fact been responsible.

In relation to the second ground of appeal it is submitted that the Judge was wrong to find, in the absence of any evidence, that the Mareva injunction had the effect of stopping Siporex from operating as a trading company simply because it tied up a large part of their capital. Rather than accepting that it had the effect of crippling Siporex as a financial organisation, it is said the judge should have found that the receipt of US $1,887,200 under the performance bonds was an uncovenanted benefit or windfall to Siporex of a very large amount (c.p. Staughton LJ in Comdel -v- Siporex [1989] 2 Lloyd's LR 13 at 15). Comdel submit that if the defendant's business had in fact been stopped from operating, there was no evidence that this was a consequence of the Mareva injunction.

DISCUSSION.

On the first question, it does seem to me that the Judge was in error in finding, as he did, that the parties had agreed in effect that the position should be "frozen" as at January 1994 so far as any application to discharge the Mareva injunction was concerned. By letters of 17th and 24th January, Clyde & Co had made clear that Comdel were about to proceed with the arbitration and had made proposals as to the best way by which to move to a speedy conclusion, suggesting yet further resort to this Court. In offering time to Middleton Potts, the solicitors for Siporex, to consider the question, Clyde & Co asked:

"Could you please confirm that the time of your

deliberations (which we would ask to be short)

should play no part in any application for

dismissal for want of prosecution if that be the

road you wish to tread."

Middleton Potts replied on 27th January 1994:

"As you rightly point out in your letter of 24th

January, now that it appears that your clients

wish to resurrect the arbitration, our clients will

need to consider the question of dismissal for want

of prosecution and the discharge of the mareva

injunction ...

We agree that the question of dismissal should depend

upon the delay to date and that time should not count

against your clients as from 23rd January when we put

you on notice of our clients' intention to consider

the possibility of dismissal ...

Irrespective of our clients' decision on dismissal, the

authorities are clear as to the question of discharge of a mareva injunction where the claimant does not proceed with diligence in the prosecution of the claim.

In the circumstances please let us know whether your

clients agree that the mareva injunction should forthwith be discharged by consent. If they do not,

then we reserve our clients' right to apply to discharge the mareva injunction".

It may be of significance that in his judgment Colman J misquoted the words in the letter "we agree" as "we agreed" speculating that there must have been an agreement between the solicitors in earlier telephone calls which were mentioned in the letter. Whether or not that is so, neither side suggests on appeal that more was expressly agreed, or that understanding went wider than, the position as it appears in the letter of 27th January.

It seems to me plain that letter dealt separately, first with the question of dismissal for want of prosecution, and then with the question of applying to discharge the Mareva injunction. In relation to the first, it was agreed that time would not continue to run against Comdel as a matter of complaint by Siporex, while Siporex were considering whether or not to proceed with an application. In relation to the second, Middleton Potts simply stated that, in the absence of agreement by Comdel that the injunction should forthwith be discharged by consent, Siporex reserved their right to apply to discharge it.

Thus, strictly speaking, the Judge was wrong to consider that there was an agreement to "purge" the application to discharge the injunction and on that ground to consider the position as at January 1994, when the position before the Court would have been that no step had been taken in the arbitration for 19 months. He should, as Mr. Gault has submitted, have considered the arguments for and against discharge of the injunction as at the date the application was before him. However, in my view it would and should have made no real difference to the views of the Judge on the effect of the 19 month period of delay for the following reasons.

It has been a main plank of Mr. Gault's argument that such delay became a mere part of the history because, by applying to strike out for want of prosecution, Siporex were indicating an intention to carry on with the arbitration while the Mareva remained in being, in reliance upon which Comdel themselves suffered prejudice in the form of continuing to incur expense in the arbitration whereas, if Siporex had promptly and successfully moved to discharge the injunction, Comdel would themselves have ceased to pursue the proceedings. In my view, that argument cannot sustain analysis.

As at January 1994, Siporex were making clear that they were intending to pursue one or both of two courses, namely dismissal for want of prosecution and/or an application to discharge the Mareva injunction. At the time of applying to dismiss, they made clear that they reserved their rights to move for discharge, in relation to which their hand would plainly be considerably strengthened were they to obtain an order for dismissal in the arbitration. That is exactly what they did. In those circumstances, whilst, strictly speaking, the Judge erred in considering the position as at January 1994, it could not properly be said that at the hearing before the Judge the earlier delay had sunk to the level of mere "history", or that Siporex had misled or encouraged Comdel, or induced in them any misplaced feeling of security, or that in some way Siporex had waived their right or intention to apply to discharge.

As to the second ground of appeal, it was conceded by Mr. Rokison that there was no affidavit evidence whatever before the Judge to the effect that the Mareva injunction had had the effect of stopping Siporex from operating as a trading company (as opposed to their having stopped trading long since for quite other reasons), let alone that the injunction had crippled Siporex as a financial organisation. It appears that the Judge's observations to that effect were based on the assertions of leading counsel for Siporex. I have no doubt that in a case of this kind, and in relation to an issue of substantial importance on the application before the Court, such an assertion should not be made or received as a substitute for evidence in the absence of agreement. Further, the sum at issue had, of course, never been part of Siporex's trading capital before the contract of sale went off; on the evidence available, it amounted to an unanticipated windfall rather than compensation for any loss suffered in the sale transaction. Accordingly, there was every reason to doubt, rather than to accept, that the sum could realistically have played any part in relation to Siporex ceasing to trade.

That said, however, it does not seem to me, upon reading the judgment as a whole, that the passage complained of was a key element in the decision which the Judge reached. It was no more than incidental to a far longer section of the judgment in which the Judge spelt out the necessity as a matter of principle for a party who enjoys the benefit of a Mareva injunction diligently to pursue the action in which it has been obtained. Just before the criticised passage, the Judge stated:

"..having regard to the fact that the delay in

this case up to that time [January 1994] for which

no satisfactory explanation has been given was as

much as 19 months and, further, that the claimants

caused that delay to occur when the matter was

already extremely old, it is inappropriate that the

injunction should be permitted to continue. Mareva

injunctions are a facility provided by the Courts in

order to protect claimants or plaintiffs in circumstances where there is a real risk that they

will be unable to enforce such judgment as they

might obtain in the proceedings in question. The

availability of Mareva injunctions is such that they

are likely to bear extremely heavily on defendants or

respondents subjected to them".

There then followed the remarks about Siporex's finances which I have criticised, after which the Judge continued:

"I also take fully into account the fact that if the

injunction is now discharged the overwhelming probability is that the claim will not be proceeded

with by the claimants. There may be many cases where

driving a claimant into a position where by discharge

of the Mareva injunction the claimant is unable to

pursue his claim, or perceives it to be unfruitful

to pursue his claim because there is no alternative

way of enforcing it, would be a consideration which

bore very heavily in favour of continuing an

injunction, even in the face of substantial delay.

However, I come to the conclusion that I should give

this consideration less weight in this case because

of the enormous delay which had already occurred

at the time when the period of culpable delay began.

It was particularly incumbent upon the claimants after

the injunction had been in place for such an enormously

long time in 1992 to get on with the proceedings at that stage ... it must have been quite obvious to anyone that the claim had become incredibly stale by

that time and ought to be pursued with the greatest

expedition. In the event it was not pursued at all

for 19 months. That does not present itself to me as

conduct consistent with the principles of the Mareva

jurisdiction. That being so I have no hesitation at

all in concluding that it is appropriate that the

injunction should be discharged".

It seems to me that the passages I have quoted set out the principle upon which the Judge proceeded and which underlay his decision; further they provide the context in which it can be seen that his remarks about Siporex having ceased to trade were in the nature of a makeweight rather than an essential plank in his decision.

Mr. Rokison submitted that, insofar as the passages relied upon by Mr. Gault were open to suggestions of error, such errors as were made were of an immaterial nature in the context of the Judge's overall decision and did not justify any interference with the exercise of his discretion by this Court. Mr. Gault, on the other hand, submitted that the errors were material and constituted an opportunity for this Court to exercise its own discretion and reverse the Judge's order. Mr. Gault argued that to set aside an injunction at this stage would unreasonably and belatedly dash from Comdel's grasp its prospects of success in the FOSFA appeal and, ultimately, of a successful arbitral award on the merits. As to that argument, it seems to me that, consideration of the procedural and substantive prospects in the case is apt to be a self-cancelling exercise, the apparent merits of Comdel's substantive claim being outweighed by the absence of reason to suppose that the FOSFA Board of Appeal will do other than confirm the decision of Mr. Rookes.

In my view the Judge was correct in the overall approach which he adopted, namely that, in the face of 19 months of entirely unexplained delay at such a late stage in the litigation, it was inappropriate that the injunction should be permitted to continue. Whilst there were two identifiable errors in his detailed reasoning sufficient to justify interference by this Court should it see fit, I consider that Colman J. was right to discharge the Mareva injunction and, in that respect, I am content to adopt the passage from his judgment last quoted as justifying such an order.

I would refuse this appeal.

LORD JUSTICE PETER GIBSON: I agree

LADY JUSTICE BUTLER-SLOSS: I also agree

Order: appeal dismissed; order of Mr Justice Colman, dated 24 November 1995, be affirmed; the Plaintiff do pay the Defendant's costs of this appeal and the costs of the court below, such costs to be taxed if not agreed; the Plaintiff's application for leave to present a Petition of Appeal to the House of Lords be refused; Plaintiff undertakes through its counsel to use its best endeavours to apply to the House of Lords for leave to appeal as soon as possible but in any event within 28 days of the date of the order; upon making such an application the Mareva Injunction do continue until determination of the Appeal, if leave is granted, and if such leave is refused the said injunction do stand discharged forthwith; the Plaintiff do further undertake to inform the Defendant's Solicitors of the progress of the Plaintiff's application; liberty to the Defendant to apply.