England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
ON APPEAL FROM THE QUEEN'S BENCH DIVISION (Commercial Court)
(MR JUSTICE MOORE-BICK)

		Royal Courts of Justice Strand London WC2A 2LL Thursday 9 May 2002

1. LORD JUSTICE ROBERT WALKER: I will ask Rix LJ to give the first judgment.
2. LORD JUSTICE RIX: This appeal arises out of a case management decision by a judge of the Commercial Court not to grant an application made at a very late stage to join a foreign party on a claim for contribution under section 1 of the Civil Liability (Contribution) Act 1978 ("the 1978 Act"). As against the intended foreign party the application was without notice, but it was made with notice to the existing parties to the litigation, one of whom took a neutral stance and the other of whom opposed the application on the ground that it would lead to an adjournment of the trial date currently fixed for July this year.
3. The judge, Moore-Bick J, was prepared to assume that if the foreign party was not joined, then the claimed contribution would be irremediably lost since it could only be made in England in the current proceedings. Nevertheless, he held, on balance in his discretion, that the application should be refused. He did not do so on grounds related to the question of jurisdiction over the intended foreign party, although he took account of the possibility that opposition to English jurisdiction might lead to some further delay to the trial if the joinder application was granted.
4. Rather the judge concluded that the balance of justice came down in favour of the existing litigant who opposed the joinder and did so on three main grounds. First, the applicant had left its application too late, and had failed adequately to explain that lateness to the court. Secondly, the applicant had failed to satisfy the court that the claim which it would lose by virtue of failure of its application was a valuable one. And, thirdly, the opposing litigant would itself be prejudiced, albeit in a non-specific way, by the prolongation of the burden of litigation.
5. Leave to appeal has been given by Clarke LJ on the basis that there is a real prospect of showing that the judge's decision was disproportionate and wrong in principle, given his assumption that a claim in the pending action is the only basis on which the applicant can seek a remedy against the intended foreign party who, the applicant asserts, would be the party ultimately responsible for the relevant liability.
6. I must put factual flesh upon this schematic skeleton. The applicant, in this court the appellant, is Stargas Limited ("Stargas"). In 1993 it sold a cargo of Saudi Arabian propane on CFR terms to Borealis AB ("Borealis"), then called Statoil Petrokjemi AB. The sale was of "field grade" quality and provided that the findings of the load port inspector would be "final and binding" on both parties. The contract included carriage of the propane under a charterparty under which Stargas acted as disponent carrier. The contract provided for English law and the jurisdiction of the High Court in London. Stargas' charterparty was with the owners of the Berge Sisar, Bergesen A/S.
7. In due course the propane was tested at load port and was found within specification. By the end of the voyage, however, the cargo was discharged and found to be off specification in that it failed the copper corrosion strip test required under a "A-140" specification. The vessel's tanks were also alleged by Bergesen to have been damaged by the propane. As a result Borealis, the buyer, blamed Stargas, the seller, for shipping off specification goods. Stargas blamed the shipowner, Bergesen, for damaging what it said was sound cargo when shipped, and Bergesen blamed Stargas for loading dangerous, because corrosive, goods under its charterparty.
8. In the proceedings in the Commercial Court in London, Borealis claimed against Stargas, Stargas claimed against Bergesen and Bergesen counterclaimed against Stargas. Borealis' claim is for some $1.3 million and Bergesen's claim is for a little over $0.3 million. Stargas had purchased the propane cargo in three lots under three separate contracts; one with the Saudi Arabian Oil Company, ("Saudi Aramco"), the producer of Saudi Arabian propane, one with Trammogas and one with Texaco. All three contracts were FOB Yanbu and incorporated Saudi Aramco's standard terms. The contract with Saudi Aramco specifically incorporated the A-140 specification. This can be contrasted with the Stargas/Borealis sale where the quality is field grade and there is an issue in the proceedings whether such a quality incorporates the A-140 specification.
9. The supply contracts with Saudi Aramco and Trammogas provide for Saudi Arabian law and jurisdiction, but the supply contract with Texaco provides for arbitration in England under English law. Trammogas and Texaco were themselves purchasers of the propane under contracts which, by one or more stages which the evidence does not disclose, would have led back to Saudi Aramco.
10. Stargas has protected its position as against Texaco by commencing arbitration in England, albeit we are informed that its rights against Texaco have been assigned to Borealis, but Stargas has not commenced proceedings against Saudi Aramco or Trammogas in Saudi Arabia. Stargas' arbitration against Texaco is stayed pending the outcome of the court proceedings.
11. Bergesen has also commenced arbitration proceedings against Saudi Aramco in London under its bill of lading contract. That bill of lading incorporated the terms of the Stargas charterparty, including its English law and arbitration clause. Saudi Aramco was the shipper of the propane. The arbitration by Bergesen against Saudi Aramco is also stayed pending the outcome of these proceedings.
12. It may be noted that Stargas' financial interest in the proceedings covers both the $1.3 million claimed from it by Borealis and the $0.3 million claimed from it by Bergesen, but its application to join Saudi Aramco, for the purposes of contribution, only relates to the $0.3 million claim from Bergesen. If the cause of the trouble was the original off specification condition of the propane, then Stargas' primary remedy is under its three sale contracts which, in the absence of some term of exclusion, would prima facie indemnify Stargas against both claims which it faces. However, the full Saudi Aramco standard terms are not before the court, therefore the court does not know the details of the contractual position under Stargas' supply contracts including its contract with Saudi Aramco itself.
13. There has been a small cluster of claims appearing in the English courts arising out of shipments of propane from Yanbu in the autumn of 1993. This may be said to give force to Bergesen's allegation that what went wrong was not something on the voyage to do with the process of carriage, but something to do with the inherent quality of the cargo shipped itself. The other cases which have surfaced are the "Havmann" [1997] 2 Lloyd's Reports 759 concerning a shipment in October 1993, and The "Baltic Flame" [2001] 2 Lloyd's Reports 202, which concerned shipments in both April and November 1993. The court has been told that the "Havmann" dispute has been settled, but that The "Baltic Flame" dispute is still pending although at present of uncertain direction.
14. Common to these actions is the allegation that the cargoes were loaded apparently sound but discharged off specification without any obvious explanation. Saudi Aramco is the sole producer of propane in Saudi Arabia and ships it from Yanbu. It was not a party to the "Havmann", but it is now a party to The "Baltic Flame" where it has been joined by a CIF seller, Fortum Oil & Gas ("Fortum"), to respond to a claim for contribution in respect of another shipowner's claim for damage to his cargo tanks under his charterparty with Fortum. That is the relief that Stargas is seeking to obtain by joining Saudi Aramco in these proceedings.
15. In both this case and The "Baltic Flame" Saudi Aramco is the shipper under a bill of lading contract with a shipowner. A CIF or CFR seller in chain has entered into a charterparty with the shipowner, and the shipowner claims against his charterer that his cargo tanks have been damaged by the cargo. The charterer says, "In that case, if the shipowner is correct, then the shipper is liable to the shipowner under the bill of lading for the same damage and I, a mere seller in chain, am entitled to a contribution"; indeed, it is submitted, a complete indemnity from the original producer and shipper of the cargo. I shall revert to The "Baltic Flame" in due course because it is submitted by Bergesen that in other respects The "Baltic Flame" is not on all fours with the present case.
16. In these circumstances, if Stargas had sought to join Saudi Aramco at the outset of these proceedings, then, subject to the important question of service out of the jurisdiction (an issue which would be raised by Saudi Aramco rather than existing parties to the proceedings, and was albeit unsuccessfully raised by Saudi Aramco in The "Baltic Flame"), there would presumably have been no difficulty in accommodating Saudi Aramco's joinder in this action.
17. The difficulty in the present case has arisen because Stargas' application to join Saudi Aramco comes only a few months before trial. The application was made on 15 March 2002 at a time when the trial had been fixed for 5 to 7 days in July 2002. It is necessary, therefore, to set out a relevant chronology of the proceedings to date in order to put those stark facts in context.
18. The cargo was shipped in October 1993. It was found to be off specification on discharge. On 10 May 1994, Borealis issued its writ and points of claim against Stargas. On 4 July 1994 Stargas served its points of defence and a third party notice against Bergesen complaining against the latter of negligent carriage. On 7 October 1994, Bergesen served its points of defence and counterclaim in the third party proceedings (now Part 20 proceedings). It there alleged that the propane was a dangerous cargo in that its failure of the copper corrosive strip test showed that it had a propensity to corrode and that, as a result, it had damaged the vessel's tanks. At that point, as the judge remarked, Stargas could and, it is said by Bergesen, should have asked itself whether to join Saudi Aramco qua shipper to a claim for contribution. It did not.
19. On 6 July 1995 Bergesen served a third party notice against Borealis as holder of the bill of lading on the basis that it had as such inherited the responsibility of Saudi Aramco not to ship a dangerous cargo. The claim put against Stargas under the charterparty was now extended to Borealis under the bill of lading. It was at this point, as the judge again remarked, that Stargas had another opportunity to ask itself whether it should seek to join Saudi Aramco for the purposes of contribution.
20. If it did ask itself that question it chose to do nothing. However Borealis was asking itself the same question. If it might be liable to Bergesen, it reasoned, then Saudi Aramco, as shipper, ought to indemnify it. Therefore, on 30 October 1995, Borealis sought and obtained leave to join Saudi Aramco as second defendant to its claim for the purposes of a contribution claim under the 1978 Act. It is possible, but one cannot be sure, that to some extent the very purpose of Bergesen's third party proceedings against Borealis, in circumstances where it already had a secured claim against Stargas, was to set up a situation where, at Borealis' initiative, Saudi Aramco could be brought into the action. This could perhaps have been more simply done by Stargas making its claim for contribution. As I have pointed out, it did not.
21. Saudi Aramco, however, was unwilling to be brought into the English proceedings and sought to set aside leave to serve out on the ground that the proper forum was Saudi Arabia and not England. At first instance Saudi Aramco lost. At [1997] 1 Lloyd's Reports 635 at 640, Waller J said:

"In relation to the jurisdiction of the Saudi Courts, and the distinct possibility that proceedings may take place in those Courts in any event; first, there is no agreement between Borealis and Saudi Aramco that the Saudi Courts should have jurisdiction over any dispute between them, and it would be the very fact that there would be a risk of inconsistent findings which would make it just and convenient for Saudi Aramco to be joined and thus bound by those findings which may render Borealis liable."

22. That was in July 1996. However, Saudi Aramco appealed and raised the issue that Bergesen had no claim against Borealis, therefore Borealis could have no claim for contribution against it. The Court of Appeal agreed, but the matter went to the House of Lords which upheld the Court of Appeal, albeit on more extensive reasoning which tended to the same effect. Thus, Bergesen's claim against Borealis was struck out and with it went any need for Bergesen's contribution claim against Saudi Aramco. The Court of Appeal decision was given in July 1998 (see [1999] QB 833) and the House of Lords' decision was given in March 2001 (see [2001] 2 WLR 1118). Thus, from July 1995 to March 2001 nearly six years were lost in Bergesen's attempt to bring a bill of lading claim against Borealis and in Borealis' attempt to join Saudi Aramco for contribution purposes.
23. Almost contemporaneously with the House of Lords' decision in this case, the Court of Appeal in The "Baltic Flame" upheld Fortum's joinder of Saudi Aramco, again for contribution purposes. That decision, affirming Longmore J at first instance, was given on 29 March 2001 (see The "Baltic Flame" [2001] 2 Lloyd's Reports 202). Saudi Aramco had run a powerful argument that the essential focus of the dispute relating to the inherent quality of the propane was in Saudi Arabia, that it had agreed to arbitrate its dispute with the shipowner, Mellitus, under the bill of lading and that therefore it should not be made to answer a merely contingent claim for contribution from Fortum. Nevertheless, Saudi Aramco lost the argument essentially on the basis that, since Saudi Arabian law recognises no right to contribution similar to that found in the 1978 Act, the only place where Fortum could achieve any remedy at all against Saudi Aramco was in the English proceedings.
24. Potter LJ put the matter in this way at page 214:

"38. In my opinion, in relation to a question of contribution, the court should similarly be guided by the interests of the parties and considerations of practical justice. This is a case where plainly Fortum are acting reasonably in seeking to issue contribution proceedings against Saudi Aramco in proceedings in which Fortum have themselves been sued and require to protect their position. So far as practical justice is concerned, while Saudi Aramco would be under no liability if sued in Saudi Arabia, it will only be held liable to contribute in this country if it is in truth directly liable to Mellitus pursuant to a claim for damage already asserted and required to be determined in England under English law (albeit in arbitration proceedings). In such circumstances, as it seems to me, the demands of practical justice plainly favour joinder of Aramco.

....

40. Mr Gaisman has criticised the judge's observation that, by engaging in international trade and making an international contract of carriage, Saudi Aramco have exposed themselves by such activity to potential claims in English court proceedings. He has submitted that the fact that Saudi Aramco had agreed that its contractual relations with Mellitus should be governed by English law, but that the contractual disputes between them should be resolved privately by London arbitration demonstrated an intention to minimise any exposure to court proceedings. That may be, but to allow such an argument to prevail is, in my view, to take too narrow a view of the matter. It seems to me that, in the context of considering the practical justice of requiring a foreign resident to answer to a claim in court proceedings in respect of which he would not be liable in the courts of his own country, the point that the judge was making was highly relevant. By freely entering, in the course of its international business, into contracts of carriage which incorporate English law, Saudi Aramco plainly contemplated that English law shall govern Saudi Aramco's liabilities arising therefrom. Although, it may well be the case that many bills of lading incorporate the terms of a charter which provides for London arbitration (as in the Asbatankvoy form) it is plainly a possibility that the relevant charterparty will be in a form which, like the Shellvoy charter, contains an English High Court jurisdiction clause with an option for London arbitration instead. Looked at broadly, therefore, Saudi Aramco cannot realistically expect to carry on its world-wide business free of the prospects of joinder in English proceedings."

25. It is relevant to note that in that case Fortum had no supply contract with Saudi Aramco; indeed there is no discussion in The "Baltic Flame" judgment of Fortum's contractual supply position. There is a reference at paragraph 34 that:

"The mere fact that the claim of Fortum against Saudi Aramco is subject to stay for the purposes of arbitration is no bar to Fortum's contribution claim, which is itself subject to no requirement of arbitration."

26. I think however that the reference to "Fortum" there must, on consideration of the judgment of Potter LJ as a whole, be a mistaken reference to Mellitus.
27. It may be said that it was at this point, in late March 2001, with those judgments from the House of Lords in these proceedings and from the Court of Appeal in The "Baltic Flame", to hand that Stargas had a third and critical opportunity to ask itself whether it should take the step, which Borealis had already sought to take in the current proceedings and which Fortum had successfully taken in The "Baltic Flame", to join Saudi Aramco for the purposes of contribution. If it did consider the matter, however, that step was not taken.
28. Six months later, on 19 September 2001, there was an important case management conference held in these proceedings before Toulson J. He made a detailed order, running to 7 pages and 20 paragraphs, covering every aspect of the conduct of the proceedings down to trial. His order dealt with amendments, specific disclosure, witness statements, experts and trial. He ordered that a date for trial be fixed not before 4 March 2002. We have been told that the trial date in July of this year was fixed very shortly after that case management conference. It was only six months after that conference, and after the date for trial had therefore been fixed for some time, that Stargas applied to join Saudi Aramco.
29. In these circumstances Moore-Bick J wanted to know why Stargas had failed to apply to join Saudi Aramco in the past and now wanted to do so four months before trial. He had no explanation in evidence, but was told on instructions that originally Stargas had viewed the claim as one entirely related to the carriage of the cargo, not to any problem in the cargo itself. It was only following further disclosure, and the emergence in its hands of detailed draft expert reports, following the case management conference of September 2001, that it perceived the need or desirability to make the application. The judge asked whether he could infer that a different view was now taken of the merits of Bergesen's counterclaim than had originally been taken and he was told that he could. Those instructions relayed to the judge orally are now before this court in the form of a second witness statement from Mr Andrew Clarke of Stargas' solicitors. Leave to adduce that further statement has not been objected to and has therefore been granted.
30. There had already been evidence before the judge that during the six or so years, while Bergesen's claim against Borealis and Borealis' claim against Saudi Aramco were wending their way to the House of Lords, Stargas saw no need to take any action or incur expense, uncertain as to the outcome of those disputes or whether the action would ever come back to life.
31. Before the judge, Borealis took what it formally described as a neutral view while expressing concern at losing the trial date and putting into a skeleton four points, all of which tended to the effect that Stargas had had its opportunities to make this application before, and that if it had not done so and therefore now suffered any risk of prejudice, that was something of its own making.
32. Bergesen strongly opposed the application. The judge found that if Saudi Aramco were joined, the trial date would be lost and the trial would go back by at least one year, possibly more but in any event not more than two years, which was substantially less than the much longer period for which Bergesen contended. The judge said nothing about Stargas' potential remedies under its three purchase contracts and, in particular, its contract with Saudi Aramco. He was prepared to assume that, as in The "Baltic Flame", Stargas' application represented the last opportunity for it to pursue any remedy against Saudi Aramco. Nevertheless he was dissatisfied by the lack of explanation given to him for the lateness of Stargas' application, and also by the absence of anything which enabled him to assess the nature or strength of Stargas' claim against Saudi Aramco. Thus he said:

"I say that not because it seems to me that the court can, in any sense, make any decision, even provisional decision, as to the merits of the claim at this stage, but because when an application of this kind is made so very late in the day, the court must be satisfied that it has at least some reasonable prospect of success in order to justify the disruption to the trial timetable that it would inevitably cause."

33. He held that Bergesen would be unlikely to be prejudiced in the conduct of the trial by a year's delay, but that it would suffer prejudice in a general way. He put that point in this way:

"It is right to say that in his witness statement the solicitor for Bergesen, Mr Ridley, touches on the risk that witnesses who are currently expected to be called to give evidence at the trial may be unavailable if the hearing is adjourned. However, the information which he gives does not, in my judgment, give grounds for thinking that it is very likely that their evidence would be lost.

Nonetheless, I also have to bear in mind the undoubted prejudice which a party suffers as a result of the prolongation of the litigation. This is something which is often overlooked. The continuation of litigation imposes a considerable burden on any party involved in it, since preparations cannot simply be put down and picked up again at a later stage; and that is still true even though the litigation may, in practice, be largely run by insurers or other parties supporting the litigation."

34. He concluded with his decision in these terms:

"I have to try and balance all these competing factors but, at the end of the day, having regard to the history of this matter and on the absence of any evidence explaining why this application was not made at an earlier date and why the claim is now said to be of such value as to justify the disruption of the current trial timetable to which it would lead, I have reached the conclusion that it would not be right to allow this application and that the trial should proceed without the addition of another party."

35. On this appeal Mr Richard Siberry QC, on behalf of Stargas, has submitted that the judge had erred in principle or has exceeded the generous allowance which should be granted to any decision in his discretion, because he had been wrong to criticise Stargas for its lack of explanation. He submits that the judge was also wrong to say that the merits of the claim against Saudi Aramco could not be assessed and that he had also overstated the merely general prejudice which he found would be suffered by Bergesen in a situation where it had been Bergesen's attempt to bring in Borealis which had been responsible for nearly six years of the delay to date. He submitted, therefore, that the prejudice which the judge was prepared to assume Stargas would suffer by loss of its remedy in contribution would be wholly disproportionate to any fault on its part or to any prejudice suffered by Bergesen.
36. As for the criticism of Stargas' explanation for its delay, he pointed out that the judge accepted that its initial decision to regard Bergesen's counterclaim as being unwarranted on the basis that the case obviously arose out of faulty carriage and for that reason to regard a claim against Saudi Aramco as not being worth pursuing "may have been a perfectly reasonable decision for Stargas to have taken at the time."
37. Mr Siberry then went on to submit that Stargas could not be blamed for keeping its powder dry and expense limited during the six years when it may be that Saudi Aramco would in any event be brought into the case as a result of Borealis' claim for contribution against it. If that joinder had succeeded, then it would have been a small and easy matter for Stargas to have made an additional claim for contribution from its point of view against Saudi Aramco. He also submitted that the judge was wrong to have required any further explanation as to the nature or strength of its claim for contribution once it had decided, in the light of further documentation and experts' reports, and also, as we have been told in the light of a new case handler and new counsel, on its change of tack.
38. A party who has to face both ways, as Stargas did, should not, Mr Siberry submitted, be obliged to open to the court privileged considerations. In any event the judge ought to have appreciated, but did not, that once it may be assumed that Bergesen's claim against Stargas was potentially a valid one, then the claim for contribution became, prima facie, a powerful one, even to the extent of a complete indemnity.
39. In answer to a question from this court dealing with the particular period of delay between March 2001 and March 2002, Mr Siberry submitted that the judge had not held that particular period specifically against Stargas, but that if he had asked about it, he would have been told, as Mr Siberry informed this court, that it naturally took time, following the decision in the House of Lords, for "the dust to settle", and that it was only as events unfolded, following a case management conference which it was Borealis' obligation to bring forward, that perceptions had changed on the part of Stargas' legal representatives.
40. He also addressed in advance what he described as two new arguments which had been canvassed in Bergesen's skeleton argument. First, that Stargas had contractual remedies against Saudi Aramco under its sale contract with it, as well as under its contracts with the other two suppliers. Therefore it would not suffer the prejudice of losing its only remedy against Bergesen's claim if prevented from joining Saudi Aramco in these proceedings for the purposes of contribution. Secondly, that from the point of view of jurisdictional questions, the case here differed from the position in The "Baltic Flame", both because Fortum had no contractual claim against Saudi Aramco itself and also because Stargas' contractual claim against Saudi Aramco was governed by Saudi Arabian law and jurisdiction.
41. In response to these points, Mr Siberry submitted that, because they had not been developed below, Stargas had lost the opportunity to lead evidence in answer to them. If necessary, however, he would submit that the terms of Stargas' contract with Saudi Aramco were unknown and that it was possible that even goods within specification could be dangerous. If Stargas' evidence in these respects was less than perfect, the court should understand that Stargas had effectively ceased to exist, save for the purposes of this litigation, in 1997 or 1998. The fact remained that the only way in which Stargas could vindicate its 1978 Act rights was by joining Saudi Aramco. In the absence of Saudi Aramco these proceedings were like Hamlet without the prince.
42. As for the distinction made between this case and The "Baltic Flame", Mr Siberry submitted that this was a distinction without a difference. He also developed his submission that the claim for contribution was unanswerable, and that the judge was wrong to doubt its value. He submitted that the judge was not thinking so much of the ultimate question of what would be just or equitable under section 2 of the 1978 Act, as doubting what it could be that would turn a claim, that was initially thought of as not worth pursuing at a time when the damage was viewed as entirely a matter of faulty carriage, into a valuable claim which would justify the disruption to the trial process.
43. In conclusion Mr Siberry submitted that the judge's response was disproportionate because there was nothing sufficient to set against the prejudice to Stargas which the judge was prepared to assume.
44. On behalf of Bergesen, Mr Duncan Matthews QC has submitted that the judge was right both to complain about a lack of sufficient explanation for the delay, and also to complain about a lack of evidence as to the validity and worth of the claim for contribution. He submitted that, after Bergesen had spent so much time and money in an attempt to set up a situation where Saudi Aramco could be bought into the action while Stargas simply sat on its hands, it would be unjust if Stargas could now disrupt the process to trial by changing its mind about the question of joining Saudi Aramco at the last moment. He sought to emphasise that, both on the question of an explanation for delay and on the matter of alternative remedies, the burden of evidence and what may be called persuasion, lay on Stargas. Therefore, Stargas could not complain that it lacked the evidence to put before the court on either matter. In any event, the question of alternative remedies under, for instance, the supply contract with Saudi Aramco, had been raised both in a paragraph of Mr Ridley's evidence, which preceded the hearing below and therefore gave notice to Stargas of the point, and in submissions before the judge as to which he was able to point to a passage in the transcript of the hearing below. He also submitted that the delay was likely to be considerably longer than a year, if only because Saudi Aramco had plainly shown its intention to resist the jurisdiction of these courts in such cases, if it validly could, and also because the distinction between this case and The "Baltic Flame" raised an opportunity for a further substantial argument on jurisdiction.
45. In these circumstances, I would look at the matter in the following way. First, a case management decision such as this, relating to the joinder of parties and the preservation of a fixed date for trial, is of course a matter for the judge's discretion, but it is a matter peculiarly of his discretion. Secondly, the Court of Appeal should, as is accepted on both sides, as a matter of classical doctrine (and every decade has a different passage to cite on this doctrine) be very slow to interfere with a decision of discretion. It can only do so where the judge has gone wrong in principle, or has omitted to consider a relevant matter, or has taken account of an irrelevant matter, or has acted wholly outside the general generous ambit given for his decision making, ie has gone plainly wrong. Thirdly, this case, as dealt with by the judge, did raise a stark conflict between on the one hand an applicant whose only remedy is in these proceedings, and on the other hand another party, Bergesen, who would suffer no prejudice save the general unpleasantness of continuing litigation in circumstances where, as Mr Siberry had always acknowledged, all the costs of any adjournment would have to be borne by his clients. Moreover, I would accept that Bergesen, as a shipowner, must be perfectly familiar with litigation and, has, whether for good reasons, or as they ultimately turned out, for bad, been responsible for five or six years of delay in the past.
46. In such circumstances, it would in my judgment be right to look carefully at the judge's two other main reasons for finding the balance of justice to lie where he found it to lie. It will be recalled that those reasons were: insufficient explanation for the delay; and his not being satisfied that the claim for contribution was sound or arguable. As for the second of those reasons, I would accept Mr Siberry's submission that, prima facie, the claim for contribution is a good arguable claim. It had to be a good arguable claim in The "Baltic Flame", otherwise permission to serve out could not have been granted. Subject to the point about Borealis' absence of liability under the bill of lading, it had also been decided in these proceedings that there would be a good arguable case for serving out against Saudi Aramco on Borealis' claim for contribution. Moreover, it was Bergesen's own case that the cargo was dangerous. If that was a good point against Stargas as charterer, it was a good point against Saudi Aramco as shipper. Therefore, I would not, in the way which I think the judge below treated this matter, have held the point as to the validity of the claim for contribution against Stargas as something insufficiently made good to the court, however much Stargas' evidence on such a matter was materially wanting in the application below.
47. Having said that, in another respect not developed before the judge, I observe that a point has emerged out of submissions in this court which would indicate that there could well be a possibly substantial argument about the ultimate value of the claim for contribution in that Saudi Aramco might be likely to submit that, if it were indeed true that Stargas' only remedy against it was under the 1978 Act and that Stargas lacked any remedy under its contract of supply, then a court should find that the just and equitable answer to the question of contribution should be decided in Saudi Aramco's favour rather than in favour of Stargas. That point might be said to go to the question of jurisdiction as well. I do not evaluate the argument, but note its existence.
48. As for the first of those two main reasons which formed the basis of the judge's decision below, however, Stargas is in much greater difficulty. I accept that there has obviously been a change of mind. That is not what concerns me so much. I understand that a defendant who has to face both ways is in a tricky situation. I can understand that both in 1994/1995, and later, during the period when the interlocutory proceedings were going to the House of Lords, it may have seemed a poor choice on the part of Stargas to seek to bring Saudi Aramco into the proceedings, and to go to the expense of fighting a possibly protracted battle about jurisdiction, all for the sake of a counterclaim of $300,000. Better, perhaps, especially if the prima facie view of the matter was that the problem lay with carriage rather than with cargo, to look in one direction only and give full support to its own defence against Borealis' claim. Similarly, during that long period of six years, I can understand the decision by Stargas to leave it to Borealis to bring Saudi Aramco into the case.
49. It is the situation in March 2001 upon which I would focus, even to an extent which goes well beyond what concerned the judge below. By March 2001 the importance or otherwise of bringing Saudi Aramco into the proceedings must have been, and should have been, fully before Stargas. That had been the essential bone of contention in the proceedings which led to the House of Lords. Moreover, in the same month the decision of the Court of Appeal had shown that, subject to the separate point arising out of the distinction between Fortum without its contract with Saudi Aramco, and Stargas with its contract of supply with Saudi Aramco, the possibility of bringing Saudi Aramco within the jurisdiction was given considerable support.
50. Although an immediate decision perhaps could not have been expected at that time, it should not in my judgment have taken long for Stargas and its legal advisers to consider their position carefully. In effect, despite Mr Siberry's submissions today, the court has had no adequate explanation as to the delay of a year which then occurred. If Mr Siberry's explanation is to be taken at its face value, it simply amounts to a very serious error whereby, at the latest in September 2001 when the case management conference was before the commercial judge and all aspects of this action were under consideration, Stargas continued to leave on one side the question of whether a party, now described as the Hamlet of the proceedings, should have come onto the stage.
51. Against the background of an increasingly imminent trial date, the importance in such circumstances of a proper and frank explanation of the reason for delay should not be under-estimated. The danger is that tactical decisions have been taken and retaken which, if considered in the cold light of day, would not justify disruption to the trial. However one wants to look at it, whether as a matter of fairness, proportionality or overall justice, the court is not able to found a safe decision on such questions without, as it seems to me, a proper and frank explanation. The later a decision is made, which could, and it might be said should, have been made earlier, the more the court is entitled to be concerned lest tactical considerations have entered into the matter.
52. I would accept that there is a delicate line to be trod here between privilege and candour. But, if a party asks for a special dispensation to be shown to it, and there can be few dispensations more special than a litigant asking to join a new party to long existing proceedings on what is, relatively speaking, if not the eve of trial at any rate a short period before it, then such a party must carefully consider how candid it can be with the court. It is fully entitled to rest on its privilege. But then the court is not assisted with any explanation. The delay from March 2001 to March 2002 is a critical period and there has simply been no adequate explanation of that delay.
53. If the matter stood there alone, it might perhaps have been a difficult decision to know how best to treat this appeal. This court would be entitled to exercise its own discretion in the light of the failure on examination of one of the judge's important grounds of decision, that relating to the validity of the claim for contribution. On the other hand, the absence of an adequate explanation covering the period from March 2001 to March 2002 is a most important factor, could well be described as critical, and could justify the judge's decision by itself.
54. I would be inclined to uphold the judge's decision on the single ground of the absence of a sufficient explanation, giving that factor the somewhat different emphasis highlighted in this judgment. However, the matter does not stop there for in my judgment this court is entitled to exercise its discretion anew. There is the additional factor that, prima facie, Stargas has remedies against its suppliers including a remedy against Saudi Aramco itself under its supply contract with it. Therefore this is not a case like The "Baltic Flame" where it can be said that the applicant's only remedy was under the 1978 Act. This point was not considered by the judge because he was prepared to assume in Stargas' favour the prejudice of losing its only remedy. Nevertheless this seems to me another important factor to put in the scales.
55. I would also take account of the fact that, in my judgment, there would be a serious argument raised by Saudi Aramco on the jurisdictional question of service out. Saudi Aramco would argue that the position in this case is materially different from The "Baltic Flame" because of its contract with Stargas providing for Saudi Arabian law and jurisdiction. That point has value in itself as tending to undermine the case for joinder on jurisdictional grounds, but it also goes separately to the question of how long a period to evaluate for the delay to the trial. In my judgment the jurisdictional argument could well materially extend the judge's period of at least 12 months, possibly for a considerable further period of up to or even beyond another year.
56. Finally, on the question of proportionality, I would bear in mind the question of costs. One necessarily has to treat this subject in a somewhat broad brush manner, for we have no detailed costs figures before us. If, however, Saudi Aramco was brought into these proceedings, it would inevitably follow that its documentary disclosure, which has been completely absent so far, and which must be extensive, would come into the case and there would be the possibility of important amendments, certainly the likelihood of additional witness statements and serious and material changes to the draft expert reports which I understand are due to be exchanged very shortly. They should perhaps have been exchanged already.
57. In these circumstances I consider that the costs thrown away in adjourning the July trial, and the additional costs caused by the new claim of the 4-handed trial which would then follow in due course, would be very large across all the parties as compared with the sum at stake of about $300,000, even taking into account the interest which must be added to that since 1993. Moreover, it may be that Bergesen, even if successful, could not claim interest for the full period. I doubt that all these costs are proportionate to the claim involved.
58. In the end, however, proportionality is only one aspect of the overall question of fairness and justice to all the parties. In my judgment, if indeed it be the case that Stargas has lost an important and valuable remedy which cannot be made good in other proceedings elsewhere, whether against Saudi Aramco or against the other two suppliers, then in essence Stargas has only itself to blame. For the period of most critical delay, Stargas has no valid explanation at all. It has not been candid with the court. In any event has Stargas has not met the burden of showing that its only remedy is by joinder of Saudi Aramco.
59. On the balance of all the matters which I have sought to set out, it would not be proportionate, fair or just to put off the imminent trial for an uncertain period of one or two years or more. In my judgment this appeal should be dismissed.
60. LADY JUSTICE ARDEN: I agree with Rix LJ that the court should be slow to interfere with the exercise by a judge of his discretion, particularly the exercise of discretion in a case management matter such as the application made by Stargas to join Saudi Aramco. However, I am satisfied that the judge fell into error in holding that there was nothing before the court which enabled him to assess the strength of the proposed claim against Saudi Aramco under section 1 of the Civil Liability (Contribution) Act 1978. There was some material which could be gleaned from the pleadings and statements of case. I gratefully adopt Rix LJ's summary of the available information.
61. It is thus open to this court to re-exercise the discretion which fell to be exercised by the judge. However, I agree with Rix LJ that the result of that exercise should not be any different for the following reasons.
62. First, the information placed before the court is still incomplete in a material respect in that it does not give any details of contractual claims. It has been explained to us that Stargas no longer has the relevant documentation. However, we are not told what efforts have been taken to obtain that documentation from other sources. I agree with Rix LJ that that information on these matters is vitally important to the assessment of the possible prejudice to Stargas if the application is not granted.
63. Second, a most material point in this case in the exercise of discretion appears to me to be the length of any delay which would result if the present trial date were vacated. The judge assessed that period of time as no less than one year, and possibly two and a quarter years. For the reasons given by Rix LJ, I consider that would be a minimum period of delay on the basis that, for the reasons my Lord has given, there is a real possibility that Saudi Aramco would oppose the taking of jurisdiction by this court.
64. Third, Stargas stood by while Bergesen was pursuing Borealis. That was a period of some five and a half years. There was then a period after the judgment in the House of Lords in which there was a delay of one year before the application was made. In the course of that period, as Rix LJ explained, a case management conference occurred at which the trial date was fixed.
65. I appreciate that new counsel was brought into the case and the new legal team had to get a grip on the issues in the action, which undoubtedly are complex. But, even allowing time for that, if the application to join Saudi Aramco had been made before the long vacation last year, it seems to me there would have been a much better chance of the court acceding to it on the basis that the delay and in the date would have been 12 months less.
66. Fourth, I agree with Rix LJ that there was has not been a sufficient candid explanation of why the Saudi Aramco was not joined hitherto.
67. I have weighed on the other side of the balance the other factors, in favour of joinder. The first material one is, as I see it, as being loss of a potentially valuable right to claim contribution. However, as against that factor, there may be valuable contractual claims on which we have no sufficient detail. I also take into account that there is a convenience of having one factual inquiry into the problems with this cargo of liquid propane. I also take into account that the appellants are willing to pay the costs thrown away by the adjournment and accept that Bergesen is kept out of its money for longer than it ought to have been as a result of the delay, it would be entitled to interest. As against that, however, I accept Mr Matthews' submissions that there are bound to be further costs involved if Saudi Aramco were joined in this action. Therefore, the joinder of Saudi Aramco, even if it successfully opposed jurisdiction, is likely to impose substantial additional costs on Bergesen against its wishes. As far as I can see, given its claim against Stargas is only $300,000, those costs would be disproportionate to the matters in issue so far as it is concerned.
68. In my judgment, the judge was right in the conclusions that he reached. This appeal should be dismissed.
69. LORD JUSTICE ROBERT WALKER: I agree that the appeal should be dismissed for the reasons given by my Lord Rix LJ.
Order: Appeal dismissed with costs to be subject to detailed assessment.