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The “Melissa K” and the “Tomsk”

27th Nov 2015

Surprisingly little law exists on the question whether a pre-action offer made by a prospective defendant is capable of acceptance by a prospective claimant after a relevant time limitation period has intervened.

On 27 November 2015 Mr Justice Males, sitting in the Admiralty Court, handed down a judgment which touches upon that question, albeit in the specific context of a pre-action offer to settle liability in prospective collision proceedings. Such offers are routinely made in collision actions, in which the allocation of responsibility for the collision is resolved at trial by the Admiralty Judge, whilst issues of quantum are referred to the Admiralty Registrar.

Males J. held in favour of the defendants (represented by 7KBW barrister, Richard Sarll) that liability had not been effectively settled through the claimants’ acceptance of the pre-action offer and that the defendants were entitled to rely upon a defence of imperfect service. That defence arose because the claim form, although issued within the 2 year period applicable to collision actions, had not been served within the period for service as abridged by the parties.

Nevertheless, since Males J. based his decision in large part on the terms of the covering letter to the pre-action offer (from which it was clear that that the prospective defendants intended the pre-action offer to be capable of acceptance only until the last day of the prescription period) it is clear from the judgment that care must be taken in the presentation of the offer in order for the result to be assured.

Having decided that issue, Males J. went on to consider whether the claimants were entitled to an extension of time for service but decided (again in favour of the defendants) that they were not. The judge clarified that whereas CPR 7.6(3) is the correct rule, it is relevant on applications for extension of the period for service of such claim forms to consider whether the discretionary or mandatory limbs in section 190(5) or (6), Merchant Shipping Act 1995 (extension of time for the bringing of admiralty proceedings) was satisfied.

The judge held that none of the relevant tests was met. As to the conditions for a mandatory extension (which requires the court to extend the period for bringing proceedings where there has been no reasonable opportunity to arrest the ship) the judge held that this section was of no application where the ship could not be arrested by reason of the existence of security, each party having promised to refrain from arresting the other’s ship.

This is therefore yet another case relating to extension of time for the commencement of admiralty proceedings. Other such cases in which Richard Sarll has been involved include Owners of the Ship “Theresa Libra” v the Owners of the Ship “MSC Pamela” [2013] 2 Lloyd’s Rep 596; The Owners of the Ship “Stolt Kestrel” v The Owners of the Ship “Niyazi S” [2014] 2 Lloyd’s Rep. 483; CDE SA v Sure Wind Marine Ltd (The “Odyssee” and The “SB Seaguard”) [2015] 2 Lloyd’s Rep. 268; and Stolt Kestrel BV v Sener Petrol Denizcilik Ticaret AS and CDE S.A. v Sure Wind Marine Limited [2015] EWCA Civ 1035.

To view the judgment please click here.

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