EUPillar S.E.T. Select Energy GmbH v F&M Bunkering Limited [2014] EWHC 192 (Comm)

Summary

The claimant, S.E.T., was a German company. The defendant, F & M, was a Cyprus company. The substantive contract between the parties was concerned with the supply of bunkers for the vessels on river Danube. The contract included an English jurisdiction clause. Although F&M had provided S.E.T. with a bank guarantee, a Cyprus court granted an interim injunction restraining payment under the guarantee on the ground that the demand was based on fabricated transport documents. The proceedings in Cyprus commenced in December 2012. S.E.T. was not a party to the proceedings in Cyprus. In England, S.E.T.’s claim was for the payment for the supplied goods. The value of the claim was $1.2 million. The English proceedings were initiated on 21st February 2013; they were served on 12th March. F&M, on 18th April 2013, when acknowledging the service, indicated that they intended to challenge the jurisdiction of the English court. On 3rd May 2013, F&M made an application for a stay of the English proceedings with a view to awaiting the outcome of the Cyprus proceedings. The application was received late (more than 14 days after the service acknowledgment). S.E.T. made an application for judgment in default of defence. Both applications were dismissed by the English court. Mr Justice Blair noted: “32 The main point, in my view, is that though the application was late, it was not very late. The application pursued by S.E.T. for judgment in default of defence was made in ignorance of the fact that a challenge to the jurisdiction had already been made, but it is not suggested that this was the fault of F&M. S.E.T. does not suggest that it has suffered any prejudice. In the circumstances, I do not think that the court should lightly countenance an outcome which requires it to enter judgment in England without considering whether a stay is mandated under the Judgments Regulation in favour of the court in Cyprus. In my view, the principled approach is to extend F&M's time for challenging the jurisdiction under CPR 3.1(2)(a) until 3 May 2013, when the application was issued. I shall therefore proceed to consider the jurisdiction challenge.” […] 49 [...]this is not a case in which any substantial risk of irreconcilable judgments arises. This is because the issue in the Cyprus court is whether the bank should pay S.E.T.'s demand under the guarantee because of S.E.T.'s alleged fraud. The issue in the English proceedings, on the other hand, is whether S.E.T. is entitled to recover under the contracts of supply. The courts are concerned with different contractual relationships.” [32 and 49]