XB AHTS Hero Shipping Inc. v Star Clippers Ltd
| Jurisdiction | Bahamas |
| Judge | Madam Senior Justice Deborah Fraser |
| Judgment Date | 01 August 2023 |
| Docket Number | 2021/CLE/gen/00415 |
| Court | Supreme Court (Bahamas) |
Her Ladyship The Honourable Madam Senior Justice Deborah Fraser
2021/CLE/gen/00415
COMMONWEALTH OF THE BAHAMAS
IN THE SUPREME COURT
COMMON LAW AND EQUITY DIVISION
Striking Out — Order 18 Rule 19(1)(a),(b),(c) and (d) of the Rules of the Supreme Court, 1978 — Order 31A Rule 20(1)(b) and (c) — Res Judicata — Henderson v Henderson Rule — Extension of Time to File Defence — Order 3 Rule 4 of the Rules of the Supreme Court, 1978 — Order 31A Rule 18 (2)(b) of the Rules of the Supreme Court, 1978
Mr. Jacy Whittaker for the Claimant
Mrs. Sophia Rolle-Kapousouzoglou with Mr. Valdere J. Murphy for the Defendant
There are two applications brought on behalf of the Defendant, Star Clippers Ltd (“ Star Clippers)” – namely, (i) an application for Striking Out; and (ii) an application for Extension of Time to file a Defence. Each application will be considered in turn.
The Claimant, XB AHTS Hero Shipping Inc. (“ Hero Shipping)”, is a registered company incorporated under the laws of The Marshall Islands and the owner of a 162 meter sailing passenger vessel known as “Golden Horizon” (ex Brodosplit Hull No. 483, previously intended to be named “Flying Clipper”) (“ Vessel)”. Hero Shipping is also a subsidiary of Brodosplit-Plovidba d.o.o, a company registered and incorporated under the laws of the Republic of Croatia. Brodosplit-Plovidba is a wholly owned subsidiary of Brodogradevna Industrija Split, dionicko drustvo (“ Brodosplit)” a company also registered and incorporated under the laws of the Republic of Croatia. Brodosplit is engaged in the business of shipbuilding.
Star Clippers, is a registered company incorporated under the laws of the Commonwealth of The Bahamas and the Respondent in the Matter of An International Arbitration pursuant to the UNUM Arbitration Rules (UNUM Arbitration 19.006) between Brodogradevna Industrija Split, dionicko drustvo (“Brodosplit”) and Star Clippers Ltd. (“ Arbitration)”.
On 02 October 2014, Brodosplit and Star Clippers entered into a shipbuilding agreement whereby Brodosplit agreed to build and deliver the Vessel to Star Clippers for a price of 荤63,335,000.00 (“ Agreement)”.
Subsequently, Star Clippers purported to terminate the Agreement for delay in completion by notice dated 29 March 2019. Brodosplit disputed Star Clippers' right to terminate the Agreement and, in turn, sought to terminate the Agreement for default on the part of Star Clippers by notice dated 25 June 2019. Star Clippers, similarly, disputed Brodosplit's right to terminate the Agreement.
Thereafter, by contract dated 05 July 2019 between Brodosplit and Hero Shipping, Hero Shipping purportedly purchased from Brodosplit all rights and title to the Vessel at a price of 荤69,200,000.00 (“ Contract)”.
Prior to the Vessel being delivered to Hero Shipping and pursuant to the Agreement, Brodosplit commenced an arbitration against Star Clippers for declaratory relief that the Agreement was lawfully terminated by its notice dated 25 June 2019. Star Clippers counter-claimed and asserted that, by reason of their decision to retract their termination notice of 29 March 2019, the Agreement was re-instated and Star Clippers remained entitled to delivery of the Vessel and damages for late delivery of the Vessel.
Pursuant to a request made by Star Clippers on 28 October 2019, the arbitral tribunal issued an interim award (“ Interim Award)” in the following terms (according to Hero Shipping):
“(1) The Tribunal orders Brodosplit (i) to refrain from facilitating, cooperating or entering into any transaction in respect of the Vessel, and (ii) to ensure on a best efforts basis, which encompasses taking any corporate action necessary, that Hero Shipping will not enter into any transaction or take any other action in respect of the Vessel, until the Tribunal decides on the preliminary measures to preserve the status quo as referred to by Star Clippers in its letter of 22 October 2019.
(2) The Tribunal shall decide on the costs of this application in a subsequent award.”
On 30 January 2020, the arbitral tribunal made another interim award (“ January Award)” modifying and extending the terms of the earlier Interim Award until the Tribunal's final decision in the Arbitration was issued (collectively, “ Interim Awards”).
Due to the Interim Awards, Brodosplit alleges that it was enjoined from taking steps to fulfill its obligations to Hero Shipping under the Contract to deliver the Vessel and, consequently, impeded Hero Shipping's exercise of its rights to sell its interest in the Vessel to a third party in December 2019, or to operate and otherwise make use of the Vessel, for the purposes of making a profit.
Also, by an email message dated 03 March 2020, a letter dated 25 May 2020 and other actions, Star Clippers allegedly threatened third parties, inter alia, Tradewind Voyages UK Limited (“ Tradewind)” with whom Hero Shipping entered into an agreement with. It was further alleged by Hero Shipping that Star Clippers would take legal action against Tradewind if it proceeded with an agreement with Hero Shipping to market and operate the Vessel.
Due to the purported threats, it is alleged that Tradewinds elected not to proceed with the agreement.
On 15 February 2021, the arbitral tribunal made a final award (“ Final Award)”, adjudging, inter alia, that: (i) Star Clippers validly terminated the Agreement; (ii) Star Clippers did not reinstate the Agreement; and (iii) Star Clippers was not entitled to possession of the Vessel.
Hero Shipping asserts that, as a result of the Final Award, the Interim Awards should not have been granted.
Consequently, Hero Shipping filed a Generally indorsed Writ of Summons on 05 May 2021 and a Statement of Claim on 26 May 2021 (“ Writ and SOC”) against Star Clippers for, inter alia, unlawful interference with Hero Shipping's proprietary and economic rights and interest in the Vessel intentionally, negligently or without cause.
Hero Shipping claims the following reliefs:
“(A) Damages;
(B) Interest;
(C) Costs;
(D) Such further or other relief as to the Court may appear to be just.”
Star Clippers was subsequently served with the Writ and SOC on 21 April 2021 and on 26 May 2021 respectively, but did not file a Defence.
After a myriad of subsequent applications, Star Clippers then filed an application for Striking Out on 29 April 2022 on the basis that the Writ and SOC disclose no reasonable cause of action, are scandalous, frivolous and vexatious, may prejudice, embarrass or delay the fair trial of the action, and/or are otherwise an abuse of the process of the court, including but not limited to the fact that:
A) The matters pleaded in the Statement of Claim are res judicata and Brodogradevna Industrija Split, dionicko drustvo (“Brodosplit”), through its wholly owned subsidiary, Hero Shipping is seeking to impugn, challenge or re-litigate matters which were heard and adjudicated upon by a duly appointed and competent arbitral tribunal in proceedings styled as “In the Matter of An International Arbitration Pursuant to the UNUM Arbitration Rules (UNUM Arbitration 19.0006) Between Brodogradvena Industrija Split, dionicko drustvo and Star Clippers Ltd; and
B) Hero Shipping could have intervened in the Arbitration under Article 1045 of the Dutch Civil Code but failed and/or refused to do so.
Also, on 21 July 2022, Star Clippers filed an application for Extension of Time in which to file its Defence.
The two issues that the Court must decide are: (i) Whether Hero Shipping's Writ and SOC disclose no reasonable cause of action, and/or are scandalous, frivolous and vexatious, and/or prejudice, embarrass or delay the fair trial of the action, and/or are otherwise an abuse of the process of the court? (ii) Whether Star Clippers ought to be permitted an extension of time in which to file its Defence?
Star Clippers filed the Second Affidavit of McFalloughn Bowleg Jr. on 27 October 2022 (“ Bowleg Affidavit)”. It provides that a Dutch attorney named Mr. Stefan Derksen (“ Mr. Derksen)” executed an unfiled affidavit (“ the Derksen Affidavit)” in Amsterdam, the Netherlands and that the said affidavit is exhibited to the Bowleg Affidavit. The Derksen Affidavit provides: (i) a summary of the Final Award; (ii) Article 1045 (“ Article)” of the Dutch Code of Civil Procedure (“ DCCP)” and states that, due to the Article, Hero Shipping could have intervened during the Arbitration once it established its interest in the proceedings and proves that there is an agreement as between Hero Shipping and either of the parties in the Arbitration; (iii) Hero Shipping could have intervened after the Interim Awards to: (a) request the arbitral tribunal discharge or vary the Interim Awards; or (b) submit a claim for damages or costs against Star Clippers in respect of the relief granted; (iv) Brodosplit claimed in the Arbitration that it had to pay 荤62,500 per day to Hero Shipping “ as a consequence of any court or arbitration decision in any dispute with Star Clippers [Hero Shipping] would be limited or prevented [from disposing] with, sell, charter or operated the Vessel after 30 th November, 2019”. Hero Shipping allegedly incurred damage as a result of the Interim Awards and, accordingly Hero Shipping was already compensated by Brodosplit for any purported loss, damage or otherwise; (v) that there was no binding contract for purchase of the Vessel between Hero Shipping or any third party; and (vi) Star Clippers did not threaten Tradewind that it would take legal action against the company if it proceeded with the agreement with Hero Shipping.
The Derksen Affidavit further provides that: (i) Star Clippers did not interfere with any...
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