Murray -v- Camerons Limited [2017] JRC 045 (17 March 2017)

judgment the commissioner: 1. This began this afternoon as an application for judgment in default of an answer because the defendant has not filed its answer within the stipulated time. However the defendant has issued a summons which, amongst other things, seeks to challenge the jurisdiction of the Court. It does so on the basis that, on the facts of this case, there was an arbitration agreement; in other words there was an agreement to submit any dispute to arbitration as opposed to having it resolved by the Court.

2. It has to be said that that point is clearly uncertain. The letter of intent, which is the agreement relied upon by the plaintiffs, says nothing about arbitration, but it is argued by the defendant that it incorporates by reference an arbitration provision in a standard JCT document. That will be for resolution at the hearing of the summons which is now fixed for a date in June. At that time the Court will have to determine whether there is an arbitration agreement and if so what effect that has.

3. What Advocate Chiddicks argues is that, given the existence of this summons, this Court has no alternative but to not apply the time limits for filing an answer and so forth. He refers to Rule 6/7, in particular Rule 6/7/(7) which provides: "(7) Upon notice being given of an application under paragraph (3), time limits for the filing of pleadings (whether applicable by virtue of these Rules or by order of the Court) shall not apply, and shall not begin to run, until the application has been dismissed by the Court or abandoned, as the case may be.

4. He says that an application has been made under paragraph (3) because he says that the summons falls within paragraph 4(f), which is an application by the applying party for an order declaring that in the circumstances of the case the Court has no jurisdiction over that party in respect of the subject matter of the claim. He says that paragraph 4(f) applies to the situation where there is an arbitration agreement. In that he has the support of the decision of Commissioner Clyde-Smith in the case of Open Joint Stock-v-EN Group Ltd [2009] JRC 152A and in particular paragraph 30 which I quote as follows: "It is helpful to have regard to the wording of Rule 6/7(4)(f) namely that in the circumstances of the case "the Court has no jurisdiction over that party in respect of the subject matter of the claim " (my emphasis). The Court clearly has power over the defendant as a Jersey company because it is within its territorial jurisdiction, but we are not concerned with jurisdiction in that limited sense. We are concerned with jurisdiction over the defendant in respect of the subject matter of the claim. The subject matter is governed by the arbitration clause, and unless the plaintiff can satisfy the Court that the arbitration clause is null and void, inoperative or incapable of being performed or that there is not in fact a dispute between the parties with regard to the matter

agreed to be referred, the stay is mandatory and the Court thus has no jurisdiction over the subject matter of the claim, that jurisdiction being vested in the Chamber of Commerce and Industry of the Russian Federation. I agree with the Master, therefore, that the stay application is within the terms of Rule 6/7(4)(f). It follows that, as the Master said, that the provisions of 6/7(7) apply upon notice being given of an application and no summons for an extension of time was strictly necessary." 5. Advocate Santos-Costa argues strongly that that case is not applicable to the facts of this case. There, there was undoubtedly an arbitration agreement and indeed arbitration had been started. Here on the contrary, he says, there is a hopeless argument on there being an arbitration agreement because there is nothing to that effect in the letter of intent which is the agreement being relied upon and the standard terms were not incorporated. He may well be right in the sense that the Court in June may find in his favour. But this Court cannot say at this stage. It is obvious that there are some obstacles in the way of the defendant's argument but the defendant clearly has an arguable case.

6. In those circumstances I do not see how, unless we were to differ from the law as stated by Commissioner Clyde-Smith, one can say that this does not fall within Rule 6/7(7). There has been an application under paragraph (3), a summons has been issued which asserts that the Court has no jurisdiction because of paragraph 4(f). Advocate Santos-Costa argues that to interpret the Rules in this way would allow defendants to raise hopeless claims about arbitration and thereby obtain a delay in proceedings until the Court resolved that argument. We have no doubt that if the Court could at this stage of the proceedings see that the argument was absolutely hopeless, then it would regard it as an abuse of process and could therefore ignore the terms of Rule 6/7(7); the Court would never allow its Rules to lead to an abuse of process. But that is not the case here. As we have said the defendant has an arguable case albeit that it may not ultimately succeed.

7. Accordingly we feel we have no option but to say that Rule 6/7(7) applies. We cannot therefore direct at this stage that an answer be filed which was in the end the essence of Advocate Santos-Costa's application this afternoon.

8. We would however end by saying this. Between now and the hearing of the summons in June the defendant will have ample time to prepare itself in relation to the merits and to refine any pleading if that is what it wishes to do. We should add of course that it has already supplied a draft answer to the plaintiff. If I were sitting at the hearing in June and if I were to find against Advocate Chiddicks , I would certainly be minded to order that time be abridged and that he file his answer forthwith, as I could not see any prejudice in that being the case. I therefore advise strongly that the defendant should be in a position to file its answer forthwith should it lose the summons.

9. I also order that the costs of today be reserved, to be decided upon at the conclusion of the hearing of the summons. Authorities Royal Court Rules 2004, as amended. Open Joint Stock-v-EN Group Ltd [2009] JRC 152A . Page Last Updated: 22 Mar 2017 BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII