Ali Shipping Corporation v “Sour Brodgradevna Industrija ‘Jozo Lozovina-Mosor’” - Court of Appeal (Hirst, Waite & Peter Gibson LJJ) - 19 December 1996

Practice - Dispute under shipbuilding contract shortly to be heard by arbitration - At late stage in the arbitration proceedings claimants discover new point to which they considered there was no defence - Claimants granted leave by High Court to serve proceedings out of jurisdiction on basis that they were likely to obtain summary judgment under Order 14 - Whether High Court wrong to grant leave to serve out

A dispute arose under a shipbuilding contract which was subject to English law and contained a London arbitration clause. The buyers claimed repayment of advance payments made on account of the purchase price and commenced arbitration in London some years ago. The hearing was due to take place in January 1997. The buyers’ claim was formulated under a Rejection and Rescission clause in the contract. It was the only clause then available to be relied on. That was because the Cancellation for Delay Clause (which entitled the buyers to a refund of the advance payments if delivery of the completed vessel was delayed beyond a specified delivery date) had not yet become operative - the contractual delivery date being still (at that time) in the future.