Tramp Oil & Marine Ltd v State Enterprise for Water Transport & Ors

J U D G M E N T

1. LORD JUSTICE AULD: Lord Justice Clarke will give the first judgment.

LORD JUSTICE CLARKE:

Introduction

2. This is an appeal from two orders made by Morison J on 16th July 2004. The respondent ("Tramp") supplies bunkers to ships. It is not in dispute that in 1989 and 1990 Tramp supplied bunkers to ships owned or managed by the appellant, which was and is an Iraqi state enterprise and which I will call "SEWT". Tramp's case is that SEWT has not paid for the bunkers. Its claim in 1996 was about US$7.5 million, inclusive of interest. Before the judge it was said to be over $51 million and is now said to be more than $63.5 million.

3. The orders which are the subject of this appeal arise out of an application to strike the statement of case out for want of prosecution. The application came before Morison J. SEWT applied for an adjournment in order to enable it to address evidence served the day before the hearing, which was on 16th July 2004. The judge refused the application. He then heard oral argument on the application to strike out but refused it. SEWT initially appealed against both orders pursuant to permission which I granted, albeit with some hesitation, on 25th November 2004.

The claim

4. The writ was issued on 10th July 1996. Annexed to the writ was a schedule showing the names of the vessels said to have been supplied, the delivery dates of the bunkers, the amounts invoiced and the interest said to be due. It shows delivery dates between 30th May 1989 and 3rd August 1990, but principally between April and the end of July 1990. It will be recalled that Iraq invaded Kuwait on 5th August 1990. As at 10th July 1996 the schedule shows a principal amount said to be due of US$1,515,927.76, with interest of US$6,090,372.55, making a total inclusive of interest of US$7,606,300.28.

5. As the judge explained in paragraphs 2-10 of his judgment, the aftermath of the invasion of Kuwait put considerable obstacles in Tramp's way. By resolution 661 the United Nations imposed sanctions against Iraq as from 6th August 1990. Iraq subsequently passed Law 57 to take effect from the same date, as the judge put it, ostensibly for the protection of Iraqi property: see Articles 5-8 set out in paragraph 3 of the judgment. That law made it almost impossible for Tramp to proceed against SEWT in Iraq.

6. There was however contact between the parties. SEWT at no stage denied the debt. Mr Charkham relies in particular upon three telexes from SEWT's accounts department in 1992 and 1994. The first is telex no 51741 dated 15th September 1992 and was sent in response to a telex from Tramp which included the following:

"As you may appreciate for about two years we have explored every possibility to resolve what is an extremely difficult situation for us. We have contacted all relevant national and international authorities in our efforts to find prompt and manageable solution. From our extensive enquiries we have established that in order for funds to be released to us it would simply require the instruction to be issued from yourselves to [your] bankers authorising them to transfer monies. The amount outstanding as of 15/9/92 is USD 3,033,188.36 and we would remind you that interest continues to increase daily. Therefore we would strongly encourage that the appropriate instructions be passed to your bank most urgently. ..."

7. SEWT replied on 24th September 1992 as follows:

"RYT no 51741 dated 15/9/92. As you are aware we are not disputed [your] monies and willing to see [your] outstanding is settled in due course. The only reason we have been without this undisputed amount is because of the continuing sanctions on our fleet and have therefore not found it easy to arrange remittance of the monies which we so obviously wish to do. In view of this fact we suggest again to supply you crude oil in lieu of actual monies. Once this proposal accepted by you we will take all required arrangements."

To my mind that telex is a plain acceptance of the amount demanded, since it plainly describes the amount as undisputed. Moreover, the telex was sent at a time when SEWT was able to (and no doubt did) check the true facts from relevant documents and, if necessary, relevant personnel.

8. The second telex relied upon by Mr Charkham included the following:

"Re: outstanding invoices. ...

We are absolutely not allowed to pay interest on all unpaid debts stopped by the blockade. Accordingly, kindly forget about the interest, Iraqi authorities agree to pay all your outstanding invoices excluding the interests calculated by you from our blocked balances. ..."

That telex was dated 23rd April 1994.

9. The third telex is in these terms:

"Thanks you very much for your [telex] number 106129 [dated] 29/9/94 which shows your real intention to solve the outstanding financial problems between us. [Please] confirm to us clearly that payment of the amount of USD (1500354.36) will mean settlement of our outstanding amount due to you. As soon as we get your mentioned confirmation, we will arrange paying the above amount from the blocked balances.

Thanks again for your good understanding in ... solving our mutual problems, which sure will [lead] to a better co-operation in the future when things return to normal."

10. It will be noted that the figure of US$1,500,345.36 is very close to the figure of US$1,515,972.76, to which I referred earlier. The judge was entirely justified in describing the position thus, in paragraphs 4 and 5 of his judgment:

"4. The parties to this action were in touch with one another and from time to time the first defendants took this position: they acknowledged the debt, said that they would wish to pay it, but said also that at present it was not possible for them to do so. As an organisation in Iraq, they were not unique in that position. The evidence before me shows a similar view was taken in relation to claims made by a number of merchant banks for whom Messrs Clyde & Co, the claimant's then solicitors, were also acting.

5. The first defendants were anxious to avoid damaging normal commercial relationships, which they hoped would be resumed as soon as circumstances permitted. Despite a visit by one of the officers of the claimants to the first defendants in Baghdad in 1995 when a further acknowledgement of the debt was made, the question of interest was still in debate. No payment of any sum was forthcoming, and the matters were put into the hands of Messrs Clyde & Co on 9 July 1996. They issued a writ on 26 July to protect their client's position, although it was not the claimant's wish to proceed in the courts, since they accepted the assurances which they had been given that the debt would be paid when circumstances made that possible."

Renewal of the writ

11. The writ was renewed once without leave. It was not served, but on 26th September 1996 it was renewed until 9th July 1997. Thereafter, pursuant to leave granted by a number of different judges in the Commercial Court, it was renewed in June each year until 9th July in the succeeding year. On 9th July 2002 it was renewed until 8th July 2003.

12. The reason for the renewal was this. Having issued the writ, Clyde & Co were faced with the problem of how to serve it. It was thought that there would be no point in serving it unless the service would be recognised as good service in Iraq, so that a judgment obtained in the action would be recognised by the Iraqi courts and enforceable in Iraq. As the judge explained in paragraphs 6-8 of his judgment, the problem was that the law of Iraq did not provide for the service of legal proceedings commenced in other jurisdictions. That was not, so far as I am aware, in dispute between the Iraqi lawyers advising the parties.

13. There is, however, a Convention made on 25th July 1935 which governs process as between the United Kingdom and Iraq. Two particular provisions are relevant: Articles 3(a) and 4. By Article 3(a) of the Convention a request for service must be addressed and sent by a consular officer acting for the United Kingdom to the competent authority in Iraq requesting the authority to cause the document in question to be served. The evidence showed that requests for service under the Convention should be addressed and sent to the Ministry of Justice in Iraq. It would then be the responsibility of that authority to serve the relevant document on the defendant in accordance with the municipal law of Iraq. Article 4 provides in effect that without any intervention of the Iraqi authorities, service may be effected by the consular officer acting for the United Kingdom in any manner permissible by the law of Iraq. Thus, as the judge observed in paragraph 8 of his judgment, the requirements for service in Iraq in both Articles 3(a) and 4 required the existence of consular services in Iraq. The problem was that the United Kingdom had no diplomatic relations with Iraq during the relevant period, so that no such consular services existed.

14. Clyde & Co took regular advice from the Foreign and Commonwealth Office ("the FCO") as to the position. They were advised that service could not be effected in Iraq because of the absence of a consular presence. That advice was subsequently confirmed as correct by Sir Michael Wood, Senior Legal Adviser to the FCO.

15. The relevant information, including in particular the advice obtained from the FCO and from a distinguished Iraqi lawyer called Dr Al-Qasem was put before the court on each occasion on which leave to renew the writ was sought. SEWT has at no stage applied for an order setting aside the orders giving leave to renew the writ. I should however note in passing that there were no communications between Tramp or their solicitors and SEWT between 1995 and the time when the writ was subsequently served.

Service of the writ

16. In 2002 Tramp changed its solicitors to Shaw and Croft. They decided to try to obtain permission to serve the writ by an alternative method. They considered the possibility of serving the proceedings on the UK P&I Club. However, when the matter was considered by Tomlinson J, he indicated that the mere fact that the Club was in contact with SEWT was not necessarily a good reason to permit service on the Club. In a written note he wondered (as the judge put it) whether there could be service by post, but concluded his note by saying:

"However, no doubt the Claimant will wish to be satisfied that any method adopted will be recognised as effective in the event that enforcement of any judgment which may be obtained [will be recognised as effective] ..."

17. An oral hearing took place before Tomlinson J on 24th January 2003. He made an order which included the following:

"The Claimants have permission [to] effect service of the writ, all statements of case and other documents in this action upon the First Defendant by way of alternative service by serving the same by fax or by post or in person at the registered office of the Iraq State Enterprise for Water Transport, namely Ministry of Communications and Transport Complex, Baghdad, Iraq."

18. Pursuant to that order the writ was served personally at the registered office of SEWT in Baghdad on 6th March 2003. That was only a fortnight before the second Gulf War began and unfortunately the administrative offices of SEWT were destroyed some time after that in an air raid. Evidence was subsequently put before the court on behalf of SEWT that that was not good service under the law of Iraq.

The procedural position

19. SEWT has not applied to set aside Tomlinson J's order permitting alternative service. It follows that the service was regular under the relevant English rules of procedure. The writ was served under cover of a letter from Shaw and Croft which concluded:

"We strongly recommend that you instruct solicitors in London to advise you in light of these proceedings. We will be pleased to deal with your legal advisers in London direct if you care to provide us with their full contact details."

20. SEWT did not acknowledge service. Tramp did not however enter judgment under CPR 12.3 and 12.7 but, because of the unusual circumstances of the case, on 13th November 2003 Shaw and Croft wrote to the court explaining the position in detail. The court entered judgment for Tramp in default of acknowledgement of service on 24th November 2003. It also gave directions for the trial of quantum and fixed the date of 16th January 2004 for the assessment of quantum. On 14th January 2004 Teacher Stern Selby ("TSS") informed Shaw and Croft that they had been instructed by SEWT but had not seen the relevant documents. An adjournment was agreed.

21. On 13th February 2004 TSS issued an application notice seeking an order setting aside the judgment on the ground that the proceedings were not served and/or to have the proceedings struck out for want of prosecution. Negotiations ensued and, pursuant to an agreement between the parties, a consent order was made on 23rd April 2004 which provided that the default judgment be set aside; that Tramp's application to assess the quantum be withdrawn; that by 4.30pm on 28th April SEWT file an acknowledgement of service; and that by 4.30pm on 23rd May 2004 it either file and serve an application to strike out the claim in the action for want of prosecution together with evidence in support, or file and serve a defence to Tramp's claim in the action. The order also provided that if an application to strike out was made, Tramp should file any evidence in response by a certain date.

22. It is to my mind important to note that by that consent order SEWT agreed to and was indeed ordered to file an acknowledgement of service. It subsequently did so. It follows that SEWT thereby accepted service of the proceedings, so that it was and is not part of SEWT's case that the writ was not properly served under the relevant English rules of procedure, namely the CPR.

The applications

23. On 21st May 2004 SEWT issued an application for an order that Tramp's claim be struck out for want of prosecution, alternatively that summary judgment be given in SEWT's favour on some of the claim on the ground that part of the claim was statute-barred and/or in breach of sanctions legislation. The alternative application for summary judgment was however subsequently abandoned.

24. SEWT's case that the claim should be struck out for want of prosecution does not depend upon any alleged breach of or failure to comply with any rule in the Rules of the Supreme Court or the Civil Procedure Rules, but simply alleges want of prosecution. CPR 3.4 provides, so far as relevant:

"(2) The court may strike out a statement of case if it appears to the court -

(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;

(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings; or

(c) that there has been a failure to comply with a rule, practice direction or court order.

...

(5) Paragraph (2) does not limit any other power of the court to strike out a statement of case."

25. At one stage of the argument Mr Mallin sought to rely upon rule 3.4(2)(b). But on reflection, to my mind correctly, he accepted that he could not properly say that the statement of case was an abuse of process or "otherwise likely to obstruct the just disposal of the proceedings". He relies upon paragraph (5) and submits that Tramp was guilty of inexcusable delay such that a fair trial of the action is no longer possible and that the statement of case should be struck out under the inherent jurisdiction of the court.

26. Mr Charkham submits that the court should only strike out a statement of case under paragraph (5) if it would be an abuse of process to allow the action to proceed. It is not necessary in this case to decide whether that is correct because Mr Mallin submits that SEWT satisfies that test on the facts here. I would only say that there seems to me to be considerable force in Mr Charkham's submission: see Civil Procedure 2004, Volume 1, paragraph 3.45 and the cases there cited.

27. The judge refused the application to strike out the statement of case. As I indicated earlier, SEWT appeals against that refusal. However, before considering the appeal I should say a word about the application for an adjournment, which the judge also refused.

The application for an adjournment

28. It was suggested in SEWT's evidence before the judge that there was consular access in Iraq for United Kingdom citizens through Jordan. Tramp responded with evidence from the FCO to the contrary. SEWT applied for an adjournment which the judge refused. About a week before the date originally fixed for the hearing of this appeal (13th April 2005), SEWT abandoned its appeal against the refusal of the application for an adjournment. It did so on the basis that it now accepts both Tramp's evidence and its submission that the judge was correct. I therefore say nothing more about it.

The appeal

29. The judge set out the principles relevant to the exercise of his discretion in paragraph 15 of his judgment. Mr Mallin does not criticise the judge's approach in this regard. The judge correctly directed himself by reference to Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926, Purefuture Ltd v Simmons & Simmons , unreported, Court of Appeal, 25th May 2000 and Amy Nasser v United Bank of Kuwait [2001] EWCA Civ 1454, 21st December 2001.

30. The judge did so by setting out a number of paragraphs in the judgment of Sir Christopher Slade in the Amy Nasser case as follows:

"26. In the light of the decision of this court in Biguzzi v Rank Leisure plc [1999] 1 WLR 1926 it is common ground that, contrary to the Judge's approach, the relevant principles at the time when he gave his judgment were not those in Birkett v James but those set out in the CPR. Indeed Lord Woolf MR in that case went so far as to say (at p 1934G)

'The whole purpose of making the CPR a self-contained code was to send the message which now generally applies. Earlier authorities are no longer generally of any relevance once the CPR applies.'

27. I am, however, sure that in saying this, Lord Woolf MR was not intending to suggest that the factors regarded by the court in Birkett v James as crucial, namely the length of the relevant delay, the culpability for it, the resulting prejudice to the defendant and the prospects of a fair trial are no longer relevant considerations when the court has to deal with an application for dismissal for want of prosecution. As he put it (at p 1934 E-F), under the new approach which the CPR requires:

'Judges have to be trusted to exercise the wide discretion which they have fairly and justly in all circumstances, while recognising their responsibility to litigants in general not to allow the same defaults to occur in the future as have occurred in the past. When judges seek to do that, it is important that this court should not interfere unless judges can be shown to have exercised their powers in some way which contravenes the relevant principles.'

28. In the Biguzzi case the judge in the court below had in fact sought to apply the CPR principles. In a still more recent decision, Purefuture Ltd v Simmons & Simmons 25th May 2000 (unreported) the Court of Appeal had to consider the position that arose in a case, similar in this respect to the present, where the judge in the court below had dealt with an application to dismiss an application for want of prosecution on the basis of the Birkett v James principles, without regard to the principles of the CPR. The court was of the unanimous opinion that, if the matter was considered on the basis of those old principles, there would be no basis on which the court could interfere with the exercise of the judge's discretion to strike out the action for want of prosecution.

29. However, Lord Justice Clarke, with whom Lord Justice Latham agreed, pointed out that the CPR should have been applied, albeit having regard to the rules of court that were in force at the relevant times. Having referred to a number of earlier decisions including Biguzzi (supra), he accepted (at paragraph 54-57) the following submissions by counsel for the appellant claimant:

'(1) The central issue is whether it would be fair or just to allow the action to go to trial. In deciding this question the court must consider its alternative powers so that a decision may, but need not necessarily be, the same as would have obtained under the old rules.

(2) Although the court no longer needs to consider prejudice in the Birkett v James sense, prejudice remains relevant to the issue of what is just (see Axa Insurance Co Ltd v Swire Fraser [the Times 29 January 2000] at paragraph 19)

(3) In many cases there will be alternatives that will allow the case to be dealt with justly without taking the draconian step of striking out (see Biguzzi at p 940b-c)

(4) In coming to its decision the court should consider:

(a) the overriding objective in Part 1 CPR;

(b) the flexibility to deal with this type of claim as given by the court's new case management powers;

(c) the rules which allow striking out (in an appropriate case) are to be interpreted in accordance with the overriding objective; and

(d) no single one of the available range of powers is inherently more appropriate than any other so that the court should consider all its relevant powers.

(5) However the considerations continue to include whether the prejudice is so serious that it would be unjust to the defendant to require the case to be tried.'

30. Subject to these points, Lord Justice Clarke accepted (at paragraph 53) the correctness of the following statement of Lord Lloyd in UCB Corporate Services Ltd v Halifax (SW) Ltd (unreported 6th December 1999):

'It would indeed be ironic if as a result of the new rules coming into force, and the judgment of this court in the Biguzzi case, judges were required to treat cases of delay with greater leniency than they would have done under the old procedure. I feel sure that that cannot have been the intention of the Master of the Rolls in giving judgment in the Biguzzi case. What he was concerned to point out was that there are now additional powers which the court may and should use in the less serious cases. But in the more serious cases striking out remains the appropriate remedy when that is what justice requires.'

31. Having set out the factors which he took into consideration Lord Justice Clarke concluded as follows (in paragraph 60 and 61):

'However, even bearing all those factors in mind, if one stands back from the facts of this case and asks whether it is just to allow a claim to proceed to trial over 12 years after the event, where the issues depend to a very significant extent on the judge making findings about the content of conversations at a crucial time in the transaction, in circumstances where there is little or no contemporary written material to assist him, where no proceedings were issued for nearly six years and where, thereafter the claimant was guilty of inordinate and inexcusable delay for nearly 2½ years under the rules then in force, the answer is in my opinion "no". In these circumstances it would not be just, and in accordance with the overriding objective set out in CPR 1.1, to permit the claim to proceed.'

32. Lord Justice Latham agreed, saying (in paragraph 64) that the judge in the court below had essentially been saying that a fair trial of the matters raised by the claim was no longer possible and (in paragraph 68) that this was clearly the result of the delay of the claimant, both before and after the issue of the writ.

33. I am, with respect, very content to approach the examination of the exercise of the Judge's discretion in the present case on the basis of the guidance given in Purefuture ."

31. I should also refer to the decision of this court in Purdy v Cambran , unreported, Court of Appeal, 17th December 1999, in which the court dismissed an appeal against an order striking out a claim for want of prosecution as an abuse of the process of the court in circumstances when liability had been admitted. The judgment underlines two principles. The first is that, where a claimant waits until the limitation period has expired before issuing a writ or claim form, it is incumbent upon him and his advisers to progress the claim expeditiously. The second emphasises the court's flexible approach under the CPR. May LJ said this:

"51. The effect of this is that, under the new procedural code of the Civil Procedure Rules, the court takes into account all relevant circumstances and, in deciding what order to make, makes a broad judgment after considering available possibilities. There are no hard and fast theoretical circumstances in which the court will strike out a claim or decline to do so. The decision depends on the justice in all the circumstances of the individual case."

32. The judge rejected SEWT's two central submissions. They were, first, that Tramp was guilty of inexcusable delay and, second, that it was no longer possible to have a fair trial. Mr Mallin submits that the judge was wrong under both heads. I will consider them in turn.

Inexcusable delay

33. The facts are not in dispute. The bunkers were delivered in 1989 and 1990. The last invoice is dated August 1990. The first Gulf War finished in 1991. There followed some but infrequent contact between the parties. I have referred to the exchanges in 1992 and 1994, the last of which to my mind plainly acknowledged a liability in principle of over US$1.5 million exclusive of interest. The last written communication from Tramp to SEWT appears to be a telex dated 15th March 1995. The writ was issued on 19th July 1996. Mr Mallin submits that Tramp's delay in issuing the writ until the limitation period was about to expire is a relevant factor and that no explanation has been given for it. For my part, I would accept that, as appears from Purdy v Cambran (and indeed many other cases), such delay is a potentially relevant factor. However, it appears to me that on the facts of this case the reasons for the delay are reasonably clear and are understandable. They were that the debt was undisputed and the desire not to jeopardise Tramp's trading relationship with SEWT.

34. Ms Christine Grealish visited Baghdad in 1995, and in an affidavit of Mr O'Brien of Clyde & Co dated 24th September 1996 he said this:

"6. The primary purpose of the proceedings at this stage is to preserve the position with regard to limitation. It is hoped that when relations with Iraq are eventually normalised this claim will be settled amicably as liability has never been denied. Indeed it is clear that [SEWT] are keen to preserve their commercial relationship with Tramp Oil ..."

In support of that statement Mr O'Brien relied upon a letter from the appellants of 28th March 1995 which included the following:

"We are respectfully reminding you with the good Commercial Relations between the two of us which we had for long years and which had been halt because of certain causes and conditions out of the two Parties control, representing in the economic blockade, so for the above mentioning reasons we hope now to revivify and develop these relations once again and to exert efforts in a way that serve the two parties interests ..."

I see no reason to reject Mr O'Brien's evidence. Nevertheless, Tramp did have a responsibility to press on with the action once it was begun on 19th July 1996.

35. In the period after the issue of the writ, the writ was extended from year to year in the circumstances which I have already described. No progress was made until 24th July 2003 when Tomlinson J made the order described above. Mr Mallin points to the fact that there is no explanation why Tramp could not have taken that step at any time between 1991 and 2003.

36. The judge rejected the submission that the delay was inexcusable for any of the reasons relied upon. He expressly held that the delay was not caused by failure on the part of Tramp or its solicitors. As I read his judgment, he accepted the submission that service was either not possible in a way which was lawful under the law of Iraq or, if that was wrong, and service could be effected through Jordan, Tramp's solicitors, Clyde & Co, were not told of that possibility by the FCO and had relied upon the advice of a distinguished Iraqi lawyer that without consular intervention service which was lawful under Iraqi law could not be effected. The judge expressed his conclusion in paragraph 15 of his judgment concisely in this way:

"The reality of the position is that the international situation made normal commercial relations between the United Kingdom and Iraq quite impossible, and the delay was [not] caused by any failures on the claimants' part."

37. The judge then set out the relevant principles, to which I have already referred, and shortly set out his conclusions in paragraph 16 of his judgment as follows:

"In my judgment the claimants are right. The real question is whether the claimants were obliged to test the water by serving the proceedings in a way which was not lawful in Baghdad and which would not have led to an enforceable judgment, unless the first defendants agreed to submit to the jurisdiction of this case, as they acknowledge they have done. It is not suggested by the first defendants that the extensions to the writ should never have been granted. All that is said is that, despite its inefficacy, according to Iraq law, an attempt should have been made earlier to adopt an alternative means of service."

38. For my part, I entirely agree with the judge. Even now it is not admitted (or averred) that the method of service ultimately adopted was lawful in Iraq. It appears to me that it was excusable for Tramp to act on the advice of Clyde & Co, who in turn cannot fairly be criticised for acting on the advice of the FCO and the Iraqi lawyer whom they consulted. There was no point in seeking to serve the writ in Iraq in a manner which was not lawful in Iraq, because such service would almost certainly make a judgment then obtained unenforceable in Iraq. In the event SEWT has accepted service, but there was to my mind no reason for Clyde & Co or Tramp to think that it might have done so earlier.

Fair trial

39. The judge expressed his conclusion under this head thus:

"17. I do not accept that a fair trial of the case is not now possible, nor that the first defendants will be unable to trace the relevant witnesses. I think their enquiries are not yet complete. A trial judge will be able to decide whether the case has or has not been proved, having regard to both side's difficulties about documents. It would not be a correct use of the strike-out procedure to strike out a claim when the claimants and their advisors cannot be criticised for the way they have handled the case. In my view, no such criticism would be justified. The delay is most unfortunate, but it is not, in my judgment, culpable."

40. I should note that Mr Mallin observes in connection with that paragraph that there was evidence before the judge that all efforts to obtain relevant witnesses and documents had indeed failed, and for present purposes I accept that as correct.

41. SEWT's case is that because SEWT's buildings were destroyed no relevant papers have been found and none of the relevant personnel is available to give evidence. In paragraph 10 of a statement made on 21st May 2004, Mr Jacob Rabinowicz, who is a partner in TSS, and whose statement is based in part at least on information supplied by Dr Fakhri Kadhum, who is or was the head of a newly-constituted Iraqi Legal Service, said this:

"I believe that a fair trial of this claim is no longer possible because:

10.1. None of the relevant personnel on behalf of [SEWT] is any longer available to give evidence. Such personnel would have given evidence as to whether any of the shipments in question (and, if so, which) were received by [Tramp], the terms on which any such shipments were made (it is clear from the evidence of Ms Grealish for [Tramp] that individual terms were negotiated for each shipment which are distinct from [Tramp's] Standard Terms and Conditions - as to which see below) and the question of any disputes between the parties as to any of the shipments.

10.2. [SEWT] does not have any documents in relation to the transactions in question. The missing documents would have provided evidence in relation to the same matters as those set out in the previous sub-paragraph.

10.3. The only evidence as to the shipments themselves on which even [Tramp] relies is that of Christine Grealish. However, it is clear from her evidence that she relies on her consideration of the relatively few remaining documents. In paragraphs 6 and 7 she refers to the confirmation telexes. It is clear that there are only 6 such telexes remaining ... She goes on to say that she is sure 'from [her] experience' that there was a confirmatory telex for each and every invoice. There is therefore no evidence at all of the delivery of the other shipments. Furthermore, the telexes are the only evidence on which [Tramp] relies as to the terms of payment which are central to the limitation issues which affect a large part of [Tramp's] claim."

Mr Rabinowicz then makes a number of specific points about limitation and sanctions.

42. However, while recognising the theoretical problems identified in that statement, there is in my opinion no reason to think that Tramp's basic case is not correct, as evidenced by the three telexes from which I quoted earlier, which clearly stated as long ago as 1992 and 1994 when the documents and personnel were available that the principal amounts were undisputed.

43. Mr Mallin submits that if witnesses and/or documents were available, which the evidence shows they are not, it might be shown that those admissions are wrongly made. Of course anything is possible, but it appears to me that the court should apply common sense in approaching such a suggestion. I can see no real prospect of SEWT being able to challenge the principal amount admitted in the 1994 telex if documents or witnesses were now available. The overwhelming probability is that if it had been possible to challenge the relevant amounts, SEWT's accounts department would have done so in the early 1990s.

44. The burden of proof remains on Tramp, and it may be that it will not establish the whole of its claim for the principal. The burden is also of course on Tramp to prove its claim for interest. Thus, in so far as Tramp relies on its standard terms and conditions, the burden will be on it to establish that those terms and conditions form part of the relevant contract or contracts. If it establishes that they did form part of the relevant contract or contracts, any issue as to whether the relevant interest provisions in the contract or contracts are a penalty will be partly a matter of law, which can be fairly tried. In so far as evidence of the rates usual in the trade at the time is relevant to any issue of penalty, I see no reason why such evidence should not be available today. Moreover, in so far as Tramp is unable to establish a contractual claim for interest, the court will have a discretion what interest to award.

45. In all the circumstances, the judge was in my judgment entitled to hold that a fair trial remains possible on each of the relevant aspects of the case.

Conclusion

46. I have reached the clear conclusion that the judge made no error of principle and did not exercise his discretion in a manner with which this court could properly interfere. On the contrary, he was in my opinion correct to hold that Tramp was not guilty of inexcusable delay and, in any event, that a fair trial remains possible. I detect no abuse of process here but, whatever the relevant test, the judge was to my mind justified in refusing to strike out the statement of case.

47. In all these circumstances, although Mr Mallin has said everything which could possibly be said on behalf of SEWT, I would dismiss the appeal.

48. MR JUSTICE PATTEN: I agree.

49. LORD JUSTICE AULD: I also agree.

ORDER: Appeal dismissed; the appellant to pay the respondent's costs of this appeal.

(Order not part of approved judgment)