The claimant, Fimbank Plc (the Bank), applied under s 12 of the Arbitration Act 1996 (UK) (the Act) to extend the time for commencing arbitration proceedings against the respondent, KCH Shipping Co Ltd (KCH). The Bank intended to bring a damages claim against the carrier for misdelivery of cargo without presentation of bills of lading. The bills were subject to the one-year Hague/Hague-Visby Rules time limit in art 3.6. The Bank commenced arbitration against the registered owner of the vessel on which the goods had been carried, the MV Giant Ace, within the time limit as extended via correspondence with the time charterer's solicitors. The registered owner was a Panamanian company, Mirae Wise SA (MW). It subsequently became apparent that there was a bareboat charter between MW and KCH. As demise charterer, KCH said that it was the carrier, and relied on the time bar.

In bringing its application for an extension, the Bank relied on two heads of s 12(3) of the Act: '(a) that the circumstances are such as were outside the reasonable contemplation of the parties when they agreed the provision in question, and that it would be just to extend the time'; or '(b) that the conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question'.

Held: Application denied.

The Bank’s lawyers at the time were the Maltese firm Fenech & Fenech. Ms Ann Fenech looked into the claim and did a website search on Equasis. This showed the vessel’s flag to be Panama and its registered owners to be MW. Equasis gave a 'c/o' address of another entity 'Korea Line Corp' in South Korea. Korea Line Corp was separately described as 'ship manager/commercial manager'. Ms Fenech's evidence was that she did not join the dots between the SA designation of the company and the flag of the vessel and realise that MW was a Panamanian company. She said that she saw the Korean ship management company and thought that MW was a Korean company. On 24 January 2019 Ms Fenech sent a letter before action to MW. This letter was misdirected; the appropriate recipient of the claim was KCH. Ms Fenech neither knew about the bareboat charter nor inquired whether there was one.

On 6 May 2019 Ms Fenech was contacted by lawyers acting for KCH. They made it clear that there was a demise charterparty in place and that KCH was the demise charterer. The Judge found that Ms Fenech was surprised but that she grasped the implications of this information. If the bills were demise charterers' bills, the carrier was KCH, and the claim would need to be against KCH. The Judge noted that the course to be followed was obvious - to protect the Bank's position against KCH by one means or another. KCH accordingly said that, after that date, Ms Fenech and/or the Bank ought to have assumed that KCH was the carrier under the bills, and commenced arbitration against it within the extension period until 1 July 2019. Alternatively she should at least have ascertained from whom the extension had come. There were two possibilities. Either the extension had been given by MW, in which case the claim against KCH was time-barred, or it had been given by KCH, in which case the Bank needed to commence proceedings against KCH within the period as extended. Waiting was not going to improve matters.

As to s 12(3)(a), the Judge held that the circumstances, viewed overall, were not outside the reasonable contemplation of the parties when the contract was entered into. The circumstances were no more than the mistake, compounded (but not caused) by correspondence with other parties innocently reinforcing that mistake, compounded by a further error. That final decision was not realistically caused by anything in the correspondence. Ms Fenech knew nearly two months before the limitation period (as extended) expired that the real target was not the one she thought she was shooting at. Her actions from that point were a significant part of the relevant circumstances. In reality, time as extended was missed solely because of the deliberate decision of Ms Fenech not to claim against KCH and not to investigate by whom the extension had been given.

As to s 12(3)(b), the Judge considered that this was not a case where one could properly conclude that the conduct of KCH made it unjust to hold the Bank to the strict terms of the provision in question.

Even if one of the heads of 12(3) had been satisfied, the Judge would have refused to exercise her general discretion because of the Bank's delay in seeking an extension. The Bank knew from May 2019 that the right party was KCH. That was confirmed on 10 July 2019 by MW and again by KCH on 29 July 2019. This application was made in early November 2019.