The plaintiff, Griffin Underwriting Ltd, was a Guernsey insurance company which insured the MV Free Goddess. The defendant, Mr Ion G Varouxakis, was a Greek national and the sole director of the shipowner, Adventure Five SA. The vessel was insured under a policy of kidnap and ransom for a 30 days round trip via the Gulf of Aden. In 2012, while on its voyage from Egypt to Thailand, the vessel was seized by pirates in the Arabian Sea and taken to Somalia. By virtue of the insurance policy, the plaintiff paid around USD 6,500,000 including sums by ways of ransom payments for the release of the vessel. The vessel was eventually released in October 2012 and arrived in Oman. Following this incident, general average was declared. A settlement agreement was reached between the plaintiff, the shipowner and the vessel manager. It was agreed between these three parties that the bill of lading contracts were still in existence and would be performed by the shipowner. However, the shipowner failed to perform its obligations under the bill of ladings and the settlement agreement.

At the same time, the bill of lading holders commenced arbitration proceedings against the shipowner for the delivery of the cargo. The arbitral tribunal issued awards in favour of the cargo interests and ordered the shipowner to deliver the cargo. However, the shipowner did not comply. The vessel was eventually sold to another company by the defendant which had the effect of destroying the shipowner's possessory lien over the cargo for general average. The cargo was eventually discharged and sold in late 2017 in Oman and the vessel was sold for scrap.

The plaintiff commenced an action against the defendant on two principal grounds. First, the plaintiff argued that it had lost the right to recover general average on a subrogated basis against the cargo interests (or the value of that claim had been substantially reduced) by reason of the failure of the shipowner to complete the voyage to be performed under the bill of lading contracts. The plaintiff contended that the shipowner and the manager were in breach of the express and implied terms of the settlement agreement and that those breaches were procured or induced by the defendant. These breaches provided the cargo interests with a defence to any claim for general average contributions or alternatively with a monetary counterclaim which extinguished or substantially reduced any such claim. Secondly, the plaintiff claimed that the shipowner received a payment of USD 800,000 from the cargo interests on account of general average together with a further payment of USD 800,000 from the vessel's P&I club, for which it was obliged to account pursuant to cl 4 of the settlement agreement, but that the defendant ensured that it failed to do so.

Held: (1) The defendant must be treated as having accepted the jurisdiction of the court.
(2) Relief against sanctions is refused.
(3) Accordingly the defendant's jurisdictional challenge is dismissed.
(4) Had it been otherwise, the court would not have had jurisdiction under art 7.2 of the Recast Brussels Regulation (which provides that a 'person domiciled in a Member State may be sued in another Member State: … (2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur') to determine the plaintiff's first claim, but would have had jurisdiction to determine the plaintiff's second claim. Neither claim was to be characterised as a 'matter relating to insurance' under the Recast Brussels Regulation.

For the court to have jurisdiction over the plaintiff's first claim, the damage would have had to have occurred in England. The bill of lading provided that 'General Average shall be adjusted, stated and settled according to the York Antwerp Rules 1994 … in London'. According to this provision, there was an obligation on the bill of lading holders to pay any net general average contributions due from them to the average adjuster in London. Rights in general average arise at the time of the relevant sacrifice or expenditure. Rule G of the York Antwerp Rules 1994 provides for general average to be adjusted 'upon the basis of values when and where the adventure ends'. This occurs when the cargo is discharged from the vessel.

If the shipowner had performed its obligations under the bill of lading to repair the vessel and complete the voyage to Thailand, average guarantees which provided for English law and jurisdiction would have been obtained by the shipowner. In these circumstances, the court would have jurisdiction over the first claim. However, the voyage was never completed and no average guarantees were obtained. Therefore, the initial direct and immediate damage suffered by the plaintiff was in Oman where the shipowner was induced by the defendant to abandon the voyage. That damage was suffered as soon as and in the place where the value of the right was adversely affected. If the value of the right had not been damaged by the shipowner's breach of the bill of lading contracts, there would in due course have been an adjustment after delivery of the cargo in Thailand, which would in practice have resulted in a payment by the cargo insurers to the average adjusters in London. It can therefore be said that damage occurred also in London, but that was in reality the consequence of damage which had already occurred by reason of the abandonment of the voyage. Indeed the abandonment of the voyage meant that there was no point in requiring the average adjusters to carry out the adjustment which would have triggered the payment of the amount found to be due. Either it was obvious that any such liability would be extinguished by the bill of lading holders' counterclaim or alternatively any remaining claim for cargo's contributions would be effectively unenforceable without the security of an average guarantee from the cargo insurers, the ability to obtain which was lost with the loss of the shipowner's possessory lien when the vessel was sold in Oman. On either basis, the damage occurred in Oman.