This was a cargo claim brought against the defendant carrier pursuant to a bill of lading incorporating the Hague Rules. The one-year time bar in art 3.6 of the Hague Rules started to run from 10 May 2021. The claimants issued their claim form against the defendant on 9 May 2022. The defendant is incorporated in Switzerland and its registered address is in Geneva. That address was set out on the claim form. The initial period for service was until 9 November 2022. The claimants did not immediately seek to effect service on the defendant in Switzerland. Rather, they corresponded with the defendant, seeking: (i) to get its agreement to appoint English solicitors to accept service; and (ii) to conduct negotiations with a view to settling the claim.

On 5 October 2022, the claimants applied under CPR 7.6 for a 4-month extension of time to serve the claim form because the Foreign Process Section (FPS) of the Court had advised that it would take up to five months to process and effect service of the required documents overseas. The first order was made on this basis, granting an extension to 9 March 2023.

The claimants submitted the documents to the FPS on 6 February 2023. On 27 February 2023, the FPS advised that they could not be located and appeared to have been lost. On the same day, the claimants submitted the documents again. They were told that service in Switzerland could take up to a further two months. The claimants therefore made a further application dated 3 March 2023, seeking a further extension of three months. The second order granted a further extension to 9 June 2023. Service was finally effected on 2 May 2023. The defendant applied to have both the first and second orders set aside.

Held: The second order is set aside.

In ST v BAI (SA) (t/a Brittany Ferries) [2022] EWCA Civ 1037, Carr LJ noted:

62. For ease of reference, I summarise the relevant general principles as follows:

i) The defendant has a right to be sued (if at all) by means of originating process issued within the statutory period of limitation and served within the period of its initial validity of service. It follows that a departure from this starting point needs to be justified;

ii) The reason for the inability to serve within time is a highly material factor. The better the reason, the more likely it is that an extension will be granted. Incompetence or oversight by the claimant or waiting some other development (such as funding) may not amount to a good reason. Further, what may be a sufficient reason for an extension of time for service of particulars of claim is not necessarily a sufficient reason for an extension for service of the claim form;

iii) Where there is no good reason for the need for an extension, the court still retains a discretion to grant an extension of time but is not likely to do so;

iv) Whether the limitation period has or may have expired since the commencement of proceedings is an important consideration. If a limitation defence will or may be prejudiced by the granting of an extension of time, the claimant should have to show at the very least that they have taken reasonable steps (but not all reasonable steps) to serve within time;

v) The discretionary power to extend time prospectively must be exercised in accordance with the overriding objective.

63. Following up on the question of limitation, as noted in [Qatar Investment & Projects Holding Co v Phoenix Ancient Art SA [2022] EWCA Civ 422] at [17(iv)] (and [Al-Zahra (PVT) Hospital v DDM [2019] EWCA Civ 1103] at [52(3)]), it was stated in [Cecil v Bayat [2011] EWCA Civ 135] (at [55]) that a defendant's limitation defence should not be circumvented save in 'exceptional circumstances'. This is a phrase that needs to be approached with care; it is one about which the judge himself expressed reservations. At their outer limit, the words 'exceptional circumstances' can be taken to mean 'very rare' (or 'very rare indeed'). In the present context, however, the phrase should not be taken to mean any more than its literal sense, namely 'out of the ordinary'. It means, as identified for example in [Hoddinott v Persimmon Homes (Wessex) Ltd [2007] EWCA Civ 1203] at [52], that the actual or potential expiry of a limitation defence is a factor of considerable importance. The factors in favour of an extension of time will have to be, either separately or cumulatively, out of the ordinary. Only in this way can the phrase 'exceptional circumstances' be reconciled with the primary guidance in [Hashtroodi v Hancock [2004] EWCA Civ 652] (at [18]) and [22]) that the discretion under CPR 7.6(2) is to be exercised in accordance with the overriding objective and in a 'calibrated' way, as emphasised in Qatar at [17(iii)]. It is neither helpful nor necessary to go further in terms of guidance, by reference to a need for 'powerful good reason', as the judge suggested, or otherwise.

Here, it was open to the claimants to defer issuing proceedings until the last day before expiry of the limitation period. However, this left very little slack for them to play with thereafter. Despite this, it was reasonable for the claimants not to seek to effect service immediately, but to explore both whether the defendant might appoint solicitors to accept service in England and whether it might be possible to resolve the claim amicably. However, following the exchanges of 20 July 2022, the claimants had no reason to believe that the defendant might appoint solicitors in England. From that point onwards, the claimants’ state of mind must have been, and certainly should have been, that service would probably have to take place by service via the FPS in Switzerland. It is hard to understand why documents were not lodged with the FPS at about that time. The Court assumes, in the claimants' favour, that they were not aware of the significant backlog at the FPS until about the beginning of October 2022, and that it was a surprise when they were told by the FPS that service would take about five months. On this basis, an extension was obviously required.

The application of 2 October 2022 ought to have brought more clearly to the Court’s attention that the claim was now time-barred. This was a serious lapse, although it is fair to say that many Commercial Court judges would know, without having to be reminded, that maritime cargo claims are likely to be subject to a one-year limitation period; and that the reference to a pending time bar gave some clue that the time bar might by now have come into effect. It is not necessary to dwell on this, however, because it is the claimants' dilatoriness after the first order that is decisive. The claimants knew that the claim form would have to be served in Switzerland, and the evidence is that they had been told by the FPS that service could take approximately five months. Having obtained an extension that would barely allow the claim form to be served before its expiry, it is incomprehensible that they thereafter did nothing in respect of service until February 2023. Even ignoring the time lost between 6 and 27 February 2023, which was not foreseeable and was not the claimants' fault, it must already have been obvious to them, for weeks if not months, that they had no realistic chance of effecting service by 9 March 2023. The fact that without prejudice negotiations were still going on is relevant, but cannot be a sufficient explanation, especially in circumstances where the claim had been time-barred since 10 May 2022.

The claimants' failure to serve the claim form within the initial period was arguably justified. However, the failure to serve the claim form by 9 March 2023 was wholly unjustified. The claimants had no good reason to delay lodging documents with the FPS after the beginning of October 2022. On the contrary, they knew that it was imperative to act speedily. Furthermore, when applying for the second order, they should have highlighted that their failure to lodge documents prior to February 2023 had occurred despite knowing that there was a backlog at the FPS, in respect of a claim that had long been time-barred.