There are numerous cases reported on this blog where issues relating to service of the claim form have gone wrong for claimants.  However, as we have recently seen, a failure to respond accurately and timeously to claim form issues can give rise to real difficulties for defendants (and most probably their lawyers). Certainly if I ran a firm that represented defendants I would be spending time and money investing in knowledge about claim form issues.  The defendant came to grief on a procedural issue in the judgment yesterday in Griffin Underwriting Ltd v Varouxakis (Free Goddess) [2018] EWHC 3259 (Comm).

“Looking at the matter overall, I consider that it is not in the interests of justice to grant relief from sanctions in this case. To do so would not promote the efficient conduct of litigation. There has been a serious failure to comply with the rules for which there is no good reason



Remember that in Hoddinott & Ors v Persimmon Homes (Wessex) Ltd [2007] EWCA Civ 1203 the Court of Appeal decided that all issues relating to challenging the validity of the claim form had to be exercised by using CPR Part 11, not just matters relating to international service.

Part 11. Procedure for disputing the court’s jurisdiction

(1) A defendant who wishes to –
(a) dispute the court’s jurisdiction to try the claim; or
(b) argue that the court should not exercise its jurisdiction
may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have.
(2) A defendant who wishes to make such an application must first file an acknowledgment of service in accordance with Part 10.
(3) A defendant who files an acknowledgment of service does not, by doing so, lose any right that he may have to dispute the court’s jurisdiction.
(4) An application under this rule must –
(a) be made within 14 days after filing an acknowledgment of service; and
(b) be supported by evidence.
(5) If the defendant –
(a) files an acknowledgment of service; and
(b) does not make such an application within the period specified in paragraph (4),
he is to be treated as having accepted that the court has jurisdiction to try the claim.



The claimant issues against the defendant who lives in Greece. The claim form was served on the defendant in Greece in March 2017. On the 27th March 2017 the defendant filed an acknowledgement of service indicating that he intended to dispute jurisdiction. The parties thereafter agreed a moratorium in relation to the litigation terminable on 48 hours’ notice.

On the 24th October 2017 the claimant’s solicitors wrote withdrawing the agreement for a moratorium.

The defendant did nothing thereafter.

On the 1st May 2018 the claimant applied for judgment in default of defence. This led the defendant, on the 25th May 2018,  to issue an application under CPR Part 11 to dispute the jurisdiction.


Mr Justice May considered whether the application to dispute jurisdiction had been made late.   He found that it was late.
  1. Miss Philippa Hopkins QC for Griffin submits that Mr Varouxakis’ challenge to the jurisdiction comes too late. She says that he had 28 days to challenge the jurisdiction after acknowledging service, expiring on 26 April 2017; that time ceased to run against him as a result of the agreed moratorium concluded on 25 April, at which time there was one day left; but that the moratorium was terminated by Griffin’s solicitors’ email dated 24 October 2017 as a result of which time ran again from (at latest) 7 November 2017. As he failed to issue any application to challenge jurisdiction, he must be taken to have submitted.
  2. Mr Richard Sarll for Mr Varouxakis agrees that the deadline for issue of an application to challenge jurisdiction was 26 April 2017 and that deadline was extended by the parties’ agreed moratorium. He submits, however, that while that moratorium was still in force so that Mr Varouxakis was not required to do anything, an automatic stay of the proceedings came into effect pursuant to CPR 15.11(1), which could only be lifted by an application to the court; and that the jurisdiction challenge was issued on 25 May 2018 before the stay was lifted and was therefore in time.
  3. In my judgment the correct analysis is as follows.
  4. Upon filing his acknowledgement of service, Mr Varouxakis had 28 days to make his application to challenge the jurisdiction of the court, expiring on 26 April 2017: CPR 11(4) as varied for Commercial Court proceedings by CPR 58.7. In the event that he failed to do so, he would be treated as having accepted that the court has jurisdiction: CPR 11(5). The making of an application to challenge jurisdiction would mean that no Defence need be served: CPR 15.4(2).
  5. CPR 2.11 provides that the time specified by a rule for a person to do any act may be varied by the written agreement of the parties. In the Commercial Court, however, any such agreement must be notified to the court in writing, with reasons, and the court may make an order overriding the agreement: CPR 58 PD para 7. It would no doubt be unusual for the court to wish to override a sensible agreement made by the parties, but this at least enables the court to retain control of the proceedings. CPR 2.11 contains no express limit on the length of any agreed variation of time but does include a cross reference to CPR 3.8. CPR 3.8 also enables the parties to agree an extension of time for doing an act required by the rules where the rules also specify the consequences of failure to comply, but provides that unless the court orders otherwise the maximum extension which can be agreed is 28 days and, even then, that the extension must not put at risk any hearing date. Paragraph C3.3 of the Commercial Court Guide explains that the general power to agree variations to time limits contained in CPR 2.11 enables the parties to agree extensions longer than 28 days, but that even if this is agreed, the court should be invited to make a consent order.
  6. It seems to me that there is some tension between CPR 2.11 and CPR 3.8 but, in the Commercial Court at any rate, the parties must notify the court of any agreed extension, as required by the rules and the guide. In the present case the parties did not notify the court of the moratorium agreed on 25 April 2017. In those circumstances a question arises as to the effect of the moratorium. Did it take effect to extend the time for challenging the jurisdiction indefinitely despite the parties’ failure to notify the court? Was it effective to extend the time but only for 28 days (e.g. if CPR 3.8 was the applicable rule)? Or did the failure to notify the court render the moratorium wholly ineffective?
  7. I would hold that the failure to notify the court meant that the moratorium was not effective to extend the time for the defendant to challenge jurisdiction. It is important that the court retains control of the proceedings and has at least the opportunity to consider whether to override any agreement reached between the parties, in accordance with CPR 58 PD para 7. It is not open to the parties to agree an indefinite extension of time without notifying the court. To hold that the moratorium was effective despite the failure to comply with the notification requirement would deprive the court of control and would mean that there was no effective sanction for non-compliance. Or as Hobhouse J used to say in the days long before the CPR, in this court it takes three to make an agreement.
  8. Accordingly Mr Varouxakis must be treated as having accepted that the court has jurisdiction in accordance with CPR 11(5). The same result would follow slightly later if the agreed moratorium was effective to extend the time but only for 28 days.
  9. It is only if the moratorium was effective to suspend the running of time indefinitely, subject to 48 hours’ notice, that there is any scope for a different conclusion. Even then, however, the result is the same. In that event Mr Sarll advances two submissions. The first, as already noted, is that the agreed moratorium (in effect an agreed stay) was overtaken by an automatic stay pursuant to CPR 15.11 which could only be lifted on application to the court. However, CPR 15.11 only operates when six months have expired since the end of the period for filing a defence. If the period for filing a defence has been indefinitely extended by an effective agreement between the parties, there is no scope for an automatic stay.
  10. The second submission is that no effective notice was given to terminate the agreed moratorium. Citing Mannai Investment Co Ltd v Eagle Star Life Insurance Co Ltd [1997] AC 749 at 768, Mr Sarll submits that the email dated 24 October 2017 was insufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when it was intended to operate. I do not accept this. In my judgment the email would have left the reasonable recipient in no reasonable doubt that, in the absence of a proposal to pay the claim (and not merely to discuss it) by 6 November 2017, the agreed moratorium would thereupon come to an end. At that point time would begin to run again. This was more than the 48 hours’ notice required by the terms of the moratorium, but that is no objection.
  11. Accordingly, even if the moratorium was effective in accordance with its terms, it came to an end after 6 November 2017 and, because Mr Varouxakis did not file an application to challenge the jurisdiction of the court, he must on this analysis also be treated as having accepted jurisdiction in accordance with CPR 11(5).


The parties agreed that the court had a discretion to extend time [I am not sure I would have accepted this.   CPR Part 11 (5) states that a defendant who does not make an application within 14 days of acknowledging service “is to be treated as having accepted jurisdiction to try this claim”.  This appears to happen automatically, it requires no further action or any order of the court.  Once a party is automatically deemed to have accepted jurisdiction it is difficult to see how they can obtain an extension of time to dispute jurisdiction.]


The judge considered whether relief from sanctions should be granted.
Should there be relief from sanctions?
    1. It is common ground that the court has power to allow the defendant to make his application out of time, and that the principles governing relief from sanctions established by Denton v TH White Ltd [2014] EWCA Civ 906[2014] 1 WLR 3926 should be applied.
    2. Accordingly the first step is to identify the nature and seriousness of the defendant’s failure. I have held that, strictly speaking, the defendant’s time for making an application to challenge jurisdiction expired on 26 April 2017. On that basis, his application made on 25 May 2018 was 13 months late. However, in a case where the parties had agreed a moratorium, even one which I have held was ineffective, it was understandable that the defendant did not take any step to challenge jurisdiction between 25 April and 6 November 2017. After termination of the moratorium on 6 November 2017, however, there was in my judgment no valid reason to refrain from making the application to challenge jurisdiction if that was what the defendant intended to do. Realistically, therefore, the failure in question was a delay of six months in making a jurisdiction challenge. This was a serious failure.
    3. The second step is to consider the reason for the failure. Mr Varouxakis’ evidence is to the effect that he did not understand the email dated 24 October 2017 to amount to notice to terminate the agreed moratorium and that his understanding was that “the ball was therefore very clearly in [Griffin’s] court when we ended the conversation on 5 December 2017”. I find this difficult to accept. In my judgment the email dated 24 October 2017 is clear and the evidence of Griffin’s solicitors that it was explained that Griffin had no option but to continue the action in the absence of any settlement proposal is inherently plausible. It is more likely that Mr Varouxakis was simply hoping that, if he did nothing, the action would go away. I consider that there was no good reason for the failure to make the jurisdiction challenge.
    4. Finally, it is necessary to consider what justice requires in all the circumstances of the case. Here Mr Sarll submits that an important and even overwhelming consideration is the fact that refusal of relief would involve a case being heard in England which would not otherwise have been heard here for lack of jurisdiction – although that submission can only be assessed if the challenge to the jurisdiction is first determined on its merits. Mr Sarll relies on what was said by Ms Sara Cockerill QC, sitting as a deputy judge of this court, in Newland Shipping & Forwarding Ltd v Toba Trading FZC [2017] EWHC 1416 (Comm) at [94]:
“In this case there is an unusually disproportionate sanction, in that for the reasons which I have already given, this is a case where the Fifth Defendant would quite plainly be entitled to have the service of the claim form and the claim form itself set aside as this court clearly has no jurisdiction on the basis relied upon against the Fifth Defendant in relation to the claim sought to be brought against him. To deprive the Defendant of the opportunity to challenge a baseless assertion of jurisdiction when there is no prejudice would in my view be disproportionate. Further weight is given to this element by the fact that, moving beyond jurisdiction, a refusal of relief now would, as Mr Edey QC submitted, make an application to set aside the default judgment at the very least extremely difficult because that too would be advanced under the principles applicable to this application. Consequently the Fifth Defendant might find himself unable to set aside a judgment which this court had on a proper application of the rules no jurisdiction to pronounce and to which it appears likely there is a powerful defence.”
    1. It is apparent from this citation that Newland Shipping was a case where there was no proper basis for an assertion of jurisdiction over the defendant in question and where that defendant appeared to have a powerful defence on the merits. In such circumstances refusal of relief against sanctions would have meant, not only that the defendant was unable to pursue his jurisdiction challenge, but also that he was unlikely to be able to set aside the default judgment. It is not surprising that this was regarded as a disproportionate sanction.
    2. However, I do not accept that Newland Shipping stands for any broader principle that a more liberal approach to relief from sanctions should apply to cases where a defendant has failed to challenge jurisdiction within the time provided by the rules. Nor is it necessary, in order to deal with the question of relief from sanctions, to determine how the defendant’s jurisdiction application would be decided if the defendant were permitted to make it. On the contrary, the question of relief from sanctions will only arise in circumstances where the defendant has or may have a valid challenge to jurisdiction. Save in an obvious case such as Newland Shipping was held to be, that can be assumed. However, the rules provide a defendant with a fair opportunity to take steps to challenge jurisdiction. They spell out clearly in CPR 11(5) that the consequence of failing to take timely steps to do so is that he will be treated as having submitted. There is no need in these circumstances, at least in general, to regard the fact that the court will have jurisdiction where otherwise it might not have done as a reason, let alone a powerful one, to grant relief from the sanction provided by CPR 11(5).
    3. Looking at the matter overall, I consider that it is not in the interests of justice to grant relief from sanctions in this case. To do so would not promote the efficient conduct of litigation. There has been a serious failure to comply with the rules for which there is no good reason. It is not a case where it is obvious that there is no proper basis for the court to take jurisdiction. There is no default judgment to complicate the position. The sanction (i.e. that the defendant is taken to accept the jurisdiction of this court) is not disproportionate. On the contrary, in his capacity as a director and the controlling mind of the shipowner Mr Varouxakis has been content to enter into agreements providing for English law and jurisdiction, including the Settlement Agreement itself. Although questions of forum conveniens are irrelevant when considering whether the court has jurisdiction under Article 7(2) of the Recast Brussels Regulation, I see no reason why the court should be required to shut its eyes to the fact that it is clearly the natural forum for this claim when considering a different question, whether the loss of the right to challenge jurisdiction is a disproportionate sanction.
    4. There is, moreover, another feature of this claim which tells powerfully against an exercise of discretion in Mr Varouxakis’s favour. That feature is the shipowner’s repeated determination, at Mr Varouxakis’s instigation, to flout the awards made by the arbitral tribunal, as well as the judgment of this court enforcing the most recent of those awards. There is no evidence at present that this was other than a deliberate choice made by Mr Varouxakis personally, such as to render him in contempt of court. Mr Sarll submitted that this was an irrelevant consideration, relating to other proceedings. I do not agree. It is necessary to have regard to all the circumstances of the case. Those circumstances include the history which I have set out.
Conclusion on timing
  1. For these reasons I conclude that the application to challenge jurisdiction comes too late. The defendant must be treated as having accepted the jurisdiction of this court. It is not an appropriate case for relief against that sanction.