Commercial Disputes Weekly – Issue 12519 July 2022

Jurisdiction
The Court of Appeal held that a group of claimants from Brazil can bring a claim against BHP in the English courts arising out the collapse of a dam in 2015. BHP owned the companies that operated the dam. The Court of Appeal overturned the decision of the lower court that the claims were an abuse of process and unmanageable. The judge’s error as to the manageability of the litigation had infected his conclusion that the claim was abusive. It remained uncertain whether the claimants could obtain full redress in the Brazilian proceedings and there was limited overlap between the English and Brazilian proceedings. It was therefore not necessary in the interests of the proper administration of justice to grant a stay of the English proceedings. The defendants’ argument that England was not the most appropriate forum also failed because there was cogent evidence of a real risk that the alternative forum (federal court in Brazil) was not available for any of the claimants.
Municipio de Mariana and others v BHP Group (UK) Ltd and another [2022] EWCA Civ 951, 8 July 2022

Construction
A building owner has successfully claimed from the building contractor the cost of replacing defective cladding and providing a waking watch until the defective cladding had been removed. The contractor’s breaches, between 2005 and 2008, included failing to install the cladding properly to ensure that it prevented or restricted the rapid spread of fire. It had also failed to demonstrate that the cladding met the specified performance standard or that it did not create an unacceptable risk of rapid external fire spread. The court rejected the contractor’s argument that the real cause of the losses was the owner’s realisation following the Grenfell tower fire, that the cladding did not meet the heightened fire standards that had come into force after the works had been completed.
Martlet Homes Limited v Mulalley & Co Limited [2022] EWHC 1813 (TCC), 14 July 2022

Commercial Rent – Coronavirus
A tenant of retail premises selling jewellery and watches that were closed during the pandemic brought a claim for protected rent debt status for rent arrears arising out of the offices occupied by its administrative staff. The claim arose under the Commercial Rent (Coronavirus) Act 2022, which provided relief from payment for certain business tenancies. The arbitrator refused the claim and held that the business carried on by the tenant was not subject to a closure requirement during the pandemic. In fact the tenant had continued to use the premises with a much reduced staff. The premises were not adversely affected by coronavirus for the purpose of section 4 of the Act and there was no ‘protected rent debt’.
Signet Trading Ltd v Fprop Offices (Nominee) 4 Ltd and another, 5 July 2022

Apparent Bias
The Court of Appeal has granted permission to reopen an application for permission to appeal a judgment because of apparent bias by the judge. The judge gave permission to appeal the judgment that arose out of breach of an investment management agreement, but it was conditional on a pending Supreme Court judgment. After hand down, the judge reversed the permission without holding an oral hearing and then refused applications to reopen that decision or recuse himself. The judge had been in error when not asking for full submissions on the second permission decision, which was compounded by his failure to extend time to challenge that decision. A fair-minded observer would have taken the view that the judge was taking an unorthodox hard line and that there was apparent bias. The judge should have recused himself.
UCP Plc v Nectrus Limited [2022] EWCA Civ 949, 11 July 2022

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: