Nefelia Shipping v Mosaic Fertilizantes: Extension of time for service upheld despite procedural difficulties

In Nefelia Shipping SA & Anor v Mosaic Fertilizantes Do Brazil Ltda & Anor [2025] EWHC 2941 (Comm), the High Court considered whether to set aside an extension of time for service of a claim form where multiple rejections by the Foreign Process Section and Brazilian authorities had caused significant delays.

The claim concerned general average contributions totalling US$892,381.46 following the grounding of the M/V "KONA TRADER" at Paranagua in March 2018. The claimant shipowners issued proceedings in September 2023 against Brazilian cargo owners and their insurers, both of whom had contractually agreed to the exclusive jurisdiction of the English courts.

Procedural complications

The claimants initially obtained a nine-month extension to serve the claim form, expecting service to take up to 12 months based on Foreign Process Section guidance. However, documents submitted for service under the Hague Convention were rejected twice by the FPS—first in March 2024 and again in July 2024—due to various technical deficiencies. After the FPS finally accepted the documents in October 2024, the Brazilian central authority subsequently rejected them for want of additional Portuguese translations.

A second extension was granted without notice in November 2024, extending validity until November 2025. The defendants applied to set aside this extension, arguing insufficient justification existed and the claimants had failed in their duty of full and frank disclosure.

The court's analysis

Nigel Cooper KC, sitting as a Deputy High Court Judge, systematically examined five distinct periods of delay. Applying the principles from Hashtroodi v Hancock and ST v BAI (SA) (trading as Brittany Ferries), he considered whether the claimants had established good reasons for failing to serve within the initial validity period.

The court found that whilst certain periods exhibited less than optimal urgency—particularly a two-week delay in collecting rejected documents—the evidence did not establish negligence or incompetence. Crucially, many of the FPS's grounds for rejection concerned requirements not apparent from guidance reasonably available to the claimants' solicitors at the relevant time. The FPS itself subsequently confirmed that certain Brazilian requirements "were not mentioned in any format to the Foreign Process Section prior to the documentation going out for service".

The court adopted a "calibrated approach" in assessing the strength of reasons for delay. Whilst acknowledging the explanations "may not lie at the better end of good reasons", it concluded there were sufficient reasons to justify the extension.

Full and frank disclosure

The defendants contended the claimants had breached their duty on a without notice application by failing to emphasise the potential limitation defence and omitting reference to the Brittany Ferries principles. The court accepted it would have been preferable to highlight these matters more prominently but found any breaches were minor and did not justify setting aside the order.

The court noted that the limitation issue had been raised in earlier evidence included in the application bundle, and an experienced Commercial Court judge would have been aware of the applicable legal test.

Significance

The judgement provides helpful guidance on the court's approach to extensions of time where service difficulties arise from unclear or evolving administrative requirements, particularly when serving in foreign jurisdictions under the Hague Convention. The decision confirms that whilst solicitors must exercise reasonable diligence, they will not be penalised for errors arising from guidance that was inadequate, unavailable, or contradictory at the material time.

The defendants' application was dismissed, with the extension order upheld.

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