The case concerned the build of a 73m superyacht under the project name ‘Project Nato’. In February 2013, Justice Walker, presiding over hearing at London’s Commercial Court, ordered a stay of the court proceedings pending the resolution of matters referred to arbitration.
The findings centered on MYT’s repeated failure to comply with the arbitral tribunal’s orders to provide security of costs, MYT having given little explanation as to its reasoning for not complying with them other than a suggestion that the orders would have a ‘stifling effect’ on its financial position. Following MYT’s repeated non-compliance, the arbitrators moved, on application from Swallowfalls, to dismiss MYT’s claim in the arbitration. The tribunal did, however, state that it had ‘not made any determination on the merits of [MYT’s] claim or counterclaim’.
In light of the arbitral tribunal’s dismissal of the matter, Swallowfalls then moved to have the stay of the Commercial Court proceedings lifted as a result of the ‘enduring non-compliance’ by MYT in the arbitration and it further applied for summary judgment.
Justice Knowles presided over the hearing at the Commercial Court and ultimately found in favour of Swallowfalls. The judge concluded that the outcome of the arbitration was a dismissal of MYT’s claims and it would be ‘a clear case of abuse’ of process if the court were to hear MYT’s counterclaim arguments. The judge held that the principal sum of the loan already lent to MYT was suitable for summary judgment and the judge ordered this amount, €13,808,007.04, to be repaid to Swallowfalls.
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