On 9 August a decision came down from the High Court of England and Wales that imparts an important lesson about limitation periods and related timelines for the service of proceedings. The decision also reveals useful information about a particular dispute over allegedly fake antiquities, showing just what happens when negotiations between buyer and seller deteriorate, sometimes beyond repair.
At the centre of the disagreement and subsequent litigation was a marble bust of the head of Alexander the Great depicted as Heracles. It was sold on 24 January 2014 for $3 million by Phoenix Ancient Art (Phoenix), a company based in Switzerland, to an outfit owned and operated by Sheikh Hamad Bin Abdullah Al Thani, a member of Qatar’s royal family. At the time of the sale the artefact was thought to be an antiquity, dating from the 3rd to the 1st century BCE. At some later point, the buyer became suspicious that the artefact was instead of a more modern vintage and thus a fake. But the seller stuck to the original attribution.
Discussions ensued. During this time a potential compromise was floated whereby the buyer would return the bust (and another piece, also thought to be a fake) in exchange for six other antiquities owned by the seller. But it was not to be. Five of those six pieces were in the US and, on their attempted export, were seized by US Customs for an apparent violation of American import/export rules. This rather alarming development was only referred to in passing by the English court. Perhaps we will learn more about it from other sources in due course, but it may well have been related to this seizure by the New York D.A.’s office in 2018.
It is worth mentioning that Phoenix Ancient Art has had its problems in the past with law enforcement relating to its dealing in allegedly looted artefacts. The Aboutaam brothers behind the company have been prosecuted in Egypt and in the US. One of them, Hicham, was convicted in New York in 2004 for falsely representing an antiquity to a buyer, while the other, Ali, was subjected to a major seizure of 11,000 items by Swiss authorities in 2017 (5,000 of these were eventually returned to him).
In the matter at hand, due to the US setback, it seemed no immediate compromise between the parties was possible. The limitation period in England for filing a claim over the sale was six years, and was due to expire on 24 January 2020. With this in mind, the Qatari buyer issued proceedings against Phoenix two days prior to that date, getting the claim in just under the wire. But this wasn’t the end of the matter, since issuing a claim with the court is one thing, serving it on the defendant quite another.
In England, the Civil Procedure Rules (CPR) allow four months to serve a defendant within the jurisdiction. But if, as here, the defendant is based abroad then the period is extended to six months. This gave the claimant until 22 July. The problem in this case was that after issuing the claim form on 22 January, there was a significant lapse when the buyer (or the buyer’s solicitors) didn’t take any outward action on the matter until early May. Then came an attempt to serve proceedings on Phoenix’s English solicitors, which went ignored, rendering such service ineffectual.
In June, the claimant sought to arrange foreign service by contacting the Foreign Process Section (FPS) of the Royal Courts of Justice in London (right). But the FPS was closed due to the coronavirus pandemic, only to reopen at the end of July. By that time, the claimant obtained an ex parte court order allowing an extension of time for service. The FPS approved documents for service, which were then served on Phoenix in Switzerland on 8 September. Less than a week later, Phoenix applied to the English court for an order setting aside the extension of time. The Master agreed to set aside his earlier order, which meant that service in Switzerland on 8 September was outside the required period by well over a month, thus barring the claimant’s substantive claim. The claimant appealed this decision.
On 9 August Mr Justice William Davis of the High Court agreed that the extension should not have been granted, thus denying any chance for the claim to proceed. The rules of the CPR around service of claim and extension of the time limit were examined (rules 7.5 and 7.6 CPR), much as they had been by the Master beforehand. The judge found that the principal reason for belated service was the apparent delay between January and May 2020 when the claimant appeared to do nothing or very little to investigate the appropriate procedure for foreign service. No blame could be placed on the coronavirus pandemic, despite the fact that the FPS had been closed from April to July of that year. The explanation for the delay offered by the claimant – namely that negotiations had still been taking place (or could have been) between the parties – was found to be unsupported by the evidence before the court. As a result, the situation was not exceptional enough to warrant a time extension.
If anything, this case demonstrates how rigid the rules around limitation periods and service of proceedings truly are. The existence of negotiations between the parties is insufficient in itself to extend any limitation period. Here proceedings were issued on time, two days before the limitation period expired, but there remained the thorny matter of out-of-jurisdiction service. The six-month clock began ticking on 22 January and, according to the court, the urgency of the situation had not been appreciated by the claimant or their solicitors until much too late.
It does seem a harsh outcome: foreclosing an entire claim for what many would call a technicality. In addition, the relevant period overlapped with the beginning of the coronavirus pandemic and the country entering into an unprecedented lockdown (note the closure of the FPS). Yes, there may have been a delay early on in the service period. But afterwards all hands were on deck to try and ensure that timely service could indeed take place. Since it did not, the claimant lost its ‘day in court’ – subject of course to any appeal of this decision.
Time limits in law are strict, and exceptions notably rare. If anything this case demonstrates that papers need to be ready well in advance, even if (as here) the parties appear to be negotiating. Few relish going to court. But when negotiations fail – and fail they often do – the only thing a claimant may have in its pocket is the ability to issue proceedings as a threat, and hopefully one that can force the other party back to the table.
Unfortunately for the claimant here, the High Court loss means such a threat has now dissipated. It is therefore questionable if Phoenix will ever want to re-engage in discussions over the Alexander the Great head. For whatever carrot might still exist, there appears to be very little stick left.