Antaios Compania Naviera S.A. v Salen Rederierna A.B.
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ACKNER,LORD JUSTICE FOX |
| Judgment Date | 08 July 1983 |
| Judgment citation (vLex) | [1983] EWCA Civ J0708-1 |
| Docket Number | 83/0311 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 July 1983 |
[1983] EWCA Civ J0708-1
The Master of the Rolls
(Sir John Donaldson)
Lord Justice Ackner
and
Lord Justice Fox
83/0311
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
(MR. JUSTICE STAUGHTON)
Royal Courts of Justice.
MR. A.G.S. POLLOCK, Q.C. and MR. A. GLENNIE (instructed by Messrs. Vincent, Stokes, French & Browne) appeared on behalf of the Appellants.
MR. M.O. SAVILLE, Q.C. and MR. B. EDER (instructed by Messrs. Richards Butler & Co.) appeared on behalf of the Respondents.
The appellants, the owners of the "Antaios", applied to the Commercial Court under section 1(3)(b) of the Arbitration Act 1979 for leave to appeal to the High Court against an arbitration award dated the 9th July, 1982. The application was heard and refused by Mr. Justice Staughton. Normally that would have been the end of the matter, because section 6A of the Arbitration Act 1979 bars any appeal to the Court of Appeal from the grant or refusal of leave to appeal to the High Court, unless the High Court itself gives leave authorising such an appeal. However in this case Mr. Justice Staughton gave leave to appeal to this court and also invited us to consider whether he should have done so.
The background
Before considering that question and the substance of the appeal, I should set the scene briefly. At all material times the vessel was under time charter to the respondents on the New York Produce Exchange form, which provides for disputes to be referred to three arbitrators. The arbitrators in this case were Mr. Anthony Diamond, Q.C., Mr. Bruce Harris and Mr. John Potter, all of whom are very experienced in this field. A major issue in the arbitration concerned the right of the owners to withdraw the vessel from the charterered service upon discovery that the charterers had issued bills of lading which were "inaccurate", to use a neutral word. This turned upon whether clause 5 of the charter entitled the owners to withdraw the vessel in the event of any breach of the charterparty on the part of the charterers or only in the event of a repudiatory or some other restricted category of breach.
The arbitrators held that the breach by these charterers was non-repudiatory and that the clause, properly construed, gave a right of withdrawal only in the case of a repudiatory breach. They further held that even if they were wrong in this and the owners had acquired a right of withdrawal, it had to be exercised within a reasonable time and that the owners had lost that right by delaying far beyond a reasonable time before purporting to exercise it. The arbitrators held that in all the circumstances of the case, including in particular the fact that the owners had long suspected that the charterers were in breach of the charterparty, a reasonable time would have expired on the 9th May, i.e. 48 hours after the owners acquired firm knowledge of the breach, whereas the owners gave notice of withdrawal on the 20th May.
Mr. Justice Staughton said that if the only issue had been the true construction of clause 5, he would have granted leave to appeal to the High Court because the arbitrators had disagreed with a dictum of Mr. Justice Neill and also with a dictum of Mr. Justice Kerr which itself conflicted with the view expressed by Mr. Justice Neill. In this I think that he was right. There is a public interest in the construction of clause 5 and some measure of uncertainty as to what is the true answer. It thus falls within the category of case considered by Lord Diplock in The Nema (1982) Appeal Cases 724 at page 743 D-G. In saying that I think Mr. Justice Staughton was right, I am, of course, construing Lord Diplock's speech at F as if it had read, "But leave should not be given even in such a case unless the judge considered that a strong prima facie case had been made out that the arbitrator might well have been wrong in his construction" rather than "the arbitrator had been wrong in his construction". I think that this must have been his intention as otherwise where there are known to be differences of judicial opinion on a matter such as this, whether leave to appeal was granted or refused would depend upon the accident of whether the judge hearing the application did or did not take the same view as the particular arbitrator. This cannot have been the intention of Parliament. If I am wrong in so construing Lord Diplock's speech, then I think that this is one of those cases in which it is permissible to remind oneself that the speeches in The Nema were intended to provide guidelines rather than to remove the discretion granted to the judge hearing the application and that guidelines by definition permit of exceptions, albeit great care must be exercised to ensure that the exceptions do not become so numerous as to blur the edges of the guidelines or even render them invisible.
However, despite his willingness to grant leave on the basis of the clause 5 issue, Mr. Justice Staughton refused leave to appeal to the High Court because he considered that issue to be immaterial, and thus incapable of affecting the rights of the parties substantially or at all (see section 1(4) of the 1979 Act), unless the arbitrators were wrong in their view that the owners had, by their own inactivity, lost any right of withdrawal. On this latter issue he was of the opinion that the arbitrators were probably right and it would follow, applying The Nema guidelines, that leave to appeal to the High Court should be refused.
There was also a subsidiary point on the charterers' counterclaim, the owners complaining that there was some logical inconsistency between two parts of the award. So far as this was concerned Mr. Justice Staughton considered that the owners were plainly wrong.
Section 6A of the 1979 Act—leave to appeal to the Court of Appeal
I now return to the reason why leave to appeal to this court was given by Mr. Justice Staughton and I cannot do better than quote from his judgment. After adverting to section 6A of the Arbitration Act 1979 he said:
"Parliament thus contemplated that in at any rate some cases it would be right for a judge at first instance to grant leave to appeal to the Court of Appeal against his own decision either granting leave to appeal from an arbitration award or refusing leave to appeal from an arbitration award. There have been discussed in argument three classes of case in which this problem might arise. Class 1 is cases like The Kerman, where Mr. Justice Parker laid down guidelines as to the granting of leave under the Arbitration Act, or perhaps it may be said laid down a practical interpretation of the guidelines earlier laid down in The Nema. It is not disputed that in such a class of case it would be right for this court to give leave to appeal to the Court of Appeal so that the guidelines may be either approved or varied and have the authority of that court. The second class of case is where the judge at first instance has decided the matter for one reason or another as one of discretion. In such a case Mr. Young submits, and I would agree, that it is not right to give leave to appeal to the Court of Appeal. The third class of case is more difficult. That is where the issue raised by the arbitration award is a genuine arguable point of law, but one upon which the judge at first instance has concluded that the arbitrators, so far from being probably wrong as they must be shown to be if leave is given in accordance with The Nema guidelines, are, on the contrary, probably right. If a judge at first instance comes to the conclusion on such a substantial and arguable point of law that the arbitrators are probably right, should he nevertheless give leave to appeal to the Court of Appeal? Most judges at first instance are occasionally wrong, and I certainly count myself among that number, and am the first to recognise that, although I may think that the arbitrators were probably right, the Court of Appeal might take the view that they were probably wrong, and that therefore leave should be given in accordance with The Nema guidelines.
"Nevertheless it seems to me that the policy of the Arbitration Act will not be best served if leave is given in such circumstances. The judge at first instance must make up his mind; and if he concludes, even on a substantial and arguable point of law, that the arbitrators are probably right, then he must say so and must refuse leave to go to the Court of Appeal.
"That would be my conclusion but for this point. In expressing that view I have in effect laid down, or attempted to lay down, a principle which would benefit by being considered, and if right adopted, by the Court of Appeal. It would be very much to the advantage of the commercial community, as it seems to me, that the Court of Appeal should consider this very point, and if I were to refuse leave they would have no opportunity of doing so. In effect this case has now become one in the first class like The Kerman where I have stated what seems to me to be a principle, and the Court of Appeal ought to consider that principle. So I conclude that in general it is not right for a judge at first instance to grant leave to appeal under the new section 6A in a case where the arbitrators' decision raises a substantial and arguable point of law but the judge considers that the arbitrators were probably right upon it. I say 'in general', but in this particular case I consider it right to grant leave to appeal in order that that conclusion can itself be considered by the Court of Appeal."
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