Antco Shipping Ltd v Seabridge Shipping Ltd (Furness Bridge)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE GEOFFREY LANE |
| Judgment Date | 23 March 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J0323-1 |
| Docket Number | 1979 S. No.132 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 March 1979 |
[1979] EWCA Civ J0323-1
In The Supreme Court of Judicature
Court of Appeal
On Appeal from The High Court of Justice
Queen's Bench Division
Commercial Court
(Mr. Justice Donaldson)
The Master of The Rolls
(Lord Denning)
Lord Justice Lawton and
Lord Justice Geoffrey Lane
MR. D. JOHNSON, Q. C. and MR. B. EDER (instructed by Messrs. Holman Penwick & Willan) appeared on behalf of the Plaintiffs (Appellants).
MR. J. HOBHOUSE, Q. C. and MR. N. LEGH-JONES (instructed, by Messrs. Norton Rose Botterell & Roche) appeared on behalf of the Defendants (Respondents).
THE MASTER OF TEH ROLLS: On 9th October, 1973 a charterparty was arranged between owners and charterers. It was to be a single voyage charter for the carriage of oil to the Caribbean. The owners were to nominate a ship to perform the carriage. The charterers contemplated loading the oil in Libya, but in the charterparty the agreed loading ports were expressed to be "European Mediterranean and Libya". The shipowners nominated a vessel, the "Furness Bridge" - a huge vessel carrying 154, 000 tons - to take the oil in accordance with the charterparty. But war broke out between Israel and the Arabs. Libya imposed an embargo on the export of oil from Libya to the Caribbean. The charterers did not accept the nomination of the vessel. The owners said that the charterers had repudiated the contract. The charterers relied upon the clause about the restraint of princes. The issue went to arbitration on the question of liability.
It was an Exxonvoy charter which contained a clause for London arbitration. After a long hearing, the arbitrators found that the charterers were wrong in repudiating because they were not bound to ship oil from Libya. There was the possibility that they might have obtained oil from some other port in the Mediterranean and so fulfilled their charter. The case is reported in (1977) 2 Lloyd's Law Reports 367.
There remained the issue of damages. The freight payable under the charter was fixed in October 1973 before the War, when rates were. high. When the charterers repudiated the charterparty, the owners chartered the vessel to the big Bunge world-wide organisation. She was sent over to the Mississippi to fetch grain from there. There was much trouble with the contract with Bunge. When the vessel arrived at the Mississippi, she was of such great length that they had trouble getting to the loading berth. All sorts of troubles arose. That led to anotherarbitration and a great deal of discussion. I will not go into details, cut that had to be decided before damages could be assessed under the original charterparty.
Eventually the question fell to be decided: What damages were the owners entitled to as a result of the original repudiation by the charterers? The measure would be this:-
First: Calculate the amount of freight which the owners would have received if the charterparty had been fulfilled by carrying the oil from a Mediterranean port (other than Libya) to the Caribbean.
Second: Calculate the credit which the owners should give in one of two ways: Either (i) by the actual amount which the owners made by putting the vessel to profitable use with the Bunge organisations or (ii) by taking the market rate of freight which the owners could have made by letting the vessel out on the market.
The arbitrators heard all the evidence in the matter. When it came to the award, the charterers asked that it he stated in the form of a Special Case so that the point of law could be resolved as to whether it was the market rate or the actual amount in mitigation of damages.
That point of law, however, only involved $70,000. The amount of damages was bound to be large anyway. If the owners succeeded on the point of law, the figure would be $499,400. If the owners failed on the point of law, the figure would be $391,958.59. So the point of law involved a difference of only $70,000. The charterers were in any case liable for $391,958.59, plus interest, and so forth, making a total of $475,000.
Summarising it quite shortly, the amount involved in the point of law is $70,000. If the charterers are right in this point of law, they save $70,000. If they are wrong, they will have to pay the $70,000 extra. In any event, in the opinion ofthe arbitrators, the Charterers were liable in any case to $475,000.
Now I come to the point. The charterers wanted the case to be stated on the point of law which I have mentioned - that only $70,000 was in dispute. But the arbitrators said that in any event they should pay the amount they found inevitably to be due, the sum of $475,000. The charterers did not agree to that. The arbitrators said they would state a special case, on condition that 475,000 was paid. I will read the order they made at the conclusion of the arbitration hearing on 19th December, 1978:
"The Tribunal will proceed to an award unless one of two things happen by January 10, 1979:
(i) The Respondents issue a Summons asking The Commercial Court to overrule the Tribunals decision and order that the Award be stated in the form of a Special Case;
(ii) The Respondents pay into a joint account the sum of $475,000, in which case (a) the Award will be stated in the form of a Special Case, and (b) the Claimants and Respondents to supply the Tribunal with the question of law on which the Award is to be stated by not later than ten days after the payment into the joint account of $475,000".
In other words, they would state a case if the charterers would pay $475,000 into a joint account. Otherwise they would not state a case: they would make their award without stating a case at all.
The point was taken before Mr. Justice Donaldson. It was submitted that the tribunal had no power to make it a condition of a special case that that $475,000 should be paid into a joint account. Mr. Justice Donaldson, after hearing the arguments on both sides, held that he did have a discretion. He ordered that the arbitrators state a case on the questions set out in the summons: provided the respondents paid the sum of $475,000 into ajoint account in the names of the solicitors to the parties within fourteen days.
Now there is an appeal to this court. Mr. Johnson has urged before us that there is no jurisdiction in arbitrators to make such a conditional order. It was suggested that when the appeal came before Mr. Justice Donaldson he might have said that the arbitrators should have made an interim award for the sum of $475,000. Mr Johnson would not commit himself as to whether that was possible. He said that it does not arise now in the circumstances. I would like to say in passing that it seems to me that the power under the Arbitration Act 1950 is wide enough to include an interim award of the amount which the arbitrators found to be inevitably duo in any case.
But. that is by the way. That does not really arise in this case. The whole question is whether arbitrators can state an award in the form of a special case and attach a condition for payment. That depends on the sections of the Arbitration Act. There are only two in question. Section 21(1) of the Arbitration Act, 1950, provides: "An arbitrator or umpire may, and shall if so directed by the High Court, state - (a) any question of law arising In the course of the reference" - that is not this case -"or (b) an award or any part of an award, in the form of a special case for the decision of the High Court" The important word to notice there is "may". The word "may" gives a discretion. Even if no further words had been said, it seems to me that those words give the arbitrators power to make any term or condition which in their discretion is proper when stating a case.
But one need not stop at that. Section 28 provides: "Any order made under this Bart of this Act may. be made on such terms as to costs or otherwise as the authority making the order thinks just". It seems to me that that, coupled with Section 21, doesgive power to impose conditions on the stating of a case.
On the wording of the Sections, it seems to me that the jurisdiction is there. But, Mr. Johnson said that the discretion which had been given by those sections had been limited by the decision of this court in the " Lysland", Halfden Grieg & Co. A/S v. Stirling Coal & Navigation Corp. (1973) 1 Queen's Bench 843, where this court endeavoured to set out guidelines as to the circumstances in which arbitrators should state a special case. But I would like to say at once that those guidelines do not apply here. We did not have in mind at all a case such as the present, where the arbitrators find that a. certain sum is undoubtedly and indisputably due.
There are some observations of Brandon J. which help much. It was in The "Golden Trader" (1975) I Queen's Bench 348. A ship had been arrested for a debt. The question was whether that ship should be released pending an arbitration, and whether it could be released on the condition that security should be given for the amount of the debt due. It was a case of an international arbitration where the granting of a. stay was mandatory. On that account Brandon J. held that the vessel had to be released. He dealt with cases where the granting of a stay is discretionary. He said at page 360: "In eases where the grant of a stay is discretionary, the court can refuse a stay unless alternative security is provided. The defendant then has to choose between having a stay subject to a term for the provision of such security, and not having a stay at all". Likewise, where the stating of a case is discretionary, it seems to me that the party may have to choose between having a case stated on condition that he pays a sum into a joint account or into court - or having no case stated at...
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