Azov Shipping Company v Baltic Shipping Company [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Rix J. |
| Judgment Date | 08 May 1998 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 08 May 1998 |
Queen's Bench Division (Commercial Court).
Rix J.
Vernon Flynn (instructed by Shaw & Croft) for Azov Shipping Co.
Christopher Smith (instructed by More Fisher Brown) for Baltic Shipping Co.
Arbitration — Applicant applied to court challenging arbitrator's decision that he had jurisdiction in court — Whether oral evidence and cross-examination should be permitted on application — RSC, O. 73, r. 14 — Arbitration Act 1996, s. 67.
This was an application for there to be oral evidence and cross-examination on an application under s. 67 of the Arbitration Act 1996 challenging the arbitrator's decision that he had jurisdiction.
Baltic Shipping Co had commenced an arbitration against Azov Shipping Co in reliance on an arbitration clause in an agreement entered into by former Soviet shipping companies to deal with the question of their containers after the splitting up of the former Soviet Union. Azov denied that it was a party to that agreement but the question of jurisdiction was considered by the arbitrator under s. 30 of the Arbitration Act 1996 with Azov reserving its position on his jurisdiction. The arbitrator found that Azov was a party to the agreement and that he did therefore have jurisdiction. To come to that conclusion, about which he conceded that he had some uncertainty, the arbitrator considered questions of fact and foreign law and witnesses of fact and expert witnesses gave evidence and were cross-examined. Azov challenged the arbitrator's decision under s. 67 of the 1996 Act and sought directions for there to be oral evidence and cross-examination on the issue. Baltic argued that it would not be just, expeditious or economical under RSC, O. 73, r. 14 to permit an effective rehearing of the jurisdiction issue.
Held acceding to Azov's application:
Although there might be some prejudice to the expeditious and economical disposal of the application by permitting oral evidence, the justice of the matter required the court to accede to Azov's application that oral evidence should be permitted on the s. 67 application. The parties might have come to court by agreement under s. 32 of the 1996 Act, or if the arbitral tribunal had given its permission, because the issue was not simply the width of the arbitration clause (on which the arbitrator's decision might have been accepted) but whether Azov was party to the agreement. However the court, on a challenge under s. 67, should not be placed in a worse position than the arbitrator for the purpose of determining that challenge even if there had already been a full hearing before arbitrators since there were substantial issues of fact as to whether Azov was party to the agreement. The court was not required to review the challenge to the arbitrator's award through the eyes of the arbitrator or on his findings of fact. Baltic could not be secured for the costs of the hearing below but could make an application for security for the costs arising on the s. 67 hearing.
Rix J: This is an interesting question under the Arbitration Act 1996. An arbitration has been commenced by Baltic Shipping Co against Azov Shipping. Both those companies were shipping companies in the USSR. As a result of the splitting up of that union disputes have occurred and an agreement was entered into by a number of former soviet shipping companies to deal with the question of their...
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