Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corporation Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ROSKILL |
| Judgment Date | 23 November 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J1123-2 |
| Date | 23 November 1979 |
| Court | Court of Appeal (Civil Division) |
[1979] EWCA Civ J1123-2
The Master of the Rolls (Lord Denning)
Lord Justice Roskill and
Lord Justice Cumming-Bruce
In The Supreme Court of Judicature
Court of Appeal
On Appeal from The High Court of Justice
Queen's Bench Division
(Mr. Justice Donaldson)
MR. M. WALLER, Q.C. and MR. J. CHICHESTER (instructed by Messrs. Herbert Smith & Co.) appeared on behalf of the Plaintiffs (Respondents).
MR. M. SAVILLE, Q.C. and MR. J. VIEDER (instructed by Messrs. Lovell White & King) appeared on behalf of the Defendants (Appellants).
MR. ROKISON, Q.C. and MR. D. GRACE (instructed by Messrs. Norton, Rose, Botterell & Roche) appeared on behalf of the Plaintiffs (Respondents).
MR. G. BUTLER, Q.C. and MR. G. CALDIN (instructed by Messrs. Richards Butler & Co.) appeared on behalf of the Defendants (Appellants).
When I was young, a sandwich-man wearing a top-hat used to parade outside these courts with his boards back and front, proclaiming "Arbitrate, don't litigate". It was very good advice so long as arbitrations were conducted speedily: as many still are in the City of London. But it is not so good when arbitrations drag on for ever.
These cases mark a new development in the law of arbitrations. Parallel to the development 11 years ago when we started to strike out actions at law for want of prosecution. That development has had some beneficial results. It has taught practitioners that they must observe the time schedules provided by the Rules of Court. They must enter in their diaries the latest dates "by which writs must be issued and served, pleadings delivered, discovery made, and cases set down for trial. They must keep those dates or get them extended by consent: else they may find themselves in serious trouble. The consequences have, I believe, been beneficial. Many actions are started as "try-ons". The plaintiff's claim is weak, but it is hoped that the defendants will pay up or settle. Where the try-on is unsuccessful - and the defendants resist it - the plaintiff or his advisers lose heart. Sooner or later they let things slide. At length the defendant applies to dismiss it for want of prosecution. The plaintiff's advisers then take fright - lest they be held responsible. But the court is adamant. The action is struck out. Other actions are much more genuine. The claim is well-founded, but the plaintiff's advisers become busy with other things. They put this case on one side until they have more time to deal with it. Before long they forget about it altogether. This may be their own fault: or it may be the fault of the plaintiff himself for not reminding them: or for not doing what the advisers ask of him. But whatever it is, the time may come when the delay is so inordinate and so inexcusable that a fair trial is impossible.In that case too the court is strict. It strikes the action out. Not for want of sympathy with the plaintiff: but out of justice to the defendant. During the lapse of time, witnesses will have died, memories will have faded, documents will have been lost - all of which might have served him to defend himself against the plaintiff. It is not fair to the defendant to make him fight a case with his hands tied behind his back. So here too the plaintiff or his advisers have to take the consequences. The action is struck out for want of prosecution.
Now in the year 1979 we are invited to make a like development in regard to arbitrations. Three recent cases now show that, in arbitrations, as well as in courts of law, cases may last "so long as to turn justice sour". They show, too, that an arbitrator has far less power than a judge. If the parties drag their feet, the arbitrator can do nothing to quicken them up. He cannot dismiss a claim for want of prosecution. He cannot strike out a dilatory plea which is put in just to gain time. He must abide the pleasure of the parties. He has no sanctions with which to enforce his orders. Seeing that he can do nothing, the question is: Can these courts do anything about it?
Just see what has happened in these three cases. In the first case it is thirteen years since five big bulk carriers were built and delivered to the owners. They have sailed the oceans ever since earning money for their owners. The owners now make claims for damages against the builders. Starting modestly, the claims now come to a large figure. It is so large that you could buy two of the five ships with it. They say that the five ships were badly designed and badly built those thirteen years ago. Most of the engineers who worked on them have died or retired. The arbitration was not started for over five years. The parties appointed Sir Gordon Willmer, who had recently retired from this court. They could not havepicked anyone better. But that was nearly eight years ago, when he was 72. The parties have not been near him since. He is now 80. The arbitration has only got so far as points of claim. They cover 137 pages of foolscap with masses of detail. They go into all the alleged defects of 13 years ago and the damage said to result from them in the succeeding years. If the arbitration is to proceed, it will need several years more to prepare for the hearing. The arbitrator will have died, or got past it. A new arbitrator will have to be appointed. A fair trial is quite impossible. Much of the delay is due to the claimants. They went to sleep - off and on - for months at a time. Not even a snore was heard. Time and again they said they were just about to deliver full points of claim. Eventually after a whole year - without a word - they delivered those portentous points of claim. The judge has held that their delay was inordinate and, inexcusable, and that the builders had suffered serious prejudice from it. Is the arbitration to be allowed to go on?
In the second case it is nine years since some shareholders called Gregg in a publishing company sold their holding to purchasers called Raytheon. The Greggs gave several assurances to Raytheon about the amount of business being done by the publishing company. The transaction was completed in 1970 those nine years ago when Raytheon took over the business. A few months later Raytheon complained that the business was not what it was represented to be. They claimed £500,000 as damages. The matter was referred to arbitration in accordance with the rules of the International Chamber of Commerce: but by agreement the arbitration was to be held in London. Over six years ago, in 1973, three arbitrators were appointed, all very suitable, Mr. Desmond Miller, Q.C., Mr. Michael Must ill, Q.C, andMr. I.A.H. Davison. Those arbitrators ordered pleadings and discovery. Over the years pleadings were delivered, but discovery was never complete. Time and time again the arbitrators fixed dates for hearing, but time and time again these were abandoned. The reason every time was because Raytheon had not given proper discovery. It was a case where full discovery was essential. Raytheon had bought the shares and were in control of the publishing company. They would have all the papers showing what business the publishing company did before and after the deal, showing whether the assurances were broken or not, and if so, what the damages were. They promised many a time to get the documents from the U.S.A. Eventually, in July 1975, over four years ago, the three arbitrators adjourned the case generally with liberty to either party to restore. It never has been restored. The claimant Raytheon went silent for three whole years. When they bestirred themselves, two of the arbitrators had gone off and put on new suits. Mr. Desmond Miller, Q.C. had left the bar and become a man of business. Mr. Michael Mustill, Q.C. had become a judge of the High Court. So it looks as if one or two new arbitrators will have to be appointed. It was only last November, 1978, after three years of silence, that Raytheon's solicitor wrote offering inspection of thousands of documents. It will take a long time before these can be analysed and the case ready to be heard. And then much will depend on oral conversations ten years before when the shares were sold. The judge held that the delay of Raytheon's was inordinate and inexcusable and that the prejudice to Greggs would be most serious. Is the arbitration to be allowed to go on?
The third case is not before us, but it is so pertinentthat I would mention it. In 1969, ten years ago, the "Splendid Sun" carried 10,400 tons of maize from Mexico to Venezuela. On arriving at the discharging port, she grounded and suffered damage in over $200,000. The owners claimed damages from the charterers for not nominating a safe port. In that same year, 1969, two experienced commercial arbitrators in the City of London were appointed, Mr. Cedric Barclay for the owners and Mr. Lynn for the charterers. Nothing happened for eight whole Mrs. Then on the 3rd January, 1978 the owners delivered points of claim. By this time Mr. Lynn had died, though Mr. Barclay is still going strong. Mr. Justice Lloyd has held that the delay has been such as to frustrate the arbitration agreement. Is the arbitration to be allowed to go on? The case was decided by Mr. Justice Lloyd on the 4th May, 1979.
We had a good deal of discussion about the facts in our two cases: especially as to whether there had been acquiescence by one party in the delay of the other. All I need say on this is that, so far as our court cases are concerned, even when there has been acquiescence up to a point, nevertheless if the claimant is thereafter guilty of further delay, he does so at his peril: because on an application to dismiss for want of prosecution, the...
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