Charles M Willie & Company (Shipping) Ltd v Ocean Laser Shipping Ltd ('The Smaro') [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Rix J. |
| Judgment Date | 29 October 1998 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 29 October 1998 |
Queen's Bench Division (Commercial Court).
Rix J.
Michael Nolan (instructed by Swinnerton Ashley-Claydon) for Charles M Willie & Co (Shipping) Ltd.
Steven Berry (instructed by Holman Fenwick & Willan) for Ocean Laser Shipping Co.
The following cases were referred to in the judgment:
Baytur SA v Finagro Holding SAELR [1992] QB 610
Biakh (Bill) K/S A/S v Hyundai CorpUNK [1988] 1 Ll Rep 187
Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping CorpELR [1981] AC 909
Cargill Srl Milan v P Kadinopoulos SAUNK [1992] 1 Ll Rep 1
Cremer (Peter) GmbH & Co v Sugat Food Industries Ltd (“The Rimon”)UNK [1981] 2 Ll Rep 640
Damon Compania Naviera SA v Hapag-Lloyd International SA (“The Blankenstein”)WLR [1985] 1 WLR 435
Delta Vale Properties Ltd v MillsWLR [1990] 1 WLR 445
Exmar BV v National Iranian Tanker Co (“The Trade Fortitude”)UNK [1992] 1 Ll Rep 169
Fidelitas Shipping Co Ltd v V/O ExportchlebELR [1966] 1 QB 630
Lazenby (James) & Co v McNicholas Construction Co LtdWLR [1995] 1 WLR 615
London Steamship Owners Mutual Insurance Association Ltd v Bombay Trading Co Ltd (“The Felicie”)UNK [1990] 2 Ll Rep 21
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] CLC 1124; [1997] AC 749
Montedipe SpA v JTP-RO Jugotanker (“The Jordan Nicolov”)UNK [1990] 2 Ll Rep 11
Nea Agrex SA v Baltic Shipping Co LtdELR [1976] QB 933
Nema, TheELR [1982] AC 724
Sargasso, TheUNK [1994] 3 All ER 180
Sennar, The (No. 2)WLR [1985] 1 WLR 490
Sethia Lines (SL) Ltd v Naviagro Maritime Corp (“The Kostas Melas”)UNK [1981] 1 Ll Rep 18
Smith v ShannELR [1898] 2 QB 347
Surrendra Overseas Ltd v Government of Sri LankaWLR [1977] 1 WLR 565
Swiss Bank Corp v Novorossiysk Shipping Co (“The Petr Schmidt”) [1995] CLC 62
Tradax Export SA v Volkswagenwerk AGELR [1970] 1 QB 537
Vasso, TheWLR [1983] 1 WLR 838
Vosnoc Ltd v Transglobal Projects Ltd [1997] CLC 1345; [1998] 1 WLR 101
Shipping — Arbitration — Whether notice sufficient to commence arbitration — Whether party to arbitration agreement could join existing arbitration — Whether arbitrators could review decision to give leave to amend — Limitation Act 1980, s. 34(3).
These were two originating summonses seeking declarations that there was no arbitration between two parties and that the arbitrators' decision to reverse their decision allowing an amendment was made without jurisdiction.
Charles M Willie & Co (Shipping) Ltd (“Willie”) were the sellers and G Roussos Sons SA (“Roussos”) “or company to be nominated” the buyers under a memorandum of agreement (“MOA”) on the saleform 1987 for the sale of a motor vessel in 1990. The company nominated to take delivery and transfer of the vessel was Ocean Laser Shipping Ltd (“Ocean Laser”) and the bill of sale was made out in that name. Some months later Roussos alleged that Willie was in breach of the MOA because at the time of delivery the vessel was suffering from average damage affecting class which had led to engine breakdowns and which had not been reported to class.
Clause 15 of the MOA was an arbitration clause which provided for London arbitration by a single agreed arbitrator. If the parties could not agree on an arbitrator they were each to appoint an arbitrator and a third was to be appointed by the London Maritime Arbitrators Association. If a party failed to appoint an arbitrator, the third arbitrator was to appoint an arbitrator for that party. In 1992 Roussos invited Willie to agree on the appointment of a single arbitrator and, if they could not agree, to appoint its own arbitrator. A single arbitrator could not be agreed and Roussos appointed K as its arbitrator and Willie appointed N. Roussos then invited K by telex with copies to N and Willie to accept appointment as Ocean Laser's arbitrator in respect of disputes arising under the MOA. Willie claimed that it had no idea who Ocean Laser was and that there was no arbitration agreement with Ocean Laser. K replied that he was willing to accept appointment. When Roussos and Ocean Laser served points of claim Willie's position was again said to be that there was no arbitration agreement with Ocean Laser. Roussos then sent a letter to the two arbitrators, copied to Willie's solicitors, explaining that Ocean Laser had been nominated as buyer under the MOA. Willie's points of defence asserted that N and K were only appointed in respect of disputes between Roussos and Willie and that if an arbitration had been commenced by Ocean Laser the tribunal was not complete. A third arbitrator was appointed and in 1998 the arbitrators allowed the points of claim to be amended and published an interim final award holding that the tribunal had jurisdiction to determine the claims of Ocean Laser. The tribunal later changed its mind about one of the amendments it had allowed. Willie applied to the court for a declaration that Ocean Laser had not commenced an arbitration against it because Ocean Laser had not called on it to appoint an arbitrator or to agree to an appointment. Roussos and Ocean Laser sought declarations that the arbitrators had no power to reverse their decision allowing the amendment and that their first decision was final and binding.
Held, ruling accordingly:
1. An implied request was sufficient to commence arbitration. Section 34(3) of the Limitation Act 1980 only applied by analogy and express language in the terms of the Act was unnecessary. The question was whether the notice sufficiently or in substance made clear that the respondent was expected to act on the claimant's submission of a dispute to arbitration, on his invocation of the arbitration clause, so as to participate in the submission of the relevant dispute to arbitration. Furthermore the Act did not exclude other means of establishing the commencement of an arbitration. (Nea Agrex SA v Baltic Shipping Co LtdELR[1976] QB 933applied;Vosnoc Ltd v Transglobal Projects Ltd[1997] CLC 1345; [1998] 1 WLR 101not followed.)
2. A claimant commenced arbitration, in a two or three arbitrator situation, by appointing his own arbitrator which required the arbitrator's consent to act and notification to the respondent. Such notification could be regarded as an implied request to the respondent to appoint his own arbitrator. The telex asking K to accept appointment as Ocean Laser's arbitrator was intended to be viewed and was viewed by Willie as a request to appoint N as its arbitrator in respect of Ocean Laser's claims under the MOA. The fact that strictly Ocean Laser should have invited Willie to agree an arbitrator did not matter. If that was wrong, the arbitration was commenced by the letter explaining that as buyer Ocean Laser was entitled (and it would follow Willie was bound) to arbitrate, even though that letter was not a notice to Willie to appoint its arbitrator. (Nea Agrex SA v Baltic Shipping Co LtdELR[1976] QB 933, Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd[1997] CLC 1124; [1997] AC 749andSwiss Bank Corp v Novorossiysk Shipping Co (“The Petr Schmidt”)[1995] CLC 62applied.)
3. Although it was not necessary to decide the issue, Ocean Laser had properly joined the Roussos/Willie arbitration by obtaining K's consent to act and by giving notice to Willie and the arbitrators of their claim and of their submission to the tribunal already in place. No authority compelled the conclusion that where a claim by party A to a contract with party B had been submitted to arbitration under that contract's arbitration clause, another claim based on identical facts brought by another party to the same contract, C, could not (without the agreement of B) be referred to the same arbitration, but would have to be referred to a new arbitration.
4. The arbitrators did have jurisdiction to change their minds so as to refuse leave to amend the points of claim. The original decision to allow the amendment did not create an issue estoppel. It was not a decision on the merits but a matter of pure procedure. Nor was it an award. It did not dispose of part of the reference and was merely procedural. Arbitrators could probably render a decision of whatever nature in the form of an interim award, but did not do so in this case and accordingly had jurisdiction to revisit their decision. (The Sennar (No. 2)WLR[1985] 1 WLR 490, Cargill Srl Milan v P Kadinopoulos SAUNK[1992] 1 Ll Rep 1, Exmar BV v National Iranian Tanker Co (“The Trade Fortitude”)UNK[1992] 1 Ll Rep 169andThe VassoWLR[1983] 1 WLR 838considered.)
Rix J: There are before me two originating summonses which between them raise three questions about the jurisdiction of arbitrators. How, and in particular, when is an arbitration commenced? How, if at all, can a party to an arbitration agreement join an existing arbitration between other parties to the same arbitration agreement? Can arbitrators change their minds about giving leave to amend when once they have informed the parties of their decision?
These questions originate in a memorandum of agreement on the saleform 1987 form dated 1 April 1990 made between Charles M Willie & Co (Shipping) Ltd as sellers and George Roussos Sons SA “or company to be nominated” as buyers of the motor vessel Celtic Ambassador which, following delivery under the MOA, was renamed the Smaro. In the event the company nominated to take delivery and transfer of the vessel was Ocean Laser Shipping Ltd, and it was in that name that the bill of sale dated 26 April 1990 was made out. On 21 November 1990 the sellers (“Willie”) received a letter from Holman Fenwick & Willan (“HFW”) who said that they acted for George Roussos Sons SA (“Roussos”) as buyers of the vessel under the MOA, and enquired about an engine stoppage back in January 1988. Correspondence developed in which an allegation was made that Willie had been in breach of the MOA because at the time of delivery the vessel was suffering...
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