Fidelitas Shipping Company Ltd (Claimants Respondents) v V/O Exportchieb (Respondents Appellants)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE DANCKWERTS,LORD JUSTICE DIPLOCK |
| Judgment Date | 23 February 1965 |
| Judgment citation (vLex) | [1965] EWCA Civ J0223-1 |
| Court | Court of Appeal |
| Date | 23 February 1965 |
[1965] EWCA Civ J0223-1
In The Supreme Court of Judicature
Court of Appeal
From Mr Justice Mocatta
The Master of the Rolls (Lord Denning)
Lord Justice Danckwerts and
Lord Justice Diplock
MR. M. J. MUSTILL (instructed by Messrs Hiddleton Lewis & Co.)appeared as Counsel for the Appellants.
MR. ROBERT GOFF and MR MARK SAVILIE (instructed by Messrs Richards, Butler & Co.) appeared as Counsel for the Respondents.
In October 1960 the motor vessel "Sophia" was chartered to cany grain from the Black Sea to Avanmouth. She arrived at the loading port on let October, 1960, but loading did not commence for three weeks. The owners blamed the charterers for the delay because they had not cargo ready to load. The charterers blamed the owners because the vessel, they said, had weevils and otter pests in the holds and was unfit to carry grain. After three weeks a cargo of grain was loaded and carried to Avonmouth. The owners say that, on account of the delay, demurrage was incurred in the sum of £5,642. 5s.7d. The shipowners released the cargo to the consignees without insisting on any lien for demurrage. Later on the charterers paid £760. 18s.6d. on account of demurrage. The owners claimed the balance of deourrage £4,881. 7s.1d. The matter went to arbitration. The principal issues argued before the Umpire were: (1) Whether the vessel was fit for the carriage of grain; tor if she was, the charterers ought to have loaded a cargo at once; and having failed to do so, were prima facie liable for the demurrage claimed. (2) Whether the owners' claim was excluded by Clause 27, the "cesser clause" which said that:"…27. The charterers' liability on this charter to cease when the cargo is shipped (provided the same is worth the freight, dead freight and demurrage, on arrival at port of discharge), the owner or his agent having a lien on the cargo for freight, dead freight, demurrage, lighterage at port of discharge and average". If that clause applied, the owners ought to have recovered the demurrage by insisting on their lien; and, not having done so, they could not recover against the charterers. (3) The owners argued, however, at the arbitration that the charterers, by paying £760. 18s.6d. on account of demurrage, had waived the "cesser clause" and could not rely on it. In support of waiver they cited in a letter Rederi Aktiebolaget Transatlantic v. The Board of Trade (1924) 30 Commercial Cases, pp. 117, 125-7.
The charterers asked the Umpire to state his award in the form of a Special Case. He did so. In his award he found that the vessel was fit to load and that the claim for demurrage was not excluded by the cesser clause. He said: "Subject to the answer of the Court to the questions hereinafter stated, I award and adjudge that the charterers do pay to the owners a balance of demurrage in the sum of £ 4,881. 7s.1d."
There were two questions for the Court. I need not trouble about Question 1 for that dealt only with lay-time. But Question 2 was: "Whether the claimants' claim against the respondent is excluded by Clause 27 of the said charterparty". The Unpire added: "If the opinion of the Court is different from the above, I respectfully request that the opinion of the Court be made known to me and that this award be remitted to me to enable ne to reconsider my award".
It is to be noted that the Special Case did not distinctly raise any point about waiver of the cesser clause. There is perhaps a hint of it in the facts in the one sentence: "The charterers paid £760. 18s.6d. on account of demurrage": and in the contention of the owners "that clause 27 of the charterparty did not, in the circumstances of this case, relieve the charterers from liability for loading port demurrage". But these hints are so slight that, if the owners wished to raise the point of waiver for the opinion of the Court, they ought to nve got the Special Case remitted (by consent or by order) for the relevant facts to be stated and a specific question asked about it. They did none of these things. And when the award came before Mr Justice Megaw they did not take the point of waiver.
Mr Justice Megaw decided that the claim for demurrage Mr. Excluded by the cesser clause, see 1963, 1 Lloyds List Reports, p. 246, and his decision was affirmed by the Court of Appeal, see 1963, 2 Lloyds List Reports, p. 113. The owners asked the House of Lords for leave to appeal but it was refused,The result was that, in the opinion of the Courts (contrary to that of the Umpire) the claim for demurrage was excluded by the cesser clause. So the award went back to the Umpire in accordance with his request that "this award be remitted to me to enable me to reconsider my award".
At the hearing before Mr Justice Megaw, the owners asked that, when the award was remitted to the Umpire, the owners should be permitted to maintain their submissions about waiver, Mr Justice Megaw expressed the opinion obiter that it was not open to the Umpire to consider the question of waiver (see 1963, 1 Lloyds List Reports, pp. 254-5). The Court of Appeal expressed no opinion on it (see 1963, 2 Lloyds List Reports at p. 126) so the matter went back to the Umpire without any ruling on the point of waiver.
At the new hearing before the Umpire the owners sought again to raise the point about waiver of the cesser clause. The charterers said that the owners ought not to be allowed to raise it. Faced with these rival contentions, the Umpire has stated a consultative case so as to see whether the owners should be allowed to raise it or not. Mr Justice Mocatta has held that the owners can raise it. The charterers appeal to this Court.
If the first award had been truly a consultative case (as Mr Justice Mocatta thought it was) I would have agreed with him that the point of waiver could be raised again before the Umpire. But I do not think the first award was a consultative case. I think it was an interim award. And this makes all the difference, as I will show. Before the year 1934 our law of arbitrations recognised only two ways in which an arbitrator or umpire could state a special case for the "opinion" (or "decision", I care not which word is used) of the High Court. One was a final award under Section 7(b) of the 1889 Act. The other was a consultative case under Section 19. On a final award there was a right of appeal from the decision of the High Court to the Court of Appeal and thence to the House of Lords.On a consultative case there was no appeal from the decision of the High Court. In order to distinguish between these two alternatives, the test was whether the arbitrator or umpire had in his award exhausted his duties so there there was nothing left for him to do. It he had bid farewell to his office — so that the opinion of the Court could decide all the issues one way or the other — then it was a final award. But if there was something left for the arbitrator or Umpire to do, even if he retained for himself so little as the assessment of damages, then in was a consultative case and not a final award, see Cogstad & Co. v. Newsum. Sons & Co.. 1921, 2 Appeal Cases, p. 528.
Since 1934, however, there has been a third way open to obtain the decision of the High Court. This is by way of an interim award. A special case can now be stated with respect to an interim award, just as with a final award, see Sections 7(4) and 9(2) of the 1934 Act now replaced by Sections 14 and 21(2) of the 1950 Act. Nowhere is an "interim award" defined. But it seems to me that an interim award may be of two kinds. It may be an interim order made pending the final determination of the case; such as an award that an instalment under a building contract be paid pending final determination of the amount due. Or it may be an interim decision, given on a particular issue or issues between the parties, pending final determination of the whole case; such as a decision that a contract was concluded, but leaving over the question of damages. Such an award is not a final award because the arbitrator has not exhausted his duties. It is, however, an award because it is an order or decision on an issue calling for determination. It is, therefore, an interim award: and it can be stated in the form of a special case for the decision of the High Court.
Since the introduction of such an interim award, a consultative case should be confined to those cases where the arbitrator or umpire asks for the guidance of the Court without coming to a decision himself. The typical case is where, duringthe course of the reference, a question of law arises, and he wants to know the opinion of the Court before he comes to his decision. Such was the case in Re Knight & Tabernacle Building Society. 1892, 2 Queen's Bench, p. 613, where the arbitrator panted to know whether the Society had power to make alteration; in their rules so as to bind Knight. To such a case the words of Lord Justice Bowen still apply: "The section contemplates a proceeding by the arbitrator for the purpose of guiding himself as to the course he should pursue in the reference. He does not divest himself of his complete authority over the subject matter of the arbitration. He still remains the final judge of law and fact", see 1892, 2 Queen's Bench at p. 619. Previously no appeal at all lay from the decision of the High Court on a consultative case. Even now it does not lie without the leave of the High Court or the Court of Appeal, see Section 21(3) of the 1950 Act.
Into which category does the first award in this case come? It is obviously not a final award: because the Umpire in a certain event desires to reconsider his award. It is either an interim award or a consultative case. And of these two I think it is an interim sward stated in the form of a special case...
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