Food Corporation of India v Antclizo Shipping Corporation (Antclizo)

JurisdictionEngland & Wales
Judgment Date07 April 1987
Judgment citation (vLex)[1987] EWCA Civ J0407-1
Docket Number87/0309
CourtCourt of Appeal (Civil Division)
Date07 April 1987
Food Corporation of India
Plaintiffs (Appellants)
Antclizo Shipping Corporation
Defendants (Respondent)

[1987] EWCA Civ J0407-1


Lord Justice Kerr

Lord Justice Nicholls


Lord Justice Bingham


1984 F. No. 139







Royal Courts of Justice

MR. ROGER BUCKLEY QC and MR. PEREGRINE SIMON (instructed by Messrs. Zaiwalla & Co., Solicitors, London WC2A 1DT) appeared on behalf of the Plaintiffs (Appellants).

MR. ANTHONY CLARKE QC and MR. CHARLES HADDON-CAVE (instructed by Messrs. Holman Fenwick & Willan, Solicitors, London, EC3N 3AL) appeared on behalf of the Defendants (Respondents).


On 31st October 1985 Mr. Justice Evans, sitting in the Commercial Court, refused the Food Corporation of India ("the Charterers") a declaration that an arbitration agreement between them and Antclizo Shipping Corporation ("the Owners") had been mutually abandoned, and further refused the Charterers an injunction to restrain further proceedings by the Owners in an arbitration commenced by the Owners against the Charterers upwards of 10 years earlier. The Charterers appeal against that decision.


It is an everyday fact of litigious life that proceedings are begun which, after an initial flurry of activity, languish untended, often for years. Where the proceedings are in court the pattern of events is familiar and the procedure well-established. The defendant in the ordinary way has no incentive to breathe life into a hostile claim against him. He owes the plaintiff no duty to do so. He fears that if he takes any step in the proceedings the plaintiff may be prodded into action. So he sits back and does nothing. Then, usually on the first sign that the plaintiff intends to pursue the action, the defendant applies to dismiss it for want of prosecution. The principles upon which the court will then act are settled by such leading cases as Allen v. McAlpine (1968) 2 Queen's Bench 229 and Birkett v. James (1978) Appeal Cases 297. Whatever problems may arise in applying these principles in practice, there is little if any doubt about the principles themselves.


Delays of this kind should not occur where parties have referred differences between them to arbitration because

"both parties, respondent as well as claimant, are under a mutual obligation to one another to join in applying to the arbitrator for appropriate directions to put an end to the delay" ( Bremer Vulkan Schiffbau und Machinenfabrik v. South India Shipping Corporation Ltd. (1981) AC 909 at 986C, per Lord Diplock).


But in practice delays occur in the conduct of arbitration references as of court proceedings. Whether through failure to appreciate the duty to which they are subject or through neglect of it, respondents to claims made in arbitration habitually behave in very much the same way as defendants in court proceedings. The normal policy is to lie low and do nothing which may stir the claimant into action.


Procedurally, however, the position in arbitration is very' different, because there is no power in the court or in the arbitrator to dismiss the reference for want of prosecution: Bremer Vulkan, supra. Section 5 of the Arbitration Act 1979 does provide a procedure for dealing with delay, but it is not very often invoked and virtually never by respondents, no doubt because it facilitates what most respondents in this position (despite the legal duty upon them) least desire, the making of an award. Attempts have been made by respondents to show that agreements to refer disputes to arbitration have been repudiated or frustrated, but these attempts have failed on principle: Bremer Vulkan, supra; Paal Wilson Co A/S v. Partenreederi Hannah Blumenthal (The Hannah Blumenthal) (1983) 1 Appeal Cases 854. If a respondent to a claim made against him in a stale arbitration now seeks to dispose of the claim otherwise than on the merits, his only course (as it would appear), if he has himself acquiesced in the claimant's delay, is to show either that the claim or the reference or both have been consensually abandoned or that the claimant is estopped from asserting that the claim or the reference remain alive. In practice these contentions are not very different.


No doubt there are cases in which claimants and respondents expressly agree to drop claims or references to arbitration or in which claimants expressly state that they will do so. In such a case, should a dispute arise, the court would resolve it in the ordinary way by finding what was written or said and determining its effect. But these have not been the cases which, over the last few years since the law on this subject, was laid down, have come before the courts. These have been cases in which there have for long periods been total or almost total silence and inactivity on the part of both parties to the arbitration under review. The court's task has been to determine, on the facts of the particular case, how a reasonable respondent in the position of the respondent in question would have interpreted the silence and inactivity of the claimant in the arbitration; how the respondent in question did in fact interpret the silence and inactivity of the claimant; and how a reasonable claimant in the position of the claimant in question would have interpreted the silence and inactivity of the respondent. These have not proved to be short or simple enquiries. The present hearing lasted about four days, with oral evidence on two of them bearing on the Charterers' actual state of mind. In addition to this the judge had a number of bulky files of affidavits and documents. In Excomm Limited v. Guam Guam Shipping (Plc) Limited (The Golden Bear) (unreported, 5th November 1986), the situation was no better.


Mr. Justice Staughton observed:

"This action is brought with a view to putting an end to arbitration proceedings by the Owners against the Charterers, in consequence of delay by the Owners, uninterrupted for eight years. One would hope that it could be determined quickly, in the light of that objective but it has taken 20 months to come on for hearing. There have been pleadings, affidavits and exhibits of considerable volume, and the case took over four days to try, one day being occupied almost wholly with the cross-examination of witnesses on their affidavits. That is not the fault of the parties or their legal advisers. It is due to the present state of English law on the topic….

….Four professional witnesses came to give evidence including one from abroad. The cost of their attendance, and of this action generally, must be substantial. Indeed, I wonder whether the arbitration which it is sought to stay could not have been determined more cheaply and more quickly than this action to stay it…..

….So far as the Commercial Court is concerned, one could wish that its limited resources were devoted to the business of those who do want their disputes tried, rather than to the cases of those who have shown a conspicuous lack of enthusiasm for justice in the past".


There are several decisions at first instance in which the application of the relevant legal principles to different factual situations has been skilfully and interestingly explored. The principles themselves, however, are to be found in 3 decisions, all of them binding on this court. They are: Andre et Cie SA v. Marine Transocean Limited (The Splendid Sun) (1981) 1 Queen's Bench 694, a decision of this court; The Hannah Blumenthal, supra, a decision of the House of Lords; and Allied Marine Transport Ltd v. Vale do Rio Doce Navegacao SA (The Leonidas D) (1985) 1 Weekly Law Reports 925, a decision in which this court ruled upon the correct interpretation of their Lordships' decision in The Hannah Blumenthal and made observations on The Splendid Sun and the formation of tacit contracts to abandon.


In The Splendid Sun the arbitration arose from grounding damage. Following the appointment of arbitrators there was a period of eight years during which nothing happened, save that one of the arbitrators died (and was not replaced). Two members of the court considered abandonment expressly. Lord Denning, Master of the Rolls, said (at page 700 C):


For myself, I would be prepared to decide this case on the same lines as Pearl Mill Co. Ltd. v. Ivy Tannery Co Ltd. (1919) 1 KB 78. The lapse of time—over eight years—was so long that ( per Rowlatt J., at p.82): 'the proper inference to be drawn was that each party was justified in assuming that the matter was off altogether'. I look at it in this way. It was the owners who were making the claim for damage to the ship. It was their master who was navigating it into the berth. It was for him and the crew to say how she came to be grounded—to give some evidence that the berth was unsafe—and that the grounding was not due to the bad navigation of the master.

As soon as the two arbitrators were appointed in 1969, it was for the owners to take the next step. Either by applying to the arbitrators for directions, or (as they eventually did) omitting that step and delivering points of claim. By failing to take that step, it would look as if they—or their insurers—had little confidence in the claim. They may have suspected it was the master's own fault. Then, after five years, one of the arbitrators, Mr. Lynn, died. Still the owners did nothing. I do not see why the charterers at that stage should have been expected to appoint anyone in Mr. Lynn's place. It was for the owners—if they were pursuing their claim—to serve the charterers with notice to appoint a...

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