Food Corporation of India v Marastro Compania Naviera S.A. of Panama (Trade Fortitude)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE LLOYD,LORD JUSTICE NICHOLLS |
| Judgment Date | 19 May 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J0519-8 |
| Docket Number | 86/0529 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 May 1986 |
[1986] EWCA Civ J0519-8
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(SPECIAL PAPER)
(MR. JUSTICE LEGGATT)
Royal Courts of Justice
Lord Justice Dillon
Lord Justice Lloyd
Lord Justice Nicholls
86/0529
MR. P. G. CALDIN (instructed by Messrs, Zaiwalla & Co.) appeared for the Appellants.
MR. M. J. COLLINS (instructed by Messrs. Sinclair Roche & Temperley) appeared for the Respondents.
On the application by the charterers for leave to appeal against the judgment of Leggatt J. of 30 July 1985, whereby he refused to remit the arbitrator's final interim award to the arbitrator for re-consideration with a view to correcting an alleged mistake or error in the award, and refused also to declare that the arbitrator had power to correct that mistake or error, I would grant leave to appeal, since the application for leave has been fully argued on the merits of the appeal and the argument has ranged over questions of law of considerable importance in relation to the remission and correction of arbitrators' awards.
At the end of the day, however, I do not find it necessary to decide any of those questions. The appeal falls to be decided on the facts. On the facts, it is not possible to say what error, if any, the arbitrator has made, and therefore it is not possible for this court either to declare that the arbitrator has power to correct the error or to remit the award with a view to the arbitrator correcting the error.
The owners' adjusted claim for demurrage was for 159 days 21 hours 31 minutes. The arbitrator awarded demurrage for 153 days four hours 18 minutes. Assuming, without deciding, that the arbitrator's confidential reasons can be looked at to see if he has made a mistake which ought to be corrected, I find that he has held that the steaming time (amounting to four days 13 hours 20 minutes) of five of the lighters to Calcutta is not to count against lay time, and a time for a winch breakdown of one hour 53 minutes is likewise not to count. These give a total of four days 15 hours 13 minutes.
The charterers say that, if four days 15 hours 13 minutes are not counted against laytime, the laytime extended into the weekend of 21/22 December 1974, which was also not to be counted against the charterers as the vessel was not on demurrage when the weekend began. They pray in aid an extra ten and a half days, being Saturday afternoon and Sunday for each of seven lighters. They submit that the arbitrator has made the mistake of adjusting for the four days 15 hours 13 minutes, which are not to count against laytime, by simply deducting that amount from the 159 days 21 hours 31 minutes demurrage claimed without addressing his mind to the weekend. But, if the arbitrator had only done that, he would have arrived at a figure of 155 days six hours 18 minutes demurrage. In fact, he has arrived at a figure of 153 days four hours 18 minutes, which is two days two hours lower. Whatever process led him to this figure, it is a figure between what the charterers say he should have awarded, and what he would have awarded if he had made the mistake which the charterers say he made.
I may suspect that the arbitrator has made a mistake or mistakes, but I cannot say what the mistake was and therefore I clearly cannot say that it was an accidental slip or omission within the meaning of the slip rule, section 17 of the Arbitration Act 1950, which the arbitrator has power to correct.
As to remission, I find directly applicable the comments of Stephenson L.J. in GKN Centrax Gears Ltd. v. Matbro Ltd. (1976) 2 LI Rep 555 at 576, where he said:-
"To send an award back to enable justice which has certainly not been done to be done…is one thing; to send it back to make sure that justice which may possibly not have been done is done is quite another and, as it seems to me, would, in the words of Willmer L.J. in Tersons Ltd. v. Stevenage Development Corporation (1965) 1 Q.B. 37 at p. 47:
'…cut at the root of the whole purpose of arbitration, the basic idea of which is that the arbitrator's decision shall be final.'
Accordingly, I would dismiss the charterers' appeal.
I turn to the appeal of the owners against the decision of Leggatt J. of 29 July 1985 whereby, on that part of the arbitrator's award which, pursuant to earlier directions, was in the form of a special case, he held that the arbitrator did not have power to award the shipowners' interest on a payment of US $39,809.10 on account of demurrage which the charterers had paid to the owners on 13 April 1982.
This was a voluntary payment by the charterers not under any order or award, made while the arbitration was pending. The judge held that the only power of an arbitrator to award interest on such a voluntary payment was the power conferred by the new section 19A of the Arbitration Act 1950 which was introduced into that Act by the Administration of Justice Act 1982. He further held that that power only applied to arbitrations under arbitration agreements entered into after the relevant provisions of the Administration of Justice Act 1982 had come into force, viz after 1 April 1983.
If the judge was right in that conclusion of law, his decision that the arbitrator had no power to award interest on this voluntary payment would follow on the dates in this case. The charterparty, which includes the arbitration clause and constitutes the arbitration agreement, was entered into on 12 September 1974. Final discharge of the cargo on completion of the voyage took place in January 1975. The arbitration was commenced on 9 January 1976. It proceeded at a pace which seems to have satisfied both parties (though it can hardly be said to demonstrate that expedition which is supposed to be a main advantage of the process of arbitration) and came on for hearing in March 1984. The arbitrator's award was ultimately made on 3 April 1985. In the meantime, the voluntary payment in question had been made on 13 April 1982, and section 19A had come into force on 1 April 1983.
Section 19A was introduced by section 15 of and Schedule 1 to the Administration of Justice Act 1982. These provisions of the 1982 Act, as my Lord has explained, also introduced a new section 35A into the Supreme Court Act 1981 and a new section 97A into the County Courts Act 1959. The new section 35A and the new section 97A gave power to the High Court and to the County Court to award interest, in proceedings for the recovery of a debt or damages, on all or any part of the debt or damages in respect of which judgment is given or payment is made before judgment. This covers a voluntary payment while proceedings are pending, and the wording of the sections makes it clear that they apply to proceedings whenever instituted. Before these sections came into force, the only relevant power of the courts to award interest was the power conferred on courts of record by section 3 of the Law Reform (Miscellaneous Provisions) Act 1934 to award interest on any sum by way of debt or damages for which judgment was given at the trial of the proceedings. Subsection (4) of section 15 of the 1982 Act provided that section 3 of the 1934 Act should cease to have effect in relation to the High Court and the County Courts because it was superseded, so far as applicable to those courts, by the provisions of the 1982 Act.
Section 19A of the Arbitration Act 1950 states that, unless a contrary intention is expressed therein, every arbitration agreement shall, where such a provision is applicable to the reference, be deemed to contain a provision that the arbitrator may award interest on any sum which he awards and on any sum which is the subject of the reference but which is paid before the award. The formula "unless a contrary intention is expressed therein, every arbitration agreement shall where such a provision is applicable to the reference be deemed to contain a provision that…" is common in the Arbitration Act 1950; see sections 8(2), 12(1) and (2), 14, 15 and 16. That is, as it seems to me, why the formula was used in section 19A. Section 19A does not refer in terms to "every arbitration agreement (whenever made)", but nor do the other sections in the Arbitration Act 1950 which I have mentioned; it was not necessary to include the words "(whenever made)" in those sections because section 33 of the Arbitration Act 1950 has provided that Part I of the Act (which comprises sections 1 to 34) shall not affect arbitrations commenced before the commencement of the Act but shall apply to arbitrations commenced after the commencement of the Act under agreements made before the commencement of the Act. On coming into force, section 19A has to be read in its context in Part I of the Arbitration Act 1950 and in conjunction with section 33. Prima facie, therefore, it applies to any arbitration commenced after the commencement of the Arbitration Act 1950, which was in 1950. I cannot read the words "commencement of the Act" in section 33 as meaning in relation to section 19A the coming into force of section 15 of the 1982 Act by which section 19A was inserted into the Arbitration Act 1950. Mr. Caldin sought to found an argument in relation to section 33 on section 20(2) of the Interpretation Act 1978 but that subsection is directed to a different purpose, and section 33 has not been amended by the 1982 Act.
Parliament could have made the position clearer, if it was intended that section 15A should have fully retrospective effect, by providing in the 1982 Act in terms that it was to apply to arbitration agreements...
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