Furness Withy (Australia) Pty. Ltd v Metal Distributors (U.K.) Ltd (Amazonia)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STAUGHTON,LORD JUSTICE MANN,LORD JUSTICE DILLON |
| Judgment Date | 10 November 1989 |
| Judgment citation (vLex) | [1989] EWCA Civ J1110-2 |
| Docket Number | 89/1085 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 November 1989 |
[1989] EWCA Civ J1110-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(Mr. Justice Gatehouse)
Royal Courts of Justice
Lord Justice Dillon
Lord Justice Staughton
and
Lord Justice Mann
89/1085
MR. J. GILMAN (instructed by Messrs Holman Fenwick & Willan) appeared on behalf of the Appellants/Plaintiffs.
MR. G. KEALEY (instructed by Messrs Middleton Potts) appeared on behalf of the Respondents/Defendants.
This dispute is, or rather was when it arose in 1980, about US $46,701.86. It concerns a shipment of zinc concentrates from Port Pirie in South Australia to Visakhapatnam and Cochin in India. It is said that, due to an error in calculation by an officer on board the vessel, rather too much cargo was discharged at Visakhapatnam, with the consequence that too little was left to discharge at Cochin. Furthermore part of the cargo discharged at the first port is said to have been lost from the quay during the period following discharge. Such outturn disputes are not uncommon at some ports; but this one has given rise, in the events that have happened, to legal issues that are uncommonly complex.
Furness Withy (Australia) Pty. Limited were disponent owners of the m.v. AMAZONIA; they had chartered her from the registered owners. In these proceedings they feature as respondents in the arbitration, plaintiffs in the action, and appellants in this court. I shall call them "the Owners". Metal Distributors (UK) Limited had sub-chartered the vessel for the voyage in question. They are claimants in the arbitration, defendants in the action, and respondents in this court. They will be referred to as "the Claimants".
The action was brought by originating summons issued on 22nd October 1986. It seeks, in effect, a declaration that there are no valid arbitration proceedings in existence between the Claimants and the Owners, and an injunction. As it is accepted that the Hague Rules time limit of one year from the date of discharge applies to this charterparty, the result would be that the Claimants now have no remedy for the loss of which they complain.
The problem arises from clause 33 and 34 of the charter-party, which was dated 3rd December 1980. Those clauses are part of the printed forum, unamended, and read as follows:
"33. This Charter is subject to the terms and provisions of the Australian Sea-Carriage of Goods Act, 1924, so that the Rules Relating to Bills of Lading contained in the Schedule to the said Act shall apply to it. Any clause herein which is inconsistent with the rules and provisions of the said Act shall be void and of no effect to the extent of such inconsistency but no further.
34. Any dispute arising under this Charter and/or under any Bills of Lading incorporating the terms of this Charter shall be settled by arbitration in London before a single arbitrator to be agreed by the parties or in default of agreement appointed by the Court pursuant to the Arbitration Act 1950. This submission shall be a submission to arbitration for the purposes of and subject to the provisions of the Arbitration Act 1950 or any statutory re-enactment or amendment thereof, and the award of the arbitrator shall be enforced in the competent courts of any jurisdiction where enforcement is required. This Charter shall be governed and construed by the law of England."
The principle provisions of the Australian Sea-Carriage of Goods Act 1924, for the purposes of this dispute, are these:
4.(1) Subject to the provisions of this Act, the Rules contained in the Schedule to this Act (in this Act referred to as 'the Rules') shall have effect in relation to and in connexion with the carriage of goods by sea in ships carrying goods from any port in the Commonwealth to any other port whether in or outside the Commonwealth.
(2) The Rules shall not by virtue of this Act apply to the carriage of goods by sea from a port in any State to any other port in the same State.
9(1) All parties to any bill of lading or document relating to the carriage of goods from any place in Australia to any place outside Australia shall be deemed to have intended to contract according to the laws in force at the place of shipment, and any stipulation or agreement to the contrary, or purporting to oust or lessen the jurisdiction of the Courts of the Commonwealth or of a State in respect of the bill of lading or document, shall be illegal, null and void, and of no effect.
(2) Any stipulation or agreement, whether made in the Commonwealth or elsewhere, purporting to oust or lessen the jurisdiction of the Courts of the Commonwealth or of a State in respect of any bill of lading or document relating to the carriage of goods from any place outside Australia to any place in Australia shall be illegal, null and void, and of no effect.
The arbitration proceedings
On 7th December 1981 the Claimants wrote to the Owners' London agents, calling for an arbitration under the charter-party and asking the Owners to agree to one of three names as sole arbitrator. All three were well-known maritime arbitrators practising in London. The Claimants' solicitors wrote again on 15th January 1982 in these terms:
"
We refer to our telephone conversation yesterday with Mr. Swaine from which we understood that you had not in fact received the letter addressed to you by our Clients, Metal Distributors (UK) Limited, and dated 7th December 1981. Accordingly, we enclose a further copy of that letter.
You confirmed to us during the course of our conversation that you were fully authorised to accept a notice commencing arbitration on behalf of Furness Withy (Australia) Pty. Limited. You also confirmed to us that if it were to transpire that any notice given on behalf of our Clients commencing arbitration had been out of time, you would not be taking this point against our Clients and that an extension of time would be granted.
For the sake of good order, we hereby call upon Furness Withy (Australia) Pty. Limited to agree to the appointment of an arbitrator, as requested in our Clients' letter of 7th December 1981, in respect of all disputes arisen between them and our Clients under the above-mentioned Charterparty.
As agreed on the telephone, we are sending a copy of this letter to Mr. Gegg of the Disponent Owners' Club."
The Owners' agents replied by telex on the same day:
"M/V AMAZONIA C/P 3.12.80
We acknowledge receipt your letter 15 Jan. with enclosure. We confirm that we have not received the original of Metal Distributors letter of 7th Dec. 1981, but in view of the earlier exchanges we would not take the point of time bar against them.
Nevertheless we certainly do not necessarily agree to any of the three gentlemen so kindly proposed as sole arbitrator. We shall revert on this point in due course."
Solicitors were then involved for the Owners as well. The three names were not acceptable to the Owners, and their solicitors suggested a fourth—Mr. Basil Eckersley. He was and is a well-known maritime arbitrator practising in London. The Claimants' solicitors countered with the name of Mr. Donald Davies, of the same description. Evidently it was agreed that he should be the arbitrator. But the owners' solicitors then took a point that part of the claim was time-barred—viz. the loss of zinc concentrates from the quay at Visakhapatnam. They concluded their letter:
"Whilst therefore we are prepared to agree to the appointment of Mr. Donald Davies as sole arbitrator you will appreciate that our agreement must be on the express understanding that it is without prejudice to our clients' contention that any or all of your clients' claims are time barred."
They wrote again later:
"All that is required, therefore, is as we suggested in our letter of 3rd September that you acknowledge that our agreement to the appointment of a Sole Arbitrator does not waive any time-bar Defence which may exist."
The Claimants' solicitors replied:
"In the light of what you say, we take it that you will not be contending that the call to arbitration on 15th January was out of time. Subject to your confirming that this is the case, our Clients agree to the appointment of Mr. Donald Davies as Sole Arbitrator without prejudice to your Clients' right to contend that any part of the claim may be time-barred as not having been within the scope of the dispute submitted to arbitration.
If you will be good enough to let us have the confirmation requested, then we can each approach Mr. Davies with a view to progressing the Arbitration."
There does not appear to have been any reply, despite a reminder. On 20th October 1982 the Claimants' solicitors wrote to Mr. Davies, with a copy to the owners' solicitors, inviting him to accept appointment as sole arbitrator. He did accept.
Then events took a new turn. The Owners' solicitors suggested that Mr. Bruce Harris (one of the three candidates whom their clients had originally rejected) should be the sole arbitrator. This was more than a little late in the day, and the diffidence expressed in their proposal was wholly appropriate. But there was a sound reason for it. The Owners were seeking indemnity against the claim from the registered owners of the AMAZONIA. Furthermore the Claimants had made a direct claim against the registered owners, for which Mr. Harris had been appointed sole arbitrator. There was good sense in the proposal that one and the same tribunal should decide all three disputes.
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