Geogas S.A. v Trammo Gas Ltd (Baleares)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE RALPH GIBSON,LORD JUSTICE LEGGATT,LORD JUSTICE NEILL,LORD JUSTICE STEYN |
| Judgment Date | 01 December 1992 |
| Neutral Citation | [1990] EWCA Civ J1114-3 |
| Judgment citation (vLex) | [1992] EWCA Civ J1105-4 |
| Docket Number | 90/1090,92/1084 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 December 1992 |
[1990] EWCA Civ J1114-3
Lord Justice Dillon
Lord Justice Ralph Gibson
and
Lord Justice Leggatt
90/1090
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 Webster)
Royal Courts of Justice
MR. P. H. GOLDSMITH Q.C. and MR. J. CHAPMAN (instructed by Messrs Middleton Lewis Lawrence Graham) appeared on behalf of the Respondents (Plaintiffs).
MR. K. ROKISON Q.C. and MR. P. GROSS (instructed by Messrs Ince & Co.) appeared on behalf of the Applicants (Defendants).
The court has before it an application by Trammo Gas Limited ("Trammo") for leave to appeal under section 1(7) of the Arbitration Act 1979. The respondent to the application is Geogas S.A. ("Geogas").
The dispute between these parties arises out of a charterparty on an Asbatankvoy form dated London 12th January 1987 whereby Geogas chartered the Baleares or a suitable substitute in Owner's option to Trammo to carry a cargo of 30,000 metric tonnes of refrigerated L.P.G. from Bethioua in Algeria to a range of discharge ports. The charterparty was to be governed by English law and it contained provisions for disputes to be referred to arbitration in London, each party appointing an arbitrator and a third being appointed by the two so chosen.
The charterparty provided that the vessel should "with all convenient despatch proceed." to Bethioua. The charterparty described the vessel as "now trading" and "expected ready 31st January 1987"; it provided for "Laydays. Commencing 30th January 1987. Cancelling 5th February 1987."
The vessel was in fact at the date of the charterparty leaving Ras Tanura in the Arabian Gulf on a prior voyage which took her to Cartagena and then Tarragona to discharge. In the event on the 6th February, neither the Baleares nor a suggested substitute having arrived in Bethioua, Trammo cancelled the fixture, without prejudice to claims for damages.
Those claims were the subject of arbitration before three arbitrators, each experienced in his own field, and by a unanimous award of the 9th February 1989 the arbitrators made comprehensive findings of fact and awarded Trammo damages of US $1,425,000 together with interest and costs.
Trammo applied for leave to appeal to the High Court against the award and by an order made on the 17th May 1989 under section 1(3)(b) of the 1979 Act Saville J. granted leave to appeal on the following question of law, namely "Whether on the facts found, the charterers are entitled to recover from the owners the damages awarded by the arbitrators."
The appeal for which leave was thus given came before Webster J. and by his Order of the 14th March 1990 he allowed the appeal and set aside the award. It is against that Order that Trammo now seek leave to appeal.
The relevant statutory provision, now well-known, is section 1(7) of the 1979 Act which provides as follows:
"(7) No appeal shall lie to the Court of Appeal from a decision of the High Court on an appeal under this section unless
(a) the High Court or the Court of Appeal gives leave; and
(b) it is certified by the High Court that the question of law to which its decision relates is one of general public importance or is one which for some other special reason should be considered by the Court of Appeal."
By his order Webster J. certified two questions of law under section 1(7)(b) of the 1979 Act viz:
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(i) What is the measure of damages for breach of an obligation which if performed would have given a trader an opportunity to acquire on or about a particular date goods for the purpose either of re-selling them or of holding them in stock? and
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(ii) Can an actual breach of an obligation to arrive at a port with reasonable despatch occur before the vessel in question has left its immediately preceding port?
But the judge, having certified these questions, refused Trammo leave to appeal.
The judge did not indicate whether in certifying the two questions he formulated under section 1(7)(b) he was certifying them as questions of general public importance or as questions which for some other special reason should be considered by the Court of Appeal. It seems however that he was certifying them as questions of general public importance; it has been held by this court in The Pera [1985] 2 LL.Rep 103 at 105 and 108 that the fact that a judge is differing from three experienced arbitrators is not a "special reason" why a question decided by the judge should be considered by the Court of Appeal, and no other special reason has been suggested in argument.
Of the two questions certified by the judge, the second, though of general public importance, is of little practical relevance to this case. The judge held, on his interpretation of the authorities to which he referred, that an obligation on an owner that a ship will proceed with all convenient despatch to a specified port, only attaches as an obligation, and becomes susceptible of breach, when the ship leaves the final port of her precedent voyage, which in the case of the Baleares was Tarragona, which is only 22 hours sailing time from Bethioua and which she actually left on the 7th February. But even if the judge was wrong on that, any claim against Geogas for failure to proceed with adequate despatch would be covered by the claim which the arbitrators held to be established by findings which are not challenged, that Geogas was in breach of the obligation imposed on it by the stipulation in the charterparty in relation to the ship "Expected ready 31st January"; this was the main basis of Trammo's case in the arbitration.
The crux of any appeal is therefore the first question certified by the judge as to damages. That is a question which depends on the application of general principles of law in somewhat unusual circumstances. What actually happened was that because of the non-arrival of the Baleares or a substitute for loading before the cancelling date Trammo was unable to perform various contracts, of which Geogas was not aware, with subpurchasers of the cargo it had been intended to ship in Baleares. Trammo had therefore to settle the claims of those subpurchasers and the cost was high because the market was restricted and when it became known in the market that Baleares was going to be late the price of L.P.G. in North Africa rose by some $50 per metric tonne; this was referred to as a "market hype".
If Webster J. had, besides refusing leave to appeal, refused to certify questions under section 1(7)(b), Trammo could not have applied to the Court of Appeal for leave to appeal. As however he did certify questions, albeit he refused leave to appeal, it is open to Trammo to apply to this court for leave to appeal, and this Trammo has done. Such a situation is clearly envisaged by section 1(7), and is in line with the practice of the criminal division of the Court of Appeal in relation to appeals to the House of Lords in criminal matters, from which the conditions of section 1(7) were said by Lord Diplock to have been clearly adapted; see The Nema [1982] AC 724 at 740 D-E.
The application to this court for leave to appeal came first before Staughton L.J. for decision on the papers. He refused leave and said in his reasons:
"I would have wished to grant leave to appeal in this case since (i) there is a substantial sum of money involved, (ii) there are interesting points of law on which it is arguable that the judge was wrong, and (iii) as the judge recognised by granting a certificate, either these points are of general importance or for some other reason they ought to be considered by the Court of Appeal.
But I am required by authority, as it seems to me, not to grant leave unless there is a strong prima facie case that the judge was wrong, this not being a one-off case. (Since that is the rule, I do not see how a judge himself could ever grant leave, except where there are conflicting decisions: but that is by the way). I do not consider there to be a strong prima facie case that the judge was wrong. Indeed it would be bold to do so, since Saville J. in granting leave to appeal from the arbitrators must have been inclined to share the view later taken by Webster J."
Plainly, from the wording he used, Staughton L.J. was taking the view that in deciding whether or not to give leave to appeal gainst the decision of a judge on an appeal by leave from arbitrators the Court of Appeal ought to follow the guidelines laid down by the House of Lords in The Nema.
Trammo, as it was entitled to, renewed its application to this court for leave to appeal against the order of Webster J., and the renewed application came before Parker L.J. in open court. He adjourned the application to a full Court of Appeal. That is how it comes before us. He also directed that the substantive appeal do not follow immediately after the hearing of the application for leave, should leave be granted. That is in line with the comment of Donaldson L.J. in Babanaft International v. Avant Petroleum [1982] 1 WLR 871 at 881 D-E where he said:
"If we are to adopt a similar approach [to that in The Nema in considering whether to grant leave to appeal from a decision of the High Court, whether given under section 1 or under section 2, it would be wholly inappropriate to allow the type of prolonged adversarial argument which is usually deployed where the application for leave is to be followed immediately by the hearing of the appeal if leave is granted."
On the hearing of the application before us Mr. Rokison Q.C. urged, in the final alternative, that there was indeed, contrary to the view of Staughton L.J., a...
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