Glencore International AG (Appellant (Respondent in the Arbitration) v Pt Tera Logistic Indonesia and Another (Respondents (Claimants in the Arbitration)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Knowles |
| Judgment Date | 29 January 2016 |
| Neutral Citation | [2016] EWHC 82 (Comm) |
| Docket Number | Case No: CL-2015-000012 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 29 January 2016 |
[2016] EWHC 82 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Knowles CBE
Case No: CL-2015-000012
In the matter of the Arbitration Act 1996
And
In the matter of two Arbitrations
Charles Kimmins QC and Leonora Sagan (instructed by Holman Fenwick Willan) for the Appellant
Jern-Fei Ng (instructed by Kennedys) for the Respondents
The question of law on this appeal has been framed in these terms:
"In circumstances where a claim and a counterclaim arise from a single set of facts giving rise to a balance of accounts or netting-off, does a reference to "claims" or, alternatively, to "all disputes arising under the contract", in a notice of appointment of an arbitrator, suffice to interrupt the running of time in respect of a counterclaim for the purposes of s14(4) Arbitration Act 1996?"
The arbitrators themselves were divided on the issue. Permission to appeal was given to the Appellant by a Judge of the Commercial Court under section 69 of the Arbitration Act 1996 ("the 1996 Act"). The Judge considered the issue to be of general public importance. The Appellant, through Mr Charles Kimmins QC and Ms Leonora Sagan, described the issue as one of market interest. The majority arbitrators on the other hand had regarded the case as unusual; a view adopted by the Respondents to the Appeal (the "Owners"), appearing by Mr Jern-Fei Ng.
Section 14 of the 1996 Act provides:
"Commencement of arbitral proceedings
(1) The parties are free to agree when arbitral proceedings are to be regarded as commenced for the purposes of this Part and for the purposes of the Limitation Acts.
(2) If there is no such agreement the following provisions apply.
(3) …
(4) Where the arbitrator or arbitrators are to be appointed by the parties, arbitral proceedings are commenced in respect of a matter when one party serves on the other party or parties notice in writing requiring him or them to appoint an arbitrator or to agree to the appointment of an arbitrator in respect of that matter.
(5) …"
The parties had entered into four contracts for the charter of floating cranes to enable the Appellant to load coal on vessels at anchorages. The contract provided for what was termed "MV Demurrage" to be paid by the Owners or for what was termed "FC Detention" to be paid by the Appellant depending on the cause of any delay beyond an agreed minimum loading-rate.
In the event the issue has arisen in two arbitrations between the parties. In the first, the Owners gave notice in writing that they commenced "arbitration proceedings against you in respect of their claims under this Contract", appointed an arbitrator and required the Appellant to appoint an arbitrator. The Appellant responded by appointing a second arbitrator "in relation to all disputes arising under the [contract]". In the second, the Owners gave notice in writing that they commenced "arbitration proceedings against you in respect of claims under this Contract" (this time, the word "their" was not used), appointed an arbitrator, and required the Appellant to appoint an arbitrator. The Appellant responded by appointing a second arbitrator "in relation to all disputes arising under the [contract]". In due course in each arbitration the two appointees then appointed a third arbitrator.
By the time the Appellant had served defence and counterclaim submissions in the arbitrations, the limitation period for claims under the contracts had expired. This fact caused two members of the tribunal to find that the counterclaims were time-barred. The third member of the tribunal dissented, taking the view that the notices commencing the arbitrations included both claims and counterclaims.
The issue is ultimately one of the jurisdiction of the arbitral tribunal: Interbulk Ltd v Ponte Dei Sospiri Shipping Co ("The Standard Ardour") [1988] 2 Lloyd's Rep 159 at 162 (per Saville J.). To decide that issue it is "necessary to look objectively at what has passed between the parties to the reference": The Standard Ardour at 162; Bulk & Metal Transport (UK) LLP v VOC Bulk Ultra Handymax Pool LLC ("The VOC Gallant") [2009] 1 Lloyd's Rep 418; [2009] EWHC 288 (Comm) at [12] (per HH Judge Mackie QC sitting as a High Court Judge). This involves construing "words in the context in which they were used" ( Harper Versicherungs AG and Others v River Thames Insurance Company Ltd and Others [2006] EWHC 1500 (QB) at [53] (per Tomlinson J); The VOC Gallant at [20]). "Courts (and indeed adjudicators)...
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Mex Clearing Ltd v Mex Securities Sarl
...the language of Lord Goff in Spiliada. 9 [1992] Ch 72. 10 [1971] AC 356. 11 Glencore International AG v PT Tera Logistic Indonesia [2016] EWHC 82 (Comm), [2016] Bus LR 12 13 Eliz I c. 5. Court Registrar 1 Civil Appeal Nos 20 of 2003 and 1 of 2004 (determined 19th September 2005, unreport......