Halfdan Grieg & Company A/S v Sterling Coal & Navigation Corporation (Lysland)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE MEGAW,LORD JUSTICE SCARMAN |
| Judgment Date | 03 April 1973 |
| Judgment citation (vLex) | [1973] EWCA Civ J0403-1 |
| Date | 03 April 1973 |
| Court | Court of Appeal (Civil Division) |
[1973] EWCA Civ J0403-1
In The Supreme Court of Judicature
Court of Appeal
Appeal of Plaintiffs from Order of Mr. Justice Kerr on 29th November 1972.
The Master of the Rolls (Lord Denning)
Lord Justice Megaw and
Lord Justice Scarman
In the Matter of the Arbitration Act 1950 and
In the Matter of a Pending Arbitration Wherein Stealing Coal and Navigation Corporation and A.C. Neleman's Handel-En Transporton-Derneming are Claimants and Halfdan Grieg & Co. A/S are Respondents
Mr. ROBERT GOFF, Q.C., and Mr. BASIL ECKERSLEY (instructed by Messrs. Sinclair, Roche & Temperley) appeared on behalf of the Appellant Plaintiffs.
Mr. CHRISTOPHER STAUGHTON, Q.C, and Mr. P.N. LEGH-JONES (instructed by Messrs. Thomas Cooper & Stibbard) appeared on behalf of the Respondent Defendants.
By a charterparty dated 21st January 1964, the owners of the Norwegian vessel "Lysland" let her on a time charter for 24 months to charterers. Delivery was effected on 29th March 1964, so that, if the time charter had run its full course, it would have expired about March of 1966. But it did not run its full course. The parties agreed to determine it as at 30th October 1964. So it only lasted seven month's, leaving the remaining 17 months undone. The owners were thereafter free to operate the vessel at their discretion, but the agreement provided that accounts were to be adjusted according to whether the owners earned more or less during the remaining 17 months than they would have done under the original charter. During the first nine months out of the seventeen months, that is, from 30th October 1964, to 29th July 1965, the owners let her on several voyage charters. The figure for those nine months can be adjusted without difficulty. But for the last eight months, from August 1965, to March 1966, the owners let the vessel on a long-term time charter at a low rate, which was less than the rate in the original charter. The owners claim to be compensated for the difference. But the charterers say that the owners, if they had tried, could have let the vessel for a shorter term at a rate equivalent to the rate in the original charter, and that, accordingly, the owners are entitled to nothing for that period.
The dispute was referred to arbitration in London. It depended on the true construction of the agreement by which the original charter was determined after seven months. The agreement was dated 4th November 1964. The most material clauses are these: 1. From the time of re-delivery "The owners to operate the vessel at their discretion, and Owners are entirely free to fix the shipon their discretion, including fixing her on time charter for any period, also in excess of the expiry of the time-charter period under C/P dated 21st January 1964, and at rate lower then dollars 3.00".
4. "The deposit" (by the charterers to the owners) "is to be brought up to the full amount, viz: Norw. Kr. 750,000".
5. "The amount deposited according to the preceding clause of this agreement is to be returned to the Time-charterers, if, for the balance of the time-charter period as for Charter party of the 21st January 1964, the Owners are able to earn an amount equivalent to or exceeding dollars 3.00 less 2½ address commission on T/C basis. If the Owners earn less, the difference to be deducted from the amount deposited and the balance of the deposit, if any, to be returned to Time-charterers. If the deposit is not sufficient to cover the said difference the Time Charterers shall immediately pay the said difference so far as it exceeds the amount deposited".
9. "Should any dispute arise out of the present agreement, same to be settled in London according to English law".
The contention of the ship owners is that under Clause 1 they were entitled to fix the ship for the long-term time charter, and that under clause 5, as it earned less, they were entitled to the difference: whereas, the charterers contend that the sums should be adjusted so as to take account of (a) expiry date; (b) redelivery range; (c) commission payable and (d) quality of fuel to be used. In money terms, it makes a difference of some £57,000.
The agreement contained no provision for arbitration. It simply provided that any dispute should be "settled in London according to English law". In 1966 the parties did agree to submit the difference to arbitration. We have not seen the arbitrationagreement. I assume that it was a simple agreement which would "bring in all the provisions of the Arbitration Act 1950 as to the award being final and binding, and so forth. The owners appointed Mr. Chesterman as their arbitrator. The charterers appointed Commander Sumpton as theirs. The two arbitrators appointed Mr. Barclay as Umpire. There was much delay in bringing the matter to a hearing. It did not come on for hearing until 10th and 11th July. 1972. At the hearing the parties were represented by Counsel and solicitors. The owners requested the arbitrators to state their award in the form of a special case. On 19th July 1972, the arbitrators refused in a letter which I must read in full:
"With reference to the Respondents' request that we should state our Award in the form of a Special Case we have to advise you that we have decided not to do so for the following reasons:
We do not feel that this is a proper case to be so stated.
Whilst it may well be that there is a question of law it is our feeling that, whilst we do not presume to usurp the functions of the Court, it is more suitable for decision by a commercial arbitration tribunal than by the Courts since its interpretation is so closely allied to commercial practice and the interpretation that commercial men would give it.
Counsel agreed that the Courts' decision would add nothing to the wealth of law which is already available to us and as there is no further principle of law involved we feel it unnecessary from the point of view of both time and expense to trouble their Lordships further.
We have also decided to delay the issue of our Award for fourteen days so that the parties may, if they wish, apply to the Court".
On 25th July 1972, the owners took out an originating summons before the Commercial Judge. They applied for an order under section 21 of the Arbitration Act 1950, that the arbitrators be directed to state their award in the form of a special case for the decision of the Court. They said that a question of law hadarisen in the course of the reference as to the assessment of the amount under clause 5 of the Agreement.
On 29th November 1972, Mr. Justice Kerr, the Commercial Judge, gave his decision in open Court. He declined to order the arbitrators to state their award in the form of a special case. He gave leave to appeal because the case had become a case of principle. So indeed it has been treated before us.
Mr. Staughton submitted to the Judge several factors which he suggested would be relevant in considering whether or not a case should be stated. Some of them I would accept. Others I would not. I prefer the criteria which Mr. Eckersley put before the Judge, and which he accepted. But I would venture to expand them somewhat.
When one party asks an arbitrator or umpire to state his award in the form of a special case, it is a matter for his discretion. If the issues are on matters of fact and not of law, he should refuse to state a case. If they raise a point of law, it depends on what the point of law is. He should agree to state a case whenever the facts, as proved or admitted before him, give rise to a point of law which fulfils these requisites:
The point of law should be real and substantial and such as to be open to serious argument and appropriate for decision by a Court of Law: see Nuttall and the Lynton and Barnstable Railway Co. (1900) 82 L.T. 17 - as distinct from a point which is dependent on the special expertise of the arbitrator or umpire, see Orion Compania Espanola De Seguros v. Belfort (1962) 2 Lloyds 257.
The point of law should be clear cut and capable of being accurately stated as a point of law - as distinct from the dressing up of a matter of fact as if it were a point of law.
The point of law should be of such importance that theresolution of it is necessary for the proper determination of the case - as distinct from a side issue of little importance.
If those three requisites are satisfied, the arbitrator or umpire should state a case. He should not be deterred from doing so by such suggestions as these: It may be suggested that a special case should be reserved for cases which are of general application (such as the construction of a standard form) or which would elucidate or add to the general principles of law (such as the doctrine of frustration or repudiation). I would not so limit the stating of a special case. In most cases the parties themselves are concerned, not with general principles, but with their particular dispute. If the case does involve a point of law which satisfies the requisites which I have mentioned, either of the parties should be enabled to have it decided by a Judge of the High Court. When the parties agree to arbitrate, it is, by our law, on the assumption that a point of law can, in a proper case, be referred to the Courts.
It may be suggested that if the point of law is only as to the construction of a particular document or of the words in it - as applied to the proved facts - then it should be left to the arbitrator or umpire. I do not agree. Most of the special cases are stated on points of construction. No one hitherto has thought that they should be refused on that ground.
It may be suggested that, if the point of law is only...
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