Inco Europe Ltd v First Choice Distribution (A Firm)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date30 September 1998
Judgment citation (vLex)[1998] EWCA Civ J0930-3
Date30 September 1998
Docket NumberLTA 98/5685/1

[1998] EWCA Civ J0930-3



Royal Courts of Justice


Lord Justice Hobhouse

Lord Justice Thorpe

Lord Justice Mummery

LTA 98/5685/1

Inco Europe Limited
Inco Alloys Limited
Inco Limited (A company incorporated under the laws of Canada)
First Choice Distribution (A Firm)
Logistics Planning Services Limited
Steinweg (Handelsveem Bv) (A company incorporated in the laws of the Netherlands)
Smeets Ferry Bv (A company incorporated in the laws of the Netherlands)

MR. A. GHAFFAR (instructed by Messrs Holman, Fenwick & Willan) appeared for the Appellants/Applicants.

MR. M. HALLIWELL (instructed by Messrs Hill Dickinson) appeared on behalf of the Respondent.


By a writ issued out of the Manchester District Registry of the High Court on 24th June 1997, the Plaintiffs in this action, Inco Europe Ltd and Inco Alloys Ltd, made a claim for damages in respect of the loss of a consignment of nickel cathodes being carried from Rotterdam to Hereford. One of the Defendants' named in the writ was Steinweg (Handlesveem BV). Steinweg made an application under s.9 of the Arbitration Act 1996 for the stay on against them on the ground that it was brought in respect of a matter which the Plaintiffs had agreed to refer to arbitration. The application was heard by HHJ Hegarty QC. He refused to grant the stay, holding that the arbitration agreement was "null and void or inoperative". (p.21 of the transcript) Steinweg seek to appeal from that decision. The Judge refused leave to do so. Steinweg have accordingly applied to this Court for leave to appeal.


It is a matter of credit to Mr Ghaffar, counsel for Steinweg, that he identified a problem which had previously been overlooked. He drew to the attention of the Judge, and has drawn to our attention, that it appears that s.107 of the 1996 Act and paragraph 37 of the Third Schedule to that Act have removed the jurisdiction of the Court of Appeal to entertain any appeal from a decision of a lower court or judge under s.9. Judge Hegarty refused leave to appeal on the basis that there is no jurisdiction and Mr Justice Tuckey in February of this year in a similar case ( Wealands v CLC Contractors ), having also had his attention drawn to the point, refused leave on the same basis. In neither instance was the matter the subject of developed argument such as has taken place before us.


By contrast, in the case Halki Shipping v Sopex Oils [1998] 2 AER 23 (decided in December of last year), the Court of Appeal assumed that it did have jurisdiction to entertain an appeal from a s.9 decision. The point of jurisdiction was not raised. Leave to appeal to the House of Lords was subsequently given. This would have provided the opportunity for an authoritative decision upon the question of jurisdiction but the appeal was withdrawn by consent before it could be heard.


The application for leave to appeal was referred to the full Court. It has been listed before us as an application with the appeal to follow if leave is granted. We have heard full argument both on the jurisdiction question and upon the merits of the appeal, should it be permissible. The first thing we have to decide is whether or not the Court of Appeal has a jurisdiction to entertain the application and appeal.




The point for the Plaintiffs can be very simply stated. The Third Schedule of the 1996 Act amended a large number of earlier statutes. One was the Supreme Court Act 1981. S.18(1) was amended so as to read -

"No appeal shall lie to the Court of Appeal -


(g) except as provided in Part I of the Arbitration Act 1996 from any decision of the High Court under that Part;



The 1996 Act, either in s.9 or elsewhere in Part I, makes no express provision for there to be any right of appeal from a decision under s.9 to the Court of Appeal. It is therefore submitted that under the amended s.18(1)(g) no appeal lies to the Court of Appeal. The argument of the Plaintiffs' is thus straight forward. The effect of the amendment is that unless an express right of appeal is given, as is found (albeit qualified) in other provisions of Part I of the 1996 Act, no appeal is to lie. This submission does not lose any of its force by its brevity. Indeed it is a submission which must be accepted unless some convincing answer arising within the permitted canons of statutory construction can be made to it.


A number of arguments have been advanced on behalf of Steinweg. The argument which needs to be considered is that which arises from an examination and consideration of the provisions of the 1996 Act itself. Mr Ghaffar submits that when this task is undertaken it will be seen that what might be termed the literal construction of the amended 1981 Act does not accord with the statutory intention disclosed by the 1996 Act and that the better view is that the intention of the 1996 Act is that the previously existing right of appeal (with leave) to the Court of Appeal in respect of decisions on applications for the stay of litigation has not been taken away by the 1996 Act.


In general terms, it is undoubtedly correct that the effect of an amendment to a statute should be ascertained by construing the amended statute. Thus, what is to be looked at is the amended statute itself as if it were a free-standing piece of legislation and its meaning and effect ascertained by an examination of the language of that statute.


However in certain circumstances it may be necessary to look at the amending statute as well. This involves no infringement of the principles of statutory interpretation: indeed it is an affirmation of them. The expression of the relevant parliamentary intention is the amending Act. It is the amending Act which is the operative provision and which alters the law from that which it had been before. It is the expression of the parliamentary will as to what changes in the law Parliament wishes to make. In the present case this approach is further justified by the reference in the amended 1981 Act back to the 1996 Act and by the terms of the 1996 Act itself.


As I stated earlier in this judgment the amending provision is s.107(1). The heading is "Consequential Amendments and Repeals". Sub-section (1) provides:

"The enactments specified in Schedule 3 are amended in accordance with that Schedule, the amendments being consequential on the provisions of this Act."


Schedule 3 is entitled "Consequential Amendments". It is therefore a legitimate consideration to ask whether an amendment abolishing a right of appeal from a decision refusing or allowing a stay of an action could properly be described as consequential upon the provisions of the 1996 Act.


Before amendment, paragraph (g) of s.18(1) of The Supreme Court Act had read -

"Except as provided by the Arbitration Act 1979, from any decision of the High Court -

(i) on an appeal under s.1 of that Act, on a question of law arising out of an arbitration award; or

(ii) under s.2 of that Act on any question of law arising in the course of a reference."


The 1979 Act is the Arbitration Act which radically amended the statutory scheme of judicial review of arbitration awards by the courts. It abolished the appeal by way of case stated and 'error of law on the face of the award' as a ground for setting aside an award. It substituted a system of reasoned awards open to only very carefully limited rights of appeal to the courts. As part of this scheme, special limitations were introduced upon rights of appeal to the Court of Appeal. It was these which were referred to in the unamended paragraph (g). Questions of the stay of litigation were dealt with in a different Act, the Arbitration Act 1996, which contained no special restrictions on rights of appeal to the Court of Appeal.


The status of arbitration clauses in English law has been gradually developed over the last century and a half. It has also been the subject of international conventions. At the time of the passing of the Arbitration Act 1950, the relevant international agreement requiring states to recognise and give effect to arbitration clauses was the League of Nations Protocol of 24th September 1923 and its corollary, the Geneva Convention on the Execution of Foreign Arbitral Awards dated 26th September 1927. This Protocol and Convention were scheduled to the 1950 Act. The stay of litigation where there had been a submission to arbitration was dealt with in s.4 of that Act. Sub-section (1) dealt with domestic arbitrations which did not come within the scope of the Protocol, in which case the court had a discretion whether or not to grant the stay. Sub-section (2) provided for the mandatory recognition and enforcement of arbitration agreements falling within the scope of the Protocol and therefore the stay of any legal proceedings in respect of a matter agreed to be referred unless the court was "satisfied that the agreement or arbitration has become inoperative or cannot proceed or that there is not in fact any dispute between the parties with regard to the matter agreed to be referred."


In June 1958 the United Nations Conference on International Commercial Arbitration adopted a fresh convention on the Recognition and Enforcement of Foreign Arbitral Awards, the New York Convention. The United Kingdom subscribed to and ratified that Convention as did very many other states. The Arbitration Act of 1975 was enacted to give effect to that Convention. The obligation of the United Kingdom was to recognise and give effect to arbitration agreements to which an individual who was a national or habitually resident in a state other than the United Kingdom, or an entity...

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