INTERNAUT SHIPPING GmbH and SPHINX NAVIGATION Ltd of LIBERIA and FERCOMETAL SARL/
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rix,Lord Justice Sedley,Lord Justice Mummery |
| Judgment Date | 17 June 2003 |
| Neutral Citation | [2003] EWCA Civ 812 |
| Docket Number | Case No: A3/2002/1411 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 June 2003 |
[2003] EWCA Civ 812
Lord Justice Mummery
Lord Justice Sedley and
Lord Justice Rix
Case No: A3/2002/1411
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Justice David Steel
Royal Courts of Justice
Strand,
London, WC2A 2LL
Mr Hugo Page QC (instructed by Messrs Penningtons) for the Defendant/Appellant
Mr Simon Bryan (instructed by Messrs Ince & Co) for the Claimant/Respondent
The problem
These proceedings were commenced to elucidate the parties to a voyage charterparty and an arbitration. The charterparty, which is on the Gencon form, is dated Hamburg, 27 December 1994 and provided for a voyage by the vessel Elikon from Gdansk to three ports in Algeria. It is made between Fercometal SA as charterer (there is no dispute about that) and "Sphinx Navigation Ltd, Liberia c/o Internaut Shipping GmbH" as owner ("Sphinx" and "Internaut" respectively). However, Internaut signed the charterparty under the heading "Owners" without qualification. This has led to a dispute as to whether Internaut and/or Sphinx are parties, qua owner, to this charterparty. The charterparty contained an arbitration clause providing for arbitration in London under English law. An arbitration has been commenced by the "owners" under the charterparty, but the uncertainty as to the identity of the owner has in due course led to uncertainty as to the identity of the party claiming arbitration.
Sphinx, a Liberian company, is the registered owner of the Elikon. Internaut is a small broking firm in Hamburg. There is no relationship between Sphinx and Internaut. Sphinx had time chartered its vessel by a time charter dated 19 December 1994 to Primary Industries ("Primary"). The time charter, which was for a trip to the Western Mediterranean, was of the whole vessel which had a summer deadweight of 28,000 tonnes, but Primary only had need of it for the carriage of 12,000 tonnes of steel rods from Klaipeda to Algeria. It is Internaut's case that Primary and Internaut entered into an oral joint venture whereby Internaut would fix the balance of the space of the vessel and that the costs and revenue of any additional cargoes would be shared between them. Internaut says that it fixed the charterparty to Fercometal pursuant to that joint venture. There is no documentary evidence of this joint venture.
In principle, of course, only parties to the charterparty and thus to the arbitration agreement contained in it can refer a dispute to arbitration, or have arbitration claimed against them.
During the voyage there was delay at the discharging ports and this led to a claim against Fercometal for demurrage and/or damages for detention. The arbitration was commenced on the instructions of Internaut's P & I Club, Assuranceforeningen Gard of Norway ("Gard"). On 6 April 1995 Gard instructed Mr Paul Herring of Messrs Ince & Co to commence arbitration on behalf of the owner under the charterparty. There is no documentary evidence of those instructions. On 11 April 1995 Mr John Schofield sent a fax to Mr Herring headed "Elikon– C/P 27.12.94" as follows:
"Thank you for the message left on my answering machine earlier today.
"I would be very pleased to and do hereby accept appointment on LMAA terms as Arbitrator to be appointed by your Clients, the Disponent Owners of this vessel."
The reference in that fax to "Disponent Owners" is some evidence that Gard's instructions to Mr Herring and Mr Herring's appointment of Mr Schofield were themselves on behalf of "disponent owners". The message on Mr Schofield's answering machine has not survived, and there is no other documentary evidence of Mr Schofield's appointment. In the parlance of the shipping trade, a disponent owner is someone, other than the registered owner, who has title to dispose of the services of a vessel.
On 21 April 1995 Gard faxed Fercometal, with copies to Ince & Co (and to a Bremen insurer), as follows:
"M/V Elikon– Gdansk/Oran – C/P DD 27.12.94
Demurrage at discharge port – USD 148,916.67
…Pursuant to Clause 39 of the governing charterparty we hereby give notice that we have appointed Mr John Schofield as owner's arbitrator."
It will be observed that that notice did not refer to Gard's member as a "disponent owner".
On 24 April 1994 Penningtons, acting for Fercometal, notified Gard of its appointment of Mr Bruce Harris as Fercometal's arbitrator.
There was then an interval of over a year before the arbitration got under way. It will be necessary to refer below to some of the events which took place during that year. For the present it will suffice to say that it was only on 9 September 1996 that points of claim were served in the arbitration, and they were then served by Ince & Co in the name not of Internaut, but of Sphinx! They were served under cover of a letter from Ince & Co to Penningtons, copied to the two arbitrators, which read as follows:
"We refer to our previous correspondence in this matter which appears to rest with your fax of 23 rd November 1995. You will recall that Owners appointed Mr John Schofield and Charterers appointed Mr Bruce Harris as arbitrators in this matter. Our clients have decided to pursue their claim for demurrage by way of arbitration in London against your clients."
The points of claim name Sphinx as "Claimants (Owners)" and go on to plead that the Elikon was let "by her owners Sphinx…("Owners")" under the charterparty. The pleading was subscribed as "Served…by Messrs Ince & Co…Solicitors for the Claimants". The status of Sphinx as owner was admitted in Fercometal's points of defence and counterclaim. Fercometal's evidence states that "pleadings, correspondence and Witness Statements…were carried on for Sphinx as Owners of the vessel". Those pleadings included points of reply and defence to counterclaim and amended and re-amended versions of that document. Various preliminary issues were dealt with in an interim award dated 23 March 1999, made in the name of an arbitration between Sphinx and Fercometal and resulting in decisions in Sphinx's favour. Mr Robert Gaisford had in the meantime been appointed as third arbitrator, presumably in an arbitration at least purportedly between Sphinx and Fercometal.
It was not until December 2000 that, as a result of disclosure pressed for by Fercometal and resisted by the "owners", it finally became apparent that Sphinx and Internaut had different interests and were, or might be, unconnected. It is said by Mr Herring that all that had happened in the meantime was a mere "misnomer" and that Penningtons always knew that Ince & Co had been instructed by Internaut. It is said by witnesses for Fercometal that they had always believed that Sphinx was the owner under their charterparty and that Internaut was involved, if at all, only as Sphinx's manager or agent.
Matters came to a head on 19 December 2000 when Ince & Co (Mr Herring) wrote a letter to the arbitrators. It was in part responding to a letter dated 17 August 2000 from Mr Schofield on behalf of the tribunal. In that letter Mr Schofield asked Ince & Co to say what the connection was between Sphinx and Internaut, and whether they accepted that all documents in the possession and control of Internaut were disclosable. In Ince & Co's letter Mr Herring wrote as follows:
"As a result of investigating the questions raised by Mr Schofield, it has come to light that although the arbitration was commenced by us, on behalf of disponent owners, Internaut, another party (i.e. Sphinx) was named as the Claimants in the claim submissions. This is a misnomer and our proposals for rectifying the position are set out below…
A. For the avoidance of any doubt, Internaut request that Mr Schofield act in respect of Internaut's claim in the existing arbitration against Fercometal.
B. Amendments to the Points of Claim so that the Claimants are identified as Sphinx Navigation and Internaut are now necessary. Although we believe that it is clear from the terms of our appointment of Mr Schofield that he was appointed on behalf of disponent Owners, and it has been known to the parties throughout that we were acting on behalf of and are instructed by Internaut, we consider that the course to be adopted is for Internaut to be named as claimant in addition to Sphinx to cover the eventuality that Sphinx are held to be the disponent owner under the charter with Fercometal. Internaut/Sphinx therefore seek permission from the Tribunal to amend the Points of Claim to add Internaut firstly on the basis that there has simply been a misnomer and in the alternative on the basis that they are being joined to the proceedings…
In any event, in order to protect Internaut's position, (without prejudice to application for leave to amend the Points of Claim/joinder application), we intend to appoint Mr Schofield on behalf of Internaut and call upon Penningtons to appoint Mr Harris."
On the same day, Ince & Co faxed Mr Schofield as follows:
"Elikon– C/P 27.12.94
"Further to our earlier fax [sc the letter of the same day], we write to appoint you on behalf of our clients, Internaut Shipping GmbH in relation to their dispute with Charterers, Fercometal…
"This appointment is made without prejudice to our application to amend the Points of Claim and Joinder application in the existing application.
"Since the limitation period is approaching, we would be grateful if you could confirm by return whether you accept this appointment."
By return fax of the same date Mr Schofield said...
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