Marine Contractors Inc. v Shell Petroleum Development Company of Nigeria Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ACKNER,LORD JUSTICE O'CONNOR |
| Judgment Date | 24 February 1984 |
| Judgment citation (vLex) | [1984] EWCA Civ J0224-4 |
| Docket Number | 84/0083 |
| Court | Court of Appeal (Civil Division) |
| Date | 24 February 1984 |
[1984] EWCA Civ J0224-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM AN ORDER OF MR JUSTICE STAUGHTON
Royal Courts of Justice
Lord Justice Ackner
and
Lord Justice O'Connor
84/0083
MR DONALD KEATING Q.C. and MR RICHARD AIKENS, instructed by Messrs Ince & Co., appeared for the Appellants (Plaintiffs).
MR NICHOLAS PHILLIPS Q.C. and MR JOHNATHON SUMPTION, instructed by Messrs Lovell, White 7 King, appeared for the Respondents (Defendants).
This is an appeal against the decision, on 10th June 1983, of Mr Justice Staughton. He refused an application for leave to appeal under section 1 of the Arbitration Act 1979.
This application was made on behalf of the appellants, Marine Contractors Inc., who were the claimants in the arbitration and the contractors in the project of laying a pipeline. Shell Petroleum Development Company of Nigeria Limited are the respondents to this appeal and the respondents in the arbitration and they were also the employers in the pipe-line contract. The project was to lay a pipe-line some 65 miles long in Nigeria in swampy conditions, the materials to be supplied by the respondents. In the course of carrying out the work it became obvious there were defects in the joints to the pipes and a considerable amount of work had to be re-done. In the arbitration the appellants claimed the cost of that work. The arbitrator, His Honour Edgar Fay Q.C., was asked to make an interim award deciding certain preliminary issues which had been agreed between the parties. When he made his interim award dealing with those preliminary issues he expressly stated that the reasons which he gave in a separate document were incorporated in it.
Three questions were raised for the decision of Mr Justice Staughton. These were, firstly, whether the parties had entered into an exclusion agreement within the meaning of section 3 of the Arbitration Act 1979, secondly, if so, did that agreement apply to an interim award? Thirdly, if so, did the parties, by asking the arbitrator for reasons waive their rights to rely on the exclusion agreement? As regards the existence of the exclusion agreement the relevant contractual document, exhibit 5 page 396, contained the following term: "Arbitration shall be conducted in London under the Rules of the International Chamber of Commerce. The governing law shall be that of Nigeria". The Rules of the International Chamber of Commerce (I.C.C.) provide, by Article 24, as follows: "Finality and enforceability of award. 1 The arbitral award shall be final. 2 By submitting the dispute to arbitration by the International Chamber of Commerce, the parties shall be deemed to have undertaken to carry out the resulting award without delay and to have waived their right to any form of appeal insofar as such waiver can vailidly be made".
Mr Justice Staughton, following the as yet unreported decision of Mr Justice Leggatt on 12th May 1983 in the case of Arab African Energy Corp. Limited v. Olieprodukten Nederland B.V., held that the agreement that arbitration shall be conducted under the Rules of the I.C.C. and in particular Article 24 thereof amounted to an exclusion agreement, and against this decision the appellants do not appeal. Thus, the first question we have to decide is, does the exclusion agreement extend to the interim award?
Mr Phillips is clearly right when he submits that when parties agree to arbitration by the I.C.C. they deliberately accept an alternative tribunal to the courts because the I.C.C. Rules prohibit resort to municipal courts, so far as such prohibition may be lawful. The appellants submit that their waiver of their rights of appeal only applies to a final reward, and Mr Keating repeats his submission which he made to Mr Justice Staughton; that the award contemplated by the I.C.C. has five characteristics. First, it will be binding so as to produce an estoppel per rem judicatam. Secondly, it will be an award in respect of relief sought in the arbitration whether debt, damages or otherwise. Thirdly, it will finally determine the dispute, or at any rate an identifiable part of the dispute. Fourthly, it will be such as can be carried out. Fifthly, it will be such as can be enforceable at law. Mr Keating submitted to Mr Justice Staughton, as he did before us, that the present...
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Sumukan Ltd v Commonwealth Secretariat
... ... Ltd A Merrill Communications Company 190 Fleet Street, London EC4A 2AG Tel No: 020 ... He followed Leggatt J's reasoning in Marine Contractors Inc v Shell Petroleum Development Co. of Nigeria Ltd [1984] 2 Lloyds Rep 77 ... He made clear that ... ...