Re Phoenix Timber Company Ltd's Application
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE PARKER,LORD JUSTICE SELLERS |
| Judgment Date | 07 March 1958 |
| Judgment citation (vLex) | [1958] EWCA Civ J0307-2 |
| Date | 07 March 1958 |
| Court | Court of Appeal |
[1958] EWCA Civ J0307-2
In The Supreme Court of Judicature
Court of Appeal
The Master of the Rolls (Lord Evershed)
Lord Justice Parker
and
Lord Justice Sellers.
MR R. A. MacCRINDLE (instructed by Messrs. Middleton Lewis & Co.) appeared as Counsel for the Appellants.
MR BASIL ECKERSLEY (instructed by Messrs. Constant & Constant) appeared as Counsel for the Respondents.
: This is an appeal against an order made by the learned Master on the 30th January upon an application by way of originating summons on the part of a company, Phoenix Timber Company Limited, who had paid a certain sum of money into Court.
The circumstances, quite briefly, were that the Applicants, the Phoenix Timber company Limnited, were the consignees or receivers of a cargo of timber which had been carried in a vessel known as the Angel, from Archangel to London. The steamer was and is owned by the Respondents before this Court, Compania Isla De Oro Limitada of Costa Rica and she was voyaging under the terms of a time charter, the charterers being the Appellants in this Court, was Sovfracht of Moscow. The actual voyage was I think the subject of a sub-time charter, a transaction permitted by the original charter; but for present purposes no significance attaches to that circumstance. The bills of lading had been made out on behalf of the charterers, and the sum for freight prima facie was, therefore, upon the discharge of the goods anddelivery of the bills of lading, payable to the charterers.
But there is a clause in the timecharter, Clause 17, which provides as follows: "Owners to have a lien upon all cargoes and sub-freights belonging to the time charterers for all claims under this chartor" Now it seems that there had arisen a number of disputes between the owners and the charterers. It was said, for example, that the steamer had not the capacity which, according to another paragraph, Clause 28 of the charter, she was stated to have had. There was again a dispute about bunkering and the like. The result had been a refusal on the part of the charterers to pay sums which otherwise would have been due to the owners for hire.
And so it came about that when the consignees of the timber proceeded to pay what they owed for freight amounting to some £13,000, the owners claimed of that sum to have a lion for £9,000 or perhaps £10,000 in respect of unpaid hire. The actual sum has since been reduced I understand by a payment out to £6,000 or £6,500, but to that extent it is not now at all in doubt that there is a series of issues between owners and charterers which arise under the terms of the contract of charter - that is to say, whether there is a valid claim by the charterers against the owners for breach of warranties or other terms of the charter, on the one side, and, on the other, a claim for unpaid hire.
The charter contains an arbitration provision in these terms: "Any dispute arising under this charterparty shall be referred to arbitration in London. One arbitrator to be nominated by the owners and the other by the charterers", with provisions in ordinary form for appointment of an umpire. I have already said the disputes between the owners and the charterers are admittedly disputes arising under the charterparty.
When the matter was before the Master it was upon the application of the consignees, but in the ordinalry course he called upon the two contestants to say, aye or no, whether they claimed this money. So far as the owners are concerned, as Mr Eckersley informed us, their answer to that question was: Yes. they did, subject to the claim which they did not attempt todeny or conceal that as to some part of it there was an issue, the solution of which would or might seriously affect the quantum which the owners could recover by way of the alleged lion. Equally, on the part of the charterers an affirmative answer was given to the question: Did they lay claim to this money? But Mr McCrindle has made it clear that since this was an interpleader proceeding on the initiative of a third party, he was conscious that he must not prejudice the position which he desired to take under the charterparty (namely, that this claim was subject to the arbitration clause) by doing something which might otherwise be regarded as equivalent to taking a step in the action, and he informed us, therefore, that though he did pat the point thathe claimed the sum, and indeed alleged that the lien was not one which could be asserted against him, he submitted that the issue which arosewas one within the arbitration clause and which should accordingly be referred by the parties to arbitration.
We were told that the hearing before the Master took half an hour and that by far the greater part of that time was spent in looking into the terms of the contract and seeking how the dispute arose, and so on, and that the question whether this matter should go to arbitration or be referred to the arbitrament of the Commercial Court was dealt with somewhat briefly at the end. As my Brother Sellers pointed out, on the fact of it this dispute is of a Lind eminently suited for trial in the Commercial Court and the advantages of despatch and economy of procedure as well as costs in that Court may perhaps not always be sufficiently appreciated. Still it remains the fact that these parties when they made their bargain included as part of it the arbitration clause.
The question, therefore, is, in brief, should they now be held to that part of the bargain or should this matter be determined by the Court notwithstanding the bargain? The question is dealt with expressly by Section 5 of the Arbitration Act, 1950: "Where relief by way of interpleader is granted and it appears to the High Court that the claims in question are matters to which an arbitration agreement, to which the claimants are parties, applies, the High Court may direct the issue between the claimants to be determined in accordance with the agreement." On the face of it that would appear to give an unlimited discretion to the High Court to say whether in all the circumstances of the case the issue should be determined in accordance with the arbitration clause or not. Although that section re-enacts the section in the 1934 Act, there appears to be no authority which...
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