Willie (Charles M.) & Company (Shipping) Ltd v Ocean Laser Shipping Ltd (Smaro)
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE RIX,MR JUSTICE RIX |
| Judgment Date | 29 October 1998 |
| Judgment citation (vLex) | [1998] EWHC J1029-3 |
| Docket Number | 1998 Folio 966 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 29 October 1998 |
[1998] EWHC J1029-3
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
St Dunstan's House
Mr Justice Rix
1998 Folio 966
1998 Folio 1016
In the matter of the arbitration Acts 1950-1979
And
In the matter of an Arbitration
Mr M Nolan, instructed by Messrs Swinnerton Ashley-Claydon, London, EC2V 6HH, appeared for the Plaintiffs (1998 Folio 966) and for the Defendant Respondents (1998 Folio 1016).
Mr S Berry, instructed by Messrs Holman Fenwick & Willan, London, EC3N 3AL, appeared for the Defendants (1998 Folio 1016) and for the Plaintiff Claimants (1998 Folio 1016).
WITH REFERENCE TO RSC ORDER 68 RULE 1 AND THE PRACTICE DIRECTION OF THE MASTER OF THE ROLLS DATED 9TH JULY 1990 [1990] 1 WLR 1126:
I certify that the attached records my Judgment and direct that no further note or transcript need be made.
COPIES OF THE TEXT WILL ALSO BE AVAILABLE IN WP51 ON PROVISION OF A CLEAN 3.5" FOPPY DISK. APPLY TO MECHANCIAL RECORDING DEPT, RCJ
There are before me two originating summonses which between them raise three questions about the jurisdiction of arbitrators. How, and in particular, when is an arbitration commenced? How, if at all, can a party to an arbitration agreement join an existing arbitration between other parties to the same arbitration agreement? Can arbitrators change their minds about giving leave to amend when once they have informed the parties of their decision?
These questions originate in a Memorandum of Agreement on the Saleform 1987 form dated 1 April 1990 made between Charles M Willie & Co (Shipping) Ltd as sellers and George Roussos Sons SA "or company to be nominated" as buyers of the motor vessel Celtic Ambassador which, following delivery under the MOA, was renamed the Smaro. In the event the company nominated to take delivery and transfer of the vessel was Ocean Laser Shipping Ltd, and it was in that name that the bill of sale dated 26 April 1990 was made out. On 21 November 1990 the sellers ("Willie") received a letter from Messrs Holman Fenwick & Willan ("HFW") who said that they acted for George Roussos Sons SA ("Roussos") as buyers of the vessel under the MOA, and enquired about an engine stoppage back in January 1988. Correspondence developed in which an allegation was made that Willie had been in breach of the MOA because at the time of delivery the vessel was suffering from average damage affecting class which had led to engine breakdowns in May 1987 and January 1988 (and again after delivery) and which had not been reported to class. Messrs Swinnerton, Ashley-Claydon ("SAC") were involved in that correspondence as solicitors to Willie.
On 12 March 1992 HFW telexed SAC to invite Willie to agree on the appointment of a single arbitrator under the arbitration agreement contained in clause 15 of the MOA. HFW continued to say that they represented Roussos as buyers. Three names were put forward to enable one of them to beagreed as a sole arbitrator. HFW said that if none of them could be agreed, then Willie should appoint their own arbitrator.
It is common ground that that telex marked the commencement of an arbitration between Roussos and Willie.
Clause 15 of the MOA provided as follows:
"15. Arbitration
If any dispute should arise in connection with the interpretation and fulfilment of this contract, same shall be decided by arbitration in the city of LONDON and shall be referred to a single Arbitrator appointed by the parties hereto. If the parties cannot agree upon the appointment of a single arbitrator, the dispute shall be settled by three Arbitrators, each party appointing one Arbitrator, the third being appointed by The London Maritime Arbitrators Association…
If one of the parties fails to appoint an Arbitrator—either originally or by way of substitution—for two weeks after the other party having appointed his Arbitrator has sent the party making default notice by mail, cable or telex to make the appointment, the party appointing the third Arbitrator shall, after application from the party having appointed his Arbitrator, also appoint an Arbitrator on behalf of the party making default…"
On 18 March 1992, after some intervening correspondence, SAC replied:
"Concerning your initiation of arbitration, our clients do not wish any of the 3 gentlemen you have proposed to sit as sole Arbitrator and accordingly when you have effected an appointment of your clients' arbitrator and given us due notification of the same we shall attend to the appointment of the Respondents' arbitrator within 14 days thereafter in accordance with clause 15…
On 3 April 1992 HFW informed SAC that they had appointed Mr Kazantzis as Roussos's arbitrator, and on 6 April SAC replied to say that they had appointed Mr Newcomb as Willies's arbitrator.
HFW's telex of 20 May 1992
Then on 20 May 1992 there came the following telex from HFW. It is one of the critical documents in the case and the primary basis for the contention of Ocean Laser Shipping Ltd ("Ocean Laser") that they as well as Roussos had commenced arbitration against Willie (well) before the expiry of the limitation period. The telex was addressed to Mr Kazantzis and was copied to Mr Newcomb and to SAC, and read as follows:
"We refer to our correspondence…appointing you as arbitrator on behalf of G Roussos Sons SA. You have of course accepted this appointment.
"We should be grateful if, for the avoidance of doubt, you would also accept appointment as arbitrator, again in respect of all disputes arising under the above captioned MOA with Charles M Willie and Co (Shipping) Limited, on behalf of Ocean Laser Shipping Limited."
To that telex SAC replied by letter dated 21 May 1992 to Mr Kazantzis, with copies to Mr Newcomb and to HFW:
"We are in receipt of Messrs Holman Fenwick and Willan's telex yesterday in which they purport to extend your appointment to cover any claims by a party identified as Ocean Laser Shipping Limited.
"Please be advised that
1. We have no idea who Ocean Laser Shipping Limited.
2. The MOA dated the 1st April 1990 is a contract between our clients and G Roussos Sons SA who have initiated this arbitration.
3. Our clients have no contract and consequently there is no agreement to arbitration with Ocean Laser Shipping Limited.
"Thus we dispute the validity of your appointment on behalf of this company."
On 3 June 1992 Mr Kazantzis replied to HFW with copies to Mr Newcomb and SAC to say that he was willing to accept appointment as Ocean Laser's arbitrator, but that in the light of SAC's letter he looked forward to further advice about the contractual basis of his appointment.
It would have been easy enough for either Willie or Ocean Laser (or Roussos) to have pointed out to their respective solicitors (if they were unaware) as well as arbitrators that Ocean Laser were the ultimate buyers of the vessel under the MOA. Unfortunately, however, they do not appear to have done so. On the limited evidence before me, I do not know why that was so. The affidavit of Mr Swinnerton merely states that this correspondence was being handled by his partner Mr Ashley-Claydon, and adds "I assume that he did not have a copy of the Bill of Sale before him". Willie, however, would have known the true position, as of course would those instructing HFW. Moreover, Mr Ashley-Claydon presumably had a copy of the MOA, in which the buyers were stated to be not merely Roussos, but Roussos "or company to be nominated". If the matter had been sorted out at that time, then none of the ensuing complications would have occurred.
As it is, SAC's reaction to the appointment by Ocean Laser of Mr Kazantzis as their arbitrator went unanswered. In due course, but not until 5 November 1993 Roussos and Ocean Laser served their points of claim on Willie. Paragraph 1 pleaded that Roussos had agreed to purchase the vessel under the MOA "on its own behalf and or on behalf of" Ocean Laser: both claimants were defined as the "buyers"for the purposes of the pleading.
On receipt of these points of claim SAC wrote to the arbitrators and HFW as follows:
"In May 1992 our opponents 1 sought to appoint Mr Kazantzis as Arbitrator on behalf of Ocean Laser Shipping Limited and we made clear in our letter dated 21st May 1992 that neither we nor our clients had any idea as to the identity of Ocean Laser and that there was no agreement to arbitrate with that company.
"Nothing further has been provided by our opponents at all as to Ocean Laser and accordingly our clients' straightforward position is that there is no arbitration agreement with this company and Sellers and so no basis for you and your co-arbitrator to deal with any claim this company may have.
"As you and your co-arbitrator will see, no explanation at all is offered in the Points of claim as to the alleged involvement of Ocean Laser and we can see no basis at all for this party to be included as a Claimant and any Defence served by us will be to the claim of Messrs G Roussos Sons SA only."
It appears from this letter that SAC had consulted their clients, Willie, about the purported claim of Ocean Laser. Since Willie must have known that they had transferred their vessel to Ocean Laser, it is hard to understand their "straightforward position". Be that as it may, HFW's reply is the other critical document relied on by Ocean Laser as supporting their claim to have commenced arbitration proceedings against Willie.
HFW's letter dated 12 November 1993.
HFW responded to SAC's letter by the following...
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