Yamashita-Shinnihon Steamship Company Ltd v L'Office Cherifien des Phosphates and Unitramp SA
|Lord Templeman,Lord Goff of Chieveley,Lord Jauncey of Tullichettle,Lord Browne-Wilkinson,Lord Mustill
|16 December 1993
|Judgment citation (vLex)
| UKHL J1216-3
|16 December 1993
|House of Lords
 UKHL J1216-3
Lord Goff of Chieveley
Lord Jauncey of Tullichettle
House of Lords
On 26 September 1984 the appellants chartered the vessel "Boucraa" to carry a cargo of sulphur which was discharged at its destination on 24 November 1984. On 5 August 1985 the respondent owners of the vessel began arbitration proceedings under the charter agreement claiming damages for corrosion to the vessel alleged to have been caused by the cargo. The Courts and Legal Services Act 1990 was enacted on 1 November 1990. Section 102 made an amendment to the Arbitration Act 1950 and the amendment came into force on 1 January 1992. The amendment inserted the following section in the Act of 1950 and, so far as material, provides as follows:
"13A(1) Unless a contrary intention is expressed in the arbitration agreement, the arbitrator or umpire shall have power to make an award dismissing any claim in a dispute referred to him if it appears to him that the conditions mentioned in subsection (2) are satisfied.
(2) The conditions are:
(a) that there has been an inordinate and inexcusable delay on the part of the claimant in pursuing the claim, and
(b) that the delay —
(i) will give rise to a substantial risk that it is not possible to have a fair resolution of the issues in that claim; or
(ii) has caused, or is likely to cause, or to have cause, serious prejudice to the respondent."
On 13 January 1992 the charterers applied to the arbitrator under section 13A of the Act of 1950 as amended. On 13 August 1992 the arbitrator dismissed the owners' claim for damages in the arbitration for want of prosecution. The owners concede that the arbitrator had jurisdiction to make the order. The owners submit that the arbitrator made an error of law; he took into account delay between 5 August 1985 when the owners began the arbitration proceedings and 1 January 1992 when section 13A came into force; he should have confined himself to deciding whether the delay between 1 January 1992, when section 13A came into force, and 13 January 1992 when the charterers applied for the claim to be dismissed, was "inordinate and inexcusable". If he had asked himself that question he would have been bound to allow this stale claim to proceed.
The provisions of section 13A admittedly afford no support for the owners' submissions. The owners rely on the presumption against attributing to Parliament an intention that a statute shall have retrospective effect. My Lords, the owners never had a right to render impossible the fair resolution of the arbitration issues or a right to cause serious prejudice by inordinate and inexcusable delay. The Act of 1990 could not, therefore, retrospectively deprive the owners of any such right. Before 1 January 1992 the charterer had no remedy if the owners rendered a fair resolution of the issues impossible or caused serious prejudice by inordinate and inexcusable delay; after 1 January 1992 the charterers possessed the remedy afforded by section 13A and that remedy has been granted to them.
For these reasons and for the reasons given by my noble and learned friend, Lord Mustill I would allow this appeal.
For the reasons given in the speech to be delivered by my noble and learned friend, Lord Mustill, which I have had the opportunity of reading in draft and with which I agree, I would allow this appeal.
I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Mustill. For the reasons he gives I, too, would allow this appeal.
For the reasons given in the speech to be delivered by my noble and learned friend, Lord Mustill, I too would allow this appeal.
On 26 September 1984 Yamashita-Shinnihon Steamship Co. Limited chartered from L'Office Cherifien des Phosphates and Unitramp S.A. (it makes no difference which) the vessel "Boucraa" to carry a cargo of sulphur from Vancouver to Aqaba. I will call the parties "the shipowners" and "the charterers" respectively. The vessel loaded very soon afterwards and on completion of the voyage towards the end of November 1984 discharged the cargo at Aqaba. Within two days the shipowners complained that the vessel's cargo holds had been damaged due to excess moisture caused by watering of the cargo whilst it was shipped at Vancouver. If such excess was indeed present there was a risk that the vessel would suffer severe corrosion. This complaint was followed up by a letter from the shipowners' solicitors on 17 July 1985, and within three weeks the parties had agreed to appoint Mr. M. J. Baker-Harber as the sole arbitrator, pursuant to a clause in the charterparty which provided that disputes thereunder should be arbitrated in London. Points of claim were delivered promptly, and points of defence were forthcoming on 28 February 1986, together with a request for further and better particulars of the points of claim. The shipowners responded with their own request for particulars, and, some months later, points of reply. This was good going, and there was no reason why the dispute should not have come to a hearing in proper time. Sadly, apart from some desultory correspondence about security in the course of which the charterers first of all put their solicitors in funds for such security and then having heard nothing took the moneys back, nothing happened until April 1991, when the shipowners' new solicitors wrote to the arbitrator proposing a preliminary issue on the meaning of a clause in the charterparty.
So far, the story would have caused regret but not undue surprise to anyone practising arbitration during the concluding decades of the Twentieth Century. What would, however, have caused great remark was that on 13 January 1992 the charterers applied to the arbitrator to dismiss the shipowners' claim for want of prosecution. Such an application, if made during the 1970's or 1980's, would have been rejected out of hand, yet it happened that in August of the same year the arbitrator by an interim award, under powers recently conferred by the new section 13A of the Arbitration Act 1950, which had been introduced into the existing legislation by the Courts and Legal Services Act 1990, dismissed the shipowners' claim. The grounds stated in the award were that the shipowners had been guilty of inordinate and inexcusable delay in advancing the arbitration which had created a real risk of an unfair resolution of the dispute. If these had been proceedings in the High Court the decision of the arbitrator would I believe have been unassailable. The important question has, however, been raised by the shipowners whether the arbitrator was entitled to take into account any pan of the delay which preceded the coming into force of the new powers, for if he was not it was plain that the award could not be sustained. Leave to appeal to the High Court was properly granted, and the appeal was heard in the Commercial Court by Saville J. The learned judge concluded that the antecedent delay should not have been taken into account and varied the award so as to reject the application to dismiss the claim. Against this decision the charterers appealed. In the Court of Appeal Sir Thomas Bingham M.R. and Russell L.J. agreed with Saville J., whilst Beldam L.J. was of the opposite view. The charterers now appeal to your Lordships' House.
This difference of opinion, expressed as it is in the arbitrator's reasons and four judgments, all of great weight and clarity, show that the point is finally balanced. Two very able arguments from counsel have further illuminated the question without making it any more easy to answer. In the end, however, I have concluded that the issue may be decided without recourse to any great weight of doctrine and that the arbitrator was right to treat it as essentially a matter of impression. I also agree with him that the statute did enable him to take into account delays occurring before it came into force. To explain my reasons, I must first set out the legislative history of the new powers.
Those practising law in England are well aware of the jurisdiction to dismiss stale actions for want of prosecution created by the courts during the past twenty five years. As the present case illustrates, however, many participants in English arbitration come from abroad. To such persons the concept may be wholly unfamiliar, and the idea that it might be applied in the field of arbitration may seem on first acquaintance very strange. For this reason, and not only because the High Court practice forms an indispensable background to the practice of the new legislation, it is necessary to sketch the history of this jurisdiction.
For present purposes we may begin with the year 1968. Until then, it had been taken for granted that the remedy for dilatory progress in legal proceedings lay in the Rules of Court which enabled a defendant offended by slow progress to apply for a peremptory order requiring the plaintiff to set affairs in motion or suffer the consequences. It was also a convention amongst practitioners that such an order would not be sought unless notice of what the defendant had in mind was first given to the plaintiff's advisers. Exponents of this mild regime were given an unwelcome surprise by , where an entirely new set of principles, derived not from the Rules of Court but from judicial law-making, were brought into existence. It was no longer a sufficient answer for the plaintiff to say that since the defendant had not complained he could have had nothing to...
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