Limited Scope For Challenging English Maritime Arbitration Awards

Primera Maritime (Hellas) Ltd and others v. Jiangsu Heavy Industry Co. Ltd [2013] EWHC 3066 (Comm)

In this case, the Commercial Court reminded unsuccessful arbitration parties that appeals under s.68 Arbitration Act 1996 are only for extreme cases where the Tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected. The Court will not assist an appellant if the Tribunal reaches a conclusion on facts that the appellant does not like.

The background facts

The dispute arose out of the Claimant Buyers' termination of the contracts for two bulk carriers to be built at the Defendant's yard in China. The Claimants claimed that the Builder was in anticipatory repudiatory breach of the shipbuilding contract by refusing to deliver the ships by the contractual delivery date. Following nearly three weeks of an arbitration hearing, the Tribunal issued its Award supported by 84 pages of Reasons. The Tribunal dismissed the claims; it found that the Builder renounced the contracts in an email and at a meeting, but that the Claimants subsequently affirmed the contracts.

The Claimants applied to set aside the Award under s.68(2)(d) Arbitration Act 1996, which allows a party to challenge an Award for serious irregularity. The Claimants claimed that the Tribunal had failed to deal with two issues named by the Claimants as follows:

(i) That the Builder's renunciation was a continuing renunciation; and

(ii) That if the Builder had not renounced the contracts, the Claimants would have "flipped" the shipbuilding contracts, or sold them to a third party at a profit.

The Commercial Court decision

Mr Justice Flaux rejected these arguments. He approved the authorities directing him to read the Award in a reasonable and commercial way and not by nitpicking and looking for inconsistencies; in Pace Shipping v. Churchgate Nigeria Ltd, Mr Justice Teare had specifically deprecated a minute textual analysis.

In dealing with the Claimants' appeal, there were four questions for the Court:

(i) Whether the relevant point or argument was an "issue" within the meaning of the sub-section;

(ii) If so, whether the issue was "put" to the Tribunal;

(iii) If so, whether the Tribunal failed to deal with it; and

(iv) If so, whether that failure has caused substantial injustice.

The Court was not persuaded that the Tribunal had failed to deal with either of the Claimants' issues.

First, the Judge dismissed the claim that the Tribunal did not...