Staying Proceedings To Arbitration: Full Judicial Consideration Test Confirmed

We have successfully represented The Lisheen Mine and Lisheen Milling Limited in two separate applications to stay High Court proceedings to arbitration in London under the London Maritime Arbitration Association Rules. The applicants were the Dutch shipping interest, Vertom. Our team, led by Rory Kirrane, also represented the Lisheen entities in Vertom's London arbitration references.

The disputes centred on whether Lisheen had entered in to either a charterparty on 'Gencon' terms for successive voyages with Vertom, or else a master contract of affreightment, for shipment of zinc ore to various European ports with associated 'Gencon' voyage charters. The upshot of the case against Lisheen was that it had agreed to the 'Gencon' arbitration clause providing for London arbitration under English law.

A key contention of Vertom was that the Irish Court should look at the question of contract formation and incorporation of an arbitration clause by reference on a prima facie or initial basis only rather than by way of full judicial consideration. The issue, therefore, of contract formation was, Vertom claimed, properly one for the London arbitration tribunals and not the Irish Courts.

Vertom sought to stay the Irish proceedings to arbitration under the Arbitration Act 2010 - which adopts the UNCITRAL Model Law - on the basis of a prima facie test. Article 8.1 of the Model Law requires the Court to "refer the parties to arbitration unless it finds that the agreement [to arbitrate] is null and void, inoperative or incapable of being performed".

In addition to clarifying the appropriate test on an application to stay, the recent decision of Mr Justice Cregan of 12 January 2015 is one of very few judgments of the Irish Courts addressing the question of vessel fixture and charterparty formation.

Dismissing the Vertom applications to stay, Mr Justice Cregan held that the Court was entitled to determine the question of whether the parties had agreed to arbitrate on a full judicial basis, rather...

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