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Judge's arbitration ruling saves the golden goose

News / / Judge's arbitration ruling saves the golden goose

The facts of the underlying dispute are that a barge, the Labhauler, listed at sea, losing its cargo overboard, and subsequently sinking in 2007 A claim by cargo interests against the vessel owners was settled, but the vesselrsquos PampI Club denied cover nbspOwners ignored a London arbitration agreement in the PampI Clubrsquos Rules and brought proceedings against the Club in Canada in 2008 for CAD 625,000 (c pound370,000) The Canadian Supreme Court ordered that these proceedings be stayed in 2010, in recognition of the London arbitration commenced by the Club, also in 2008, for a declaration of non-liability Fast forward to July 2017 and, after seven years of apparent inactivity, the Assured sought to appoint an arbitrator in the London arbitrationThe Club sought and duly obtained an award from the Tribunal that the Assuredrsquos claim was time-barred by the contractual andor the statutory limitation periods, alternatively that its claim should be dismissed for inordinate and inexcusable delay under s41(3) Arbitration Act 1996nbspThe Assured appealed to the Commercial Court, seeking to overturn the awardon the grounds of procedural irregularity under s68 of the Act, on the basis that the Tribunal had exceeded its jurisdiction in finding that the Assured was a ldquoclaimantrdquo within the meaning of the term in s41(3), such that the arbitrators were entitled to dismiss its claim andon a point of law under s69 nbspof the Act, on the grounds that the claim was not time-barred owing to the Club having commenced arbitration for a negative declarationButcher J dismissed the challenge, without a hearing, on the basis that the arbitratorsrsquo decision on the law was not obviously wrong and nor did it give rise to a substantial injustice to the applicant AssurednbspMales J made short shrift of dismissing the Assuredrsquos oral applications to set aside Butcher Jrsquos decision, and for permission to ask the Court of Appeal for leave to appeal the award In doing so, the judge referred to the ldquoabsurdityrdquo of the Assuredrsquos position, and its ldquoinsuperable dilemmardquo on account of its being required to argue seemingly conflicting positions On the one hand (for the s68 case), the Assured argued that it was not the claimant in the arbitration and, therefore, that s41(3) did not apply On the other hand (for its s69 case), it sought to argue that its claim had in effect been referred to arbitration and, therefore, was not time-barredThe Judge did not pull his punches either in expressing his dismay at the partiesrsquo combined costs of pound150,000 in this oral application alone In his comments about ways in which the Court should in future handle applications for leave to appeal arbitrations more efficiently, he continued the long line of English Court judgments that give deference to the consensual nature of arbitration, referring to the over-arching need not to permit the cost of procedural applications to become so disproportionate nbspAs the judge put it ldquoThere is after all such a thing as killing the golden gooserdquoAs a postscript though, interestingly, Males J indicated that if the s69 application had stood alone he might have been inclined to grant permission to appeal A glimmer of encouragement, perhaps, as regards the English Courtrsquos lsquocase-by-casersquo approach in an otherwise lsquounfriendlyrsquo judgment for those who may be dissatisfied with the outcome of arbitration

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