3PLR – FOOD CORP OF INDIA V. ANTCLIZO SHIPPING CORP

POLICY, PRACTICE AND PUBLISHING, LAW REPORTS  3PLR

[PDF copy of this judgment can be sent to your email for N300 only. Just order through lawnigeria@gmail.com and info@lawnigeria.com or text 07067102097]

FOOD CORP OF INDIA

V.

ANTCLIZO SHIPPING CORP

THE ANTCLIZO

[1988] 2 ALL E.R. 513

14, 15, 16 MARCH, 5 MAY 1988

3PLR/1988/34 (CA-E)

HOUSE OF LORDS

LORD BRIDGE OF HARWICH,

LORD BRANDON OF OAKBROOK,

LORD BRIGHTMAN,

LORD ACKNER AND

LORD GOFF OF CHIEVELEY

REPRESENTATION

Stewart Boyd QC and Bernard Eder – for the charterers

Anthony Clarke QC and Charles Haddon-Cave – for the owners

MAIN ISSUES

ADMINISTRATION OF JUSTICE; Arbitration

Precedent – House of Lords – Freedom to depart from own decisions – Circumstances in which House will not review previous decision.

Arbitration – Practice – Want of prosecution – Inordinate and inexcusable delay – Law reform – Need for legislation to give courts power to dismiss arbitration claims for want of prosecution.

The House of Lords will not review a previous decision of the House unless they feel free to depart from both the reasoning and the decision and unless they are satisfied that to do so would be relevant to the resolution of the dispute in the case then before them, notwithstanding that the previous decision has given rise to grave concern (see p 514 c to g and p 516 c to e, post).

Legislation is required to give the courts power to dismiss arbitration claims on the ground of inordinate delay in their prosecution (see p 514 c to g and p 521 c d, post).

Notes

For precedent in the House of Lords, see 10 Halsbury’s Laws (4th edn) para 745 and 26 ibid para 573, and for cases on the subject, see 30 Digest (Reissue) 263–265, 693–717.

Cases referred to in opinions

Ainsbury v Millington [1987] 1 All ER 929,[1987] 1 WLR 379, HL.

Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA, The Leonidas D [1985] 2 All ER 796,[1985] 1 WLR 925, CA.

André & Cie SA v Marine Transocean Ltd, The Splendid Sun [1981] 2 All ER 993,[1981] QB 694,[1981] 3 WLR 43, CA.

Biss v Lambeth Southwark and Lewisham Area Health Authority [1978] 2 All ER 125,[1978] 1 WLR 382, CA.

Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corp [1981] 1 All ER 289,[1981] AC 909,[1981] 2 WLR 131, HL.

Carras Shipping Co Ltd v Food Corp of India, The Delian Leto, The Delian Spirit [1979] 2 Lloyd’s Rep 179, CA; affg [1978] 2 Lloyd’s Rep 433.

Clerco Cia Naviera SA v Food Corp of India, The Savvas [1982] 1 Lloyd’s Rep 22, CA; affg [1981] 1 Lloyd’s Rep 155.

Food Corp of India v Carras Shipping Co Ltd, The Delian Leto [1983] 2 Lloyd’s Rep 496.

Michalos (NZ) v Food Corp of India, The Apollon [1983] 1 Lloyd’s Rep 409.

Note [1966] 3 All ER 77,[1966] 1 WLR 1234, HL.

Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal, The Hannah Blumenthal [1983] 1 All ER 34,[1983] 1 AC 854,[1982] 3 WLR 1149, HL.

Sun Life Assurance Co of Canada v Jervis [1944] 1 All ER 469,[1944] AC 111, HL.

Appeal

Food Corp of India, a body corporate under the laws of India and charterers of the Liberian motor tanker Antclizo owned by the respondents, Antclizo Shipping Corp (the owners), appealed with leave of the Court of Appeal against the decision of that court (Kerr, Nicholls and Bingham LJJ)[1987] 2 Lloyd’s Rep 130) on 7 April 1987 dismissing the charterer’s appeal from the judgment of Evans J ([1986] 1 Lloyd’s Rep 181) given on 51331 October 1985 dismissing the charterers’ application for a declaration that an arbitration between them and the owners had been abandoned by mutual consent and for an injunction restraining the owners from prosecuting the arbitration. The facts are set out in the opinion of Lord Goff.

Their Lordships took time for consideration. 5 May. The following opinions were delivered.

5 May 1988. The following opinions were delivered.

MAIN JUDGEMENT

LORD BRIDGE OF HARWICH.

My Lords, I have had the advantage of reading in draft the speech of my noble and learned friend Lord Goff. I agree with it and for the reasons he gives I would dismiss the appeal. I wish in particular to express my entire concurrence in the plea he advances, in the concluding paragraph of his speech, for early legislation to correct the manifest defects in the present state of the law relating to the effect of inordinate and inexcusable delay in pursuing claims by way of arbitration.

LORD BRANDON OF OAKBROOK. My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Goff. I agree with it, and for the reasons which he gives I would dismiss this appeal.

I share his concern at the absence of any provision of law which would enable claims in arbitrations to be struck out on the ground of inordinate delay in their prosecution. A simple way of remedying this defect in the law would be an amendment by the legislature of s 12(6) of the Arbitration Act 1950, adding to the powers already conferred by it on the High Court a further power to strike out claims in arbitrations on that ground.

LORD BRIGHTMAN. My Lords, I have had the privilege of reading in draft the speech to be delivered by my noble and learned friend Lord Goff. I agree with it and in particular with his important footnote, that the time is ripe for a short enactment to remedy the shortcomings of the present situation. I also would dismiss this appeal.

LORD ACKNER. My Lords, I have had the privilege of reading in draft the speech to be delivered by my noble and learned friend Lord Goff. I agree with it and for the reasons he gives would dismiss this appeal.

LORD GOFF OF CHIEVELEY. My Lords, there is before your Lordships’ House an appeal by the Food Corp of India (the charterers) against a decision by the Court of Appeal ([1987] 2 Lloyd’s Rep 130), dismissing an appeal by the charterers from a decision of Evans J ([1986] 1 Lloyd’s Rep 181), in which he dismissed an application by them for a declaration that an arbitration between them and the respondents, Antclizo Shipping Corp (the owners), had been abandoned by mutual consent, and an injunction restraining further proceedings in the arbitration commenced by the owners, having regard to the long delay which had occurred. The appeal to your Lordships’ House is brought by leave of the Court of Appeal.

It at once appears that the present case provides yet another example of those cases in which it has been contended, for one reason or another, that, where an arbitration has been allowed to go to sleep for many years, the parties should be precluded from proceeding further with it. In Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corp Ltd [1981] 1 All ER 289,[1981] AC 909 your Lordships’ House, by a bare majority, rejected an argument that in such circumstances it may be held that the arbitration agreement has been repudiated. Indeed, in delivering the leading speech, Lord Diplock concluded that a mutual obligation rested on both parties to co-operate in proceeding with the reference to arbitration and, accordingly, that, far from one party being able to treat as a repudiation the other party’s failure to proceed with the arbitration after a long delay, he was himself in breach of contract in failing so to proceed. It is not understating the position to record that the effect of this decision, and indeed the reasoning on which it is based, has provoked serious disquiet among the whole commercial community. In particular, it has been suggested that the mutual obligation resting on both parties to proceed with their reference to arbitration, as expressed by Lord Diplock, bears no relation to commercial reality; indeed, it is plain that (if it exists) it is honoured more in the breach than in the observance, because in arbitration, as in litigation, where the claimant does not actively pursue his claim, it is the usual practice of the other party, founded on sheer common sense, to do nothing in the hope that the claim will simply die a natural death. In such a case, to expect the respondent to stir up an apparently moribund claim in arbitration proceedings against him is most unreal: see, in particular, the outspoken criticism of Lord Denning MR in André & Cie SA v Marine Transocean Ltd, The Splendid Sun [1981] 2 All ER 993 at 996–997,[1981] QB 694 at 700–702. As a result, parties and their advisers have attempted to outflank the decision in the Bremer Vulkan case by invoking other legal concepts. It was first suggested that, even if the arbitration agreement could not be held to have been repudiated, it might nevertheless be held to have been frustrated; this, which was a principal issue in Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal, The Hannah Blumenthal [1983] 1 All ER 34,[1983] 1 AC 854, was rejected by your Lordships’ House in that case. Next it was suggested that total inaction in an arbitration might give rise to an inference of a contract whereby the arbitration was mutually abandoned; indeed, such a contract was inferred by the Court of Appeal in The Splendid Sun, a decision which was approved by some members of your Lordships’ House in The Hannah Blumenthal. But it has since been suggested that such a conclusion may be difficult to reconcile with the ordinary principles underlying the formation of contracts at common law: see Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA, The Leonidas D [1985] 2 All ER 796,[1985] 1 WLR 925, and the judgments of Bingham and Nicholls LJJ in the present case ([1987] 2 Lloyd’s Rep 130 at 143, 147); and it has also been pointed out that the line of authority on which the notion of an implied contract of abandonment purports to rest is remarkably slender. As a result, two new suggestions have since been advanced. The first is that, by virtue of an implication in the contract containing the reference to arbitration, a term should be implied to the effect that the right to proceed with an arbitration may lapse after the expiry of a reasonable time during which the arbitration proceedings are not proceeded with: see The Leonidas D [1985] 2 All ER 796 at 798,[1985] 1 WLR 925 at 928 and the present case ([1987] 2 Lloyd’s Rep 130 at 147 per Nicholls LJ). This suggestion, if correct, would have the advantage that it might be fashioned, on the basis of the concept of reasonableness, to accord with the power of the court to dismiss an action for want of prosecution; certainly the officious bystander could have some very pertinent questions to put to the parties on this topic at the time of the formation of the contract. The second suggestion is that the court might exercise its power, under s 1 of the Arbitration Act 1950, to give leave to revoke the authority of one or more of the arbitrators, coupled if necessary with an order under s 25(2)(b) of that Act that the arbitration agreement shall cease to have effect with regard to the relevant dispute, a suggestion which is said to derive some force from the history of these provisions. Neither of these solutions has, however, hitherto been explored in litigation; and, indeed, it is not easy to reconcile the former with the mutual obligation to proceed with the arbitration as expounded by Lord Diplock in the Bremer Vulkan case [1981] 1 All ER 289 at 299,[1981] AC 909 at 983.

In the present case, all members of the Court of Appeal expressed their anxiety about the present state of the law on this topic, in terms which have become depressingly familiar. There is little doubt that they gave leave to appeal in the present case in the hope that your Lordships’ House might conduct a full-scale review of the authorities and in particular, a review of the mutual obligation as expounded by Lord Diplock in the Bremer Vulkan case, and even that, if they thought fit to do so, your Lordships might exercise their power under the 1966 practice statement (see Note [1966] 3 All ER 77,[1966] 1 WLR 1234) to depart from that decision. A similar invitation was extended to your Lordships’ House in The Hannah Blumenthal; but on that occasion the House declined the invitation. In a sense, therefore, your Lordships are being invited to depart from a previous decision in which it was decided not to depart from a previous decision; but I myself do not consider that this is a correct analysis of the situation. This is simply a repeated invitation to depart from the Bremer Vulkan case; and I cannot for myself think that an earlier refusal to respond to the invitation should stand in your Lordships’ way if they were now minded to accept it. For my part, I cannot disguise my strong inclination to accept the invitation to review the whole position, if the circumstances were appropriate. Counsel for the charterers expressed his particular anxiety to advance the arguments founded on an implied term of the arbitration agreement, and under ss 1 and 25 of the 1950 Act. But there must, I consider, in any event, be two prerequisites to such a review. First, your Lordships should not embark on such a review unless they felt free, if necessary, to depart both from the reasoning and the decision in the Bremer Vulkan case. Second, they should not embark on any such review unless they were satisfied that it would be of relevance to the resolution of the dispute in the instant case. Your Lordships’ House has repeatedly stressed that they will not embark on an inquiry into an issue which is only of academic interest: see, in particular, Sun Life Assurance Co of Canada v Jervis [1944] 1 All ER 469,[1944] AC 111 and Ainsbury v Millington [1987] 1 All ER 929,[1987] 1 WLR 379; a fortiori they should not do so where the inquiry involves a review of a previous decision of your Lordships’ House, because it cannot be right to hold, obiter, that such a previous decision was wrong.

Having heard counsel for the charterers open the case to your Lordships, I feel driven to the conclusion that, on the findings of fact in the present case, which in my opinion are unassailable, this appeal is bound in any event to fail, and that this is not therefore an appropriate case in which to conduct a review of the earlier authorities. For this reason alone, the appeal must, in my opinion, be dismissed. I shall now set out my reasons for reaching this conclusion, though, in the circumstances, it is not, I think, necessary to do so more than briefly.

For present purposes, I am content to adopt as my own the lucid and economical summary of the facts set out in the judgment of Bingham LJ, a judgment in which the other members of the Court of Appeal expressed their agreement. The relevant passage reads ([1987] 2 Lloyd’s Rep 130 at 138–140):

‘In the early 1970s the charterers chartered a large number of vessels to carry cargoes of grain and other commodities to Bombay and other Indian ports. Some of the vessels chartered were in the same beneficial ownership and managed by the same managers and some not. Several vessels performed a number of voyages. Thus for convenience different charters came to be referred to by the name of the vessel and the serial number of the voyage, as (for example) Antclizo 1, Cleon 2, Lepanto 3. The terms of these charter-parties were not identical, but all contained similar provisions for the calculation of laytime, demurrage and despatch. It soon became clear that the charterers and a number of different owners took different views on the effect of these provisions when (as was often the case) a vessel had to be lightened before she could be fully discharged. Two points of difference in particular arose. Was the allowable laytime to be calculated with reference to the quantity of a vessel’s cargo before lightening, or after? Did laytime run from 24 hours after notice of readiness had been given (with deduction of time actually spent lightening the vessel) or did it run from the completion of lightening? According to a list prepared by the charterers in September, 1975, there were by that time some 57 charters in which a dispute had arisen on one or other or both of those points. It appears that arbitrators had been appointed in about 10 cases. The present appeal concerns (and concerns only) the charter known as Antclizo 1. Antclizo was involved in at least two later charters, but the charter-party in question was for a single voyage from the US Gulf to Bombay. It was dated Oct. 20, 1973, and was one of the very early charters in the series. The vessel reached Bombay at the end of 1973. In October, 1974, the owners’ agents sent the charterers the owners’ calculation, showing discharging port demurrage of nearly $187,000 to be due to the owners. Shortly afterwards the owners sought payment of the 10 per cent. balance of freight due on settlement of demurrage. The balance of freight, if my calculation is correct, amounted to over $100,000. No payment was made, and the owners and charterers appointed arbitrators (the late Mr. John Potter and Mr. Cedric Barclay) in December, 1974, and January, 1975 respectively. In March, 1975, the charterers made their own calculation. Applying their own interpretation of the charter-party, they calculated that, far from any demurrage being due to the owners, a considerable sum of despatch had been earned by the charterers at both the loading and discharge ports. So the charterers deducted this despatch from the 10 per cent. of freight outstanding and (as it appears) paid the balance to the owners. The payment was, so far as the documents show, tendered and received without comment although, if the owners were right, they were entitled to payment of another $200,000. The same differences of interpretation were already becoming apparent on other charter-parties, and arbitrators had by March, 1975, already been appointed in respect of Lepanto 1. Over the next 18 months no step was taken in the Antclizo 1 arbitration, but a series of letters was written concerning other charters on which the same demurrage dispute had arisen. The learned Judge quoted from letters written with reference to Cleon 1, Sincerity 2, Antclizo 2, Lepanto 2, Antclizo 3, Cleon 2, Lepanto 3 and Lepanto 4. There were other letters which he did not quote. It is unnecessary to repeat the quotations. The letters were not in identical language, but one extract (from a letter of Nov. 17, 1975, about Cleon 1) gives the gist of what the owners by their agents were suggesting: “Owners request for the immediate settlement of this dispute; Charterers accepting Owners’ figure for the discharge part and refunding the excess money deducted. Alternatively they want Charterers’ agreement in writing that they are prepared to finally settle this dispute on the very same lines of the award of Arbitrators which is awaited in identical cases Viz. Antclizo of 20.10.73 and Lepanto of 27.10.73 which are already referred to Arbitration. If Charterers do not give such agreement, then Owners want to take this voyage also for arbitration which would mean unnecessary expenses to both parties.” The charterers neither accepted nor rejected these suggestions. The letters are shown by extensive annotation to have been received and considered by the charterers, but for the most part they did not reply at all. It appears that at some point they decided internally to adopt no general policy with regard to these laytime disputes but to deal with the claims on a case by case basis. These letters suggest that the owners wished the Antclizo 1 or Lepanto 1 arbitrations to be treated as test cases, but the charterers never agreed to this. The Lepanto 1 arbitration appears to have been resolved by agreement. Meanwhile the Antclizo 1 arbitration remained inactive. But there had been discussion of Cleon 2. In this case there was the usual demurrage dispute, but in addition the charterers had a substantial cargo claim. They accordingly took the initiative by appointing Mr. Barclay as their arbitrator in November, 1975, and the owners appointed Mr. Potter. These were the same arbitrators whom each of the parties had appointed in the Antclizo 1 arbitration. The charterers instructed Stocken & Co. and the owners of the vessel Holman Fenwick & Willan. On June 2, 1976, Holman’s wrote to Stocken & Co. a letter relating to this arbitration which included this paragraph: “One point that we would wish to raise immediately in relation to our clients’ demurrage claim concerns the major dispute over 21 days 18 hours 33 minutes demurrage arising out of the time elapsing before completion of lightening  operations. There is some suggestion in the documents we have seen that the parties to this Arbitration would agree to be bound by the results of Arbitrations on similar cases involving the ‘Lepanto’(C/P dd. 27.10.73) and the ‘Antclizo’(C/P dd. 20.10.73). We would be pleased to hear your views on this aspect of the dispute.” A copy of this letter was sent by Stocken & Co. to their clients the charterers in New Delhi in November, 1977. No doubt Stocken & Co. may also have advised the charterers at the time. But they did not reply on the point made by the owners’ solicitors. Instead they took a somewhat technical point that Mr. Potter had not been validly appointed in the Cleon 2 arbitration, because the appointment had been made by the West of England Club on behalf of disponent owners who were not members of the club. It was now, Stocken & Co. contended, too late for a valid appointment to be made. A similar issue was raised in two other cases which came before the Commercial Court, The Delian Leto and The Delian Spirit [see Carras Shipping Co Ltd v Food Corp of India, The Delian Leto, The Delian Spirit [1978] 2 Lloyd’s Rep 433;[1979] 2 Lloyd’s Rep 179, CA]. In these cases the charterers’ technical objection was overruled by Mr. Justice Lloyd (as he then was) on May 22, 1978 and by the Court of Appeal on Feb. 26, 1979. While these Court proceedings were in train no progress was made with the Cleon 2 arbitration (nor with the Antclizo 1 arbitration). But in November, 1979, Stocken & Co. agreed to abandon the technical point they had raised (which had been decisively rejected in the Courts) and to proceed on the merits in the Cleon 2 arbitration. Submissions were placed before the arbitrators, and the owners of the vessel Cleon became the claimants in that arbitration. The charterers asked that the award should be in the form of a special case and, arbitrators having disagreed, the late Mr. Alan Kent made his award as umpire accordingly on Oct. 13, 1980. The charterers won on the allowable laytime issue but lost on the used laytime issue. It then appears that the charterers failed to set down the special case in time and resolved not to apply to set the case down out of time. In February, 1981, the charterers agreed to pay the sum due to the owners under the Cleon 2 award. But that was by no means the end of the litigious story. Mr. Kent had made another award in the form of a special case in an arbitration between the charterers and owners of the vessel Savvas which raised both the demurrage issues I have mentioned. This was to the same effect as his award on the Cleon 2, and it was duly set down for hearing. Mr. Justice Parker (as he then was) upheld the award on Oct. 30, 1980 [see Clerco Cia Naviera SA v Food Corp of India, The Savvas [1981] 1 Lloyd’s Rep 155]. The charterers appealed. Their appeal was dismissed on Oct. 19, 1981 [see [1982] 1 Lloyd’s Rep 22]. Even then the charterers did not give up. Related issues were determined against the charterers by me on Oct. 13, 1982 in N.Z. Michalos v The Food Corporation of India (The Apollon)([1983] 1 Lloyd’s Rep 409) and by Mr. Justice Lloyd in The Delian Leto on June 28, 1983 [see Food Corp of India v Carras Shipping Co Ltd, The Delian Leto [1983] 2 Lloyd’s Rep 496]. By letter of Apr. 21, 1983, Holman’s for the owners called on the charterers to pay the demurrage and the balance of freight due for Antclizo 1, indicating an intention to proceed to an arbitration award if necessary. By this time both arbitrators had, at the instigation of the West of England Club, destroyed their files on this arbitration. It is, however, accepted that this was the result of a misunderstanding, and led to no communication between the parties. Neither the charterers nor the Judge attached significance to this episode. The learned Judge gave this summary of the history ([1986] 1 Lloyd’s Rep 181 at 187): “Summary During the period of inactivity in the Antclizo 1 arbitration, from about May, 1975 to April, 1983, there was considerable activity in numerous other disputes involving the same or similar laytime issues. Some of the other cases involved vessels in the same ownership or management as Antclizo and there were three others involving Antclizo herself. Until about August, 1976, there were references to the Antclizo 1 arbitration in correspondence dealing with other disputes, but various suggestions made by or on behalf of the owners that the  outcome of those other disputes should be governed by the award in Antclizo 1 were not responded to by the plaintiffs [charterers]. One of the other disputes, Cleon 2, was itself referred to arbitration, and from 1976 onwards it was actively, though intermittently, pursued. It was never suggested that Cleon 2 should be regarded as determinative of the Antclizo 1 dispute. The award in Cleon 2 was accepted by the plaintiffs [charterers] in February, 1981, but even then more than two years passed before the defendants [owners] sought to revive the Antclizo 1 arbitration in April, 1983.”’

It is against this background of fact that it fell to Evans J to consider the submissions advanced by the charterers that the arbitration agreement had been abandoned by mutual consent or, alternatively, that the owners were estopped from proceeding with the reference. With regard to these submissions, the judge made the following findings of fact: (1) that the charterers had not succeeded in establishing the existence of an unequivocal statement, whether regarded as an offer or as a representation, ie either as an offer by the owners to abandon the reference to arbitration or as a representation by the owners to the charterers that they were entitled to treat the reference as having been abandoned;(2) that the charterers were not reasonably entitled to assume that the agreement to arbitrate was agreed to be abandoned;(3) that the charterers did not in fact form the view that the owners had decided not to pursue the matter further, or that the arbitration was abandoned, with the necessary degree of finality that must exist; rather, the matter was left in the air;(4) that, so far as detriment on the part of the charterers was concerned, with reference to the allegation of estoppel, none had been established by them. Evans J said ([1986] 1 Lloyd’s Rep 181 at 189):

‘The [charterers] have suggested that, if it is necessary to consider whether they suffered prejudice or detriment sufficient to support a plea of estoppel, then they have done so in that they have lost the opportunity of establishing the reasons why the vessel was detained at the discharging port, as long ago as January, 1974. But they had ample opportunity to do so when the disputes first arose, and presumably they made whatever enquiries were relevant and necessary before producing their laytime statement and paying the balance of freight in March, 1975. Mr. Uppal [the charterers’ deputy manager of exports and imports] agreed that the outstanding issues were ones of law, not of fact, and in my judgment the [charterers] have not proved that they did suffer detriment or prejudice in the form which they suggest.’

The Court of Appeal declined to interfere with any of the judge’s findings of fact. His first finding was accepted as correct; a suggestion that the judge had misdirected himself by imposing too high a standard in requiring an equivocal statement, before he could hold that an offer had been made by the owners to abandon the arbitration, was rejected because, as was plainly the case, the judge was only concerned to ascertain whether the effect of the owners’ conduct was quite clear. With regard to the judge’s second finding, the Court of Appeal could see no flaw in it; on the contrary, it would have been inclined to draw inferences more strongly in the owners’ favour. In the words of Bingham LJ ([1987] 2 Lloyd’s Rep 130 at 142):

‘When one considers the Antclizo 1 reference one has to ask: Would a reasonable charterer in the position of these charterers have inferred that Greek owners, without any quid pro quo, were offering to drop a claim which was certainly not obviously bad, which was the subject of other litigation, and which (with interest) was potentially worth between a quarter and half a million dollars? Any answer other than the Judge’s negative would in my view cause scarcely less surprise in New Delhi than on the Akti Miaouli.’

As to the third finding, the Court of Appeal was in agreement with the conclusion of he judge. Bingham LJ stated that in his judgment the judge was quite right on all the  evidence to decline to find that the charterers had formed a view which, if formed, would (he thought) have been quite unreasonable (at 144). For good measure, Bingham LJ added that a reasonable owner in the position of the owners would, in his view, have understood very well that the charterers were remaining silent and inactive as long as they could, having nothing to gain from spurring the matter on. On these findings of fact, Bingham LJ concluded that, whatever analysis of a contract of abandonment was accepted, the charterers’ submission that there was such a contract must fail. In his opinion, it was unnecessary to discover to what extent there were differences between the criteria formulated by Lord Diplock, Lord Brandon and Lord Brightman respectively in The Hannah Blumenthal [1983] 1 All ER 34,[1983] 1 AC 854 for the purpose of ascertaining whether a reference to arbitration has been mutually abandoned, for whichever formulation was applied to the facts of the present case the result must be the same. The argument on estoppel was not pursued before the Court of Appeal, it being recognised that, if the charterers could not establish abandonment, they must fail on the issue of estoppel.

Before your Lordships’ House, counsel for the charterers struggled manfully to challenge the conclusions of Evans J and the Court of Appeal on abandonment; but he was faced with the insuperable objection that their conclusions were founded on concurrent inferences of fact with which, on well-settled principles, your Lordships’ House is most reluctant to interfere. For my part, I would not merely not interfere with them, but would indorse them. It follows that, as Bingham LJ pointed out, it does not matter which formulation of a contract of abandonment is preferred, for the result is exactly the same: the Court of Appeal was right in affirming the decision of the judge that no abandonment can be inferred from the facts in the present case. I would only add that, before your Lordships’ House as before the Court of Appeal, it was recognised that, in such circumstances, the submission founded on estoppel could not be pursued.

It follows that the present case is not an appropriate case for your Lordships’ House to reconsider (if they thought it right to do so) the principles on which abandonment, or estoppel, can be inferred in cases such as the present. Counsel for the charterers however sought the leave of your Lordships’ House to argue certain points which had not been raised either before the judge or before the Court of Appeal. These were: (1) repudiation (the argument rejected by the majority of your Lordships’ House in the Bremer Vulkan case [1981] 1 All ER 289,[1981] AC 909);(2) frustration (the argument unanimously rejected by your Lordships’ House in The Hannah Blumenthal [1983] 1 All ER 34,[1983] AC 854);(3) the new argument based on an implied term that a party’s right to proceed with an arbitration will lapse if not exercised within a reasonable time;(4) the argument based on the right of a party to arbitration proceedings to a fair hearing (an argument favoured by the minority of your Lordships’ House in the Bremer Vulkan case;(5) the new argument based on ss 1 and 25 of the Arbitration Act 1950, to which I have already referred.

Counsel for the charterers, however, very frankly admitted that none of the above arguments (except possibly the argument based on an implied term) could succeed in the present case, having regard to the findings of fact by Evans J that the charterers had suffered no detriment or prejudice by reason of the delay, and that there was nothing to prevent a fair trial of the action even at this late stage, the outstanding issues being recognised to be issues of law and not of fact. The only point which could conceivably be argued as not being precluded by that finding was the issue based on an implied term, in that it could be argued that a reasonable time might be held to have elapsed even before the time came when a fair trial of the issues of the action was no longer possible: cf Biss v Lambeth Southwark and Lewisham Area Health Authority [1978] 2 All ER 125,[1978] 1 WLR 382. But the difficulty in the way of that submission is that, since the point had not been raised in the courts below, there was no consideration of, and therefore no finding on, the question whether a reasonable time had, in all the circumstances of the case, elapsed, within the meaning of the expression ‘reasonable time’ as used in such an implied term (if held to exist). In the absence of any such finding, it would be quite wrong for your Lordships to consider what must be, in the circumstances, an academic question. In truth, all the points which counsel for the charterers sought to raise could only sensibly be considered as a whole, together with the question whether the Bremer Vulkan case was rightly decided. This is as true of the issue of the implied term as it is of any other of the issues which he sought to raise, for it is difficult to see how any such term could be implied consistently with the existence of an implied mutual obligation on the parties to co-operate in proceeding with the reference to arbitration, as was held to exist by the majority of your Lordships’ House in the Bremer Vulkan case.

It is for these reasons, as I understand it, that your Lordships declined to grant to the charterers leave to pursue any of the new points which counsel for the charterers sought to raise.

I would therefore dismiss the appeal. I wish however to add a footnote. There has been clearly expressed, by all members of the Court of Appeal in the present case, grave concern about the law as it now stands with regard to arbitrations which have been allowed to go to sleep for many years; and it is plain that, in so expressing themselves, they were expressing a concern felt generally in the City of London. It may, however, be that the problem could be dealt with most expeditiously, and most clearly, by legislation conferring a power to dismiss claims in arbitrations for want of prosecution, similar to the power which now exists to dismiss similar actions for want of prosecution in the courts. If that is right, then, in the interests of all concerned, the sooner the matter is brought before the legislature for consideration, the better.

Appeal dismissed.

Solicitors: Zaiwalla & Co (for the charterers); Holman Fenwick & Willan (for the owners).

Mary Rose Plummer Barrister.