Sir Bernard Eder
[2016] EWHC 846 (Comm)
Bailii
England and Wales

Contract, Arbitration

Updated: 14 January 2022; Ref: scu.563269

Butcher QC
[2015] EWHC 1815 (Comm)
Bailii

Contract, Arbitration

Updated: 02 January 2022; Ref: scu.550065

The court was asked whether when contracts have been induced by bribery and have been rescinded on discovery of the bribery, that constitutes a dispute which can be determined by arbitration in the context of a common form of arbitration clause.
Held: a dispute whether the contract can be set aside or rescinded for alleged bribery does fall within the arbitration clause on its true construction. ‘If arbitrators can decide whether a contract is void for initial illegality, there is no reason why they should not decide whether a contract has been procured by bribery, just as much as they can decide whether a contract has been procured by misrepresentation or non-disclosure. Illegality is a stronger case than bribery which is not the same as non est factum or the sort of mistake which goes to the question whether there was any agreement ever reached. It is not enough to say that the bribery impeaches the whole contract unless there is some special reason for saying that the bribery impeaches the arbitration clause in particular. ‘ and ‘we see no reason why the charterers should be prevented from arbitrating these claims; if the arbitration tribunal decides that the charters were indeed procured by bribery they will be able to decide what consequence that conclusion has on any claims which the charterers might otherwise legitimately have. ‘

Tuckey, Arden and Longmore LJJ
Times 29-Jan-2007, [2007] EWCA Civ 20, [2007] Bus LR 686, [2007] 1 CLC 144, [2007] 2 Lloyd’s Rep 267, [2007] ArbLR 22, [2007] 1 All ER (Comm) 891
Bailii
England and Wales
Citing:
Cited – Heyman v Darwins Limited HL 1942
An arbitration clause will survive a repudiatory breach: ‘I agree with the Lord Chancellor in thinking that the true ground of the decision in Jureidini v National British and Irish Millers Insurance Co Ltd was the narrowness of the field of . .
Cited – Mackender v Feldia AG CA 1966
A clause provided that an insurance policy should be governed by Belgian law and that ‘any disputes arising thereunder shall be exclusively subject to Belgian jurisdiction.’ The underwriters avoided the contract for non-disclosure of material facts . .
Cited – Empresa Exportadora de Azucar v Industria Azucarera Nacional S.A, The Playa Larga CA 1983
There had been a theft by Cuban sellers of one cargo of sugar, property in which had already passed to the buyers, and non-delivery of a second combined with trickery whereby the intended buyers were nonetheless induced to pay its price. The first . .
Cited – Union of India v Aaby’s Rederi A/S, The Evje HL 1975
Lord Dilhorne said of the words ‘to be settled in London’: ‘At first sight those words appear to me to mean no more and no less than that the contributions to be made have to be determined in London and paid there, and that implies determined in . .
Cited – Samick Lines Co Ltd v Owners of The Antonis P Lemos HL 2-Jan-1985
The House was asked as to the effect of the section.
Held: Since the provisions of the statute under consideration were designed to give domestic effect to an international convention, a broad and liberal construction should be given to them . .
Cited – The Eschersheim; The Jade HL 1976
The 1956 Act implemented as part of the domestic law the treaty obligations of the United Kingdom under the International Convention Relating to the Arrest of Seagoing Ships signed at Brussels on 10 May 1952 (the Arrest Convention).
Held: The . .
Cited – Fillite (Runcorn) Ltd v Aqua-Lift CA 1989
The court considered whether claims arising from misrepresentation or breach of a collateral contrat were claims arising ‘under’ the contract so as to be governed by the disputes provisions in it.
Held: The disputes did not arise ‘under the . .
Cited – The Ermoupolis 1990
A claim for the tort of conversion fell within the phrase ‘any dispute arising in any way whatsoever out of this bill of lading’. . .
Cited – Aggeliki Charis Compania Maritima SA v Pagnan SpA The Angelic Grace QBD 1994
The court considered whether a claim for a collision between two ships was governed by an arbitration clause which read ‘all disputes from time to time arising out of this contract shall . . be referred to the arbitrament of two arbitrators carrying . .
Cited – Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd CA 7-Apr-1993
An action was brought by re-insurers for a declaration that reinsurance policies were void for illegality, and that the plaintiffs were not liable under them. The illegality alleged was that the defendants were not registered or approved to carry on . .
Cited – Overseas Union v AA Mutual International Insurance Co Ltd 1988
Evans J said that there was a broad distinction between clauses which referred ‘only those disputes which may arise regarding the rights and obligations which are created by the contract itself’ and those which ‘show an intention to refer some wider . .
Cited – Ethiopian Oil Fields v Rio del Mar 1990
A dispute about rectification came within the words ‘any dispute arising out of or under this contract’. The phrase ‘out of’ must add something to ‘under’, even though the words ‘out of ‘ were in fact the words which appeared first in the clause. . .
Cited – Harbour Assurance Co (Uk) Ltd v Kansa General International Insurance Co Ltd 1993
The Court said that older (pre Heyman v Darwins Ltd) authorities about the width of arbitration clauses had to be approached with some care and that the words ‘arising from the contract’ have almost invariably been treated as ‘words of very wide . .
Cited – Delos, Owners of Cargo v Delos Shipping Ltd ComC 31-Jan-2001
Claims for breach of duty and bailment could be brought within the phrase ‘any disputes under’ the contract. . .
Cited – Chimimport Plc v G d’Alesio SAS 1994
The phrase ‘arising under’ in a clause referring matters to arbitration is narrower than ‘arising out of’ and the court doubted whether a tortious claim could easily give rise to a dispute ‘under the contract’. . .
Cited – Logicrose Ltd v Southend United Football Club Ltd CA 5-Feb-1988
The agent required the contractual counterparty to pay a bribe of pounds 70,000 to an offshore account.
Held: The bribe was held to be recoverable by the principal whether the principal rescinded or affirmed the contract because it was a . .
Cited – Francesco Benincasa v Dentalkit Srl ECJ 3-Jul-1997
A contract which forms a part of the customer’s arrangements for pursuing his trade or profession is not a consumer contract and a choice of jurisdiction clause in a distribution agreement was valid.
Europa . .
Cited – Credit Suisse First Boston (Europe) Ltd v Seagate Trading Co Ltd 1999
An oral contract for the sale of Russian Notes was followed by a Trade confirmation with an English jurisdiction clause. It was said that this document was fraudulently presented by Credit Suisse as a mere perfunctory confirmation (which it was not) . .
Cited – Law Debenture Trust Corporation Plc v Elektrim Finance Bv and others ChD 1-Jul-2005
A bond contained an arbitration clause subject to a further clause giving the claimant an ‘exclusive right at its option to apply to the courts of England to settle any disputes which may arise out of or in connection with these presents’. The . .
Cited – Ahmad Al-Naimi (T/a Buildmaster Construction Services) v Islamic Press Agency Incorporated CA 28-Jan-2000
The court has an inherent power to stay proceedings. The court could refer a matter to arbitration where there was an arbitration clause, but could also do so under its inherent discretion, where this was not quite clear, but it was clear that good . .
Cited – Birse Construction Limited v St David Limited TCC 12-Feb-1999
There are four approaches to deciding whether an arbitration agreement exists to which section 9 applies:- (1) to determine on the evidence before the court that such an agreement does exist in which case (if the disputes fall within the terms of . .
Appeal from – Fiona Trust and Holding Corp and others v Privalov and others ComC 20-Oct-2006
The parties disputed whether their claim should be arbitrated.
Held: A claim as to whether the contract itself had been made was not one which could be arbitrated by provisions in that contract. It does not arise ‘under’ the contract. The . .
See Also – Fiona Trust Holding Corporation and others v Privalov and others ComC 19-Jan-2007
. .

Cited by:
See Also – Fiona Trust and Holding Corp and others v Privalov and others ComC 20-Oct-2006
The parties disputed whether their claim should be arbitrated.
Held: A claim as to whether the contract itself had been made was not one which could be arbitrated by provisions in that contract. It does not arise ‘under’ the contract. The . .
Appeal from – Premium Nafta Products Ltd (20th Defendant) and others v Fili Shipping Company Ltd and others; Fiona Trust and Holding Corporation v Privalov HL 17-Oct-2007
The owners of a ship sought to rescind charters saying that they had been procured by bribery.
Held: A claim to rescind a contract by reason of bribery fell within the scope of an arbitration clause under which the parties had agreed to refer . .
Cited – Scottish and Newcastle Plc v Raguz HL 29-Oct-2008
The lease had been assigned by the claimant to the defendant and on again to a tenant who became insolvent. The landlord had recovered sums said to be due from the claimant who now sought an indemnity from the defendant. The defendant said that the . .
See Also – Fiona Trust Holding Corp and others v Privalov and others ComC 21-May-2007
Allegations were made of different varieties of fraud. Applications were made for freezing orders. . .
See Also – Fiona Trust and Holding Corporation and others v Privalov and others ComC 22-Jul-2008
. .

Lists of cited by and citing cases may be incomplete.

Contract, Arbitration

Updated: 19 November 2021; Ref: scu.248016

The House was asked whether a contract to abandon an arbitration might be implied from conduct, or a lack of conduct.
Held: The abandonment of a contract can be effected by the entry of the parties, expressly or by necessary inference from conduct, into a fresh contract for mutual release from their obligations under the contract said to be abandoned. An argument that mere inactivity of the parties could be construed as an implied agreement to rescind the agreement to arbitrate, failed.
Lord Brandon of Oakbrook considered that an actual abandonment, as opposed to an estoppel precluding an assertion of continuance, required proof of conduct of each party, as evinced to the other party and acted on by him, as ‘leads necessarily to the inference of an implied agreement’ between them to abandon the contract. Lord Roskill referred to ‘the only possible inference [being] that the agreement to arbitrate has been rescinded by mutual consent’. Though Lord Diplock made no similar observation both Lords Keith of Kinkel and Brightman agreed with Lords Brandon and Roskill.
Lord Brandon said: ‘there are two essential factors which must be present in order to frustrate a contract. The first essential factor is that there must be some outside event or extraneous change of situation, not foreseen or provided for by the parties at the time of contracting, which either makes it impossible for the contract to be performed at all, or at least renders its performance something radically different from what the parties contemplated when they entered into it. The second essential factor is that the outside event or extraneous change of situation concerned, and the consequences of either in relation to the performance of the contract, must have occurred without either the fault or the default of either party to the contract.’

Lord Brandon, Lord Diplock
[1983] 1 AC 854, [1983] Com LR 20, [1983] 1 All ER 34, [1983] 1 Lloyds Rep 103, [1982] 3 WLR 1149
England and Wales
Cited by:
Cited – Martin v Medina Housing Association Ltd CA 31-Mar-2006
The former tenant had set out to buy the council house, but had written to say that she did not intend to go ahead. Her son who had taken over the tenancy after her death now sought, twelve years later, to require the authority to proceed at that . .
Cited – Mote v Secretary of State for Work and Pensions and Another CA 14-Dec-2007
The appellant was accused of having received income benefits to which he was not entitled. A prosecution was commenced and at the same time he appealed to the tribunal against the decision that there had been an overpayment. The authorities . .
Cited – SG and R Valuation Service Co v Boudrais and others QBD 12-May-2008
The claimant sought to require the defendants not to work during their notice period to achieve the equivalent of garden leave despite there being no provision for garden leave in the contracts. It was said that the defendants had conspired together . .

Lists of cited by and citing cases may be incomplete.

Contract, Arbitration

Leading Case

Updated: 09 November 2021; Ref: scu.242430

The parties disagreed as to the curial law of an arbitration agreement. The proper law of the building contract and the arbitration agreement was English but the reference was conducted in Scotland.
Held: Evidence of behaviour after a contract had been made is inadmissible to assist in the construction of an entirely written contract. An application for the appointment of an arbitrator stated that there was a submission to arbitration within the meaning of the Arbitration Act 1950, but the arbitration was held to be subject to the law of Scotland. While evidence of subsequent conduct is admissible to determine the existence of a contract, it is not admissible to determine the terms of a contract.
Lord Reid: ‘It has been assumed in the course of this case that it is proper, in determining what was the proper law, to have regard to actings of the parties after their contract had been made. Of course the actings of the parties (including any words which they used) may be sufficient to show that they made a new contract. If they made no agreement originally as to the proper law, such actings may show that they made an agreement about that at a later stage. Or if they did make such an agreement originally such actings may show that they later agreed to alter it. But with regard to actings of the parties between the date of the original contract and the date of Mr. Underwood’s appointment I did not understand it to be argued that they were sufficient to establish any new contract, and I think they clearly were not. As I understood him, counsel sought to use those actings to show that there was an agreement when the original contract was made that the proper law of that contract was to be the law of England. I must say that I had thought that it is now well settled that it is not legitimate to use as an aid in the construction of the contract anything which the parties said or did after it was made. Otherwise one might have the result that a contract meant one thing the day it was signed, but by reason of subsequent events meant something different a month or a year later.’
Lord Hodson: ‘I should add that I cannot assent to the view which seems to have found favour in the eyes of the Master of the Rolls and Widgery LJ. that as a matter of construction the contract can be construed not only in its surrounding circumstances but also by reference to the subsequent conduct of the parties.’
Viscount Dilhorne: ‘I do not consider that one can properly have regard to the parties’ conduct after the contract has been entered into when considering whether an inference can be drawn as to their intention when they entered into the contract, though subsequent conduct by one party may give rise to an estoppel.’
Lord Wilberforce said: ‘once it was seen that the parties had made no express choice of law, the correct course was to ascertain from all relevant contemporary circumstances including, but not limited to, what the parties said or did at the time, what intention ought to be imputed to them on the formation of the contract. Unless it were to found an estoppel or a subsequent agreement, I do not think that subsequent conduct can be relevant to this question.’

Lord Reid, Lord Hodson, Viscount Dilhorne, Lord Wilberforce,
[1970] AC 572, [1970] 1 Lloyds Rep 269, [1970] 1 All ER 796, [1970] AC 583
England and Wales
Citing:
Appeal from – Whitworth Street Estates (Manchester) Ltd v James Miller and Partners Ltd CA 1969
The parties, one in England and one in Scotland agreed to perform certain actions in Scotland. Any dispute was to be settled by arbitration, but it was not said whether this would be in England or Scotland. The curial law of arbitration would decide . .

Cited by:
Cited – Montgomery v Johnson Underwood Ltd CA 9-Mar-2001
A worker who had strictly been employed by an agency but on a long term placement at a customer, claimed to have been unfairly dismissed by the customer when that placement ended.
Held: To see whether she was an employee the tribunal should . .
Cited – Halpern and Another v Halpern and others ComC 24-Mar-2006
The deceased parents, being orthodox Jews, had first made standard wills and then made provision accoding to Jewish law. A dispute after the second death was referred to a Beth Din arbitration. After an initial resolution, various distributions were . .
Cited – Beale v Harvey CA 28-Nov-2003
Land had been divided into three lots on its development, but the site plan did not match the line of a fence actually erected.
Held: The court was not bound by the Watcham case, and would not follow it to allow reference to the later . .
Cited – F L Schuler AG v Wickman Machine Tools Sales Limited HL 4-Apr-1973
The parties entered an agreement to distribute and sell goods in the UK. They disagreed as to the meaning of a term governing the termination of the distributorship.
Held: The court can not take into account the post-contractual conduct or . .
Cited – AB and others v British Coal Corporation (Department of Trade and Industry) QBD 27-Jun-2007
The parties disputed the effect of the Claims Handling Agreement (CHA) which regulated claims for compensation for respiratory diseases incurred by people working for the defendant as regards the circumstances for claimants with chronic bronchitis. . .
Cited – Sattar v Sattar and Another ChD 20-Feb-2009
The parties disputed the effect of a Tomlin order settling litigation between them. Under the order, if certain sums were not paid, the company was to be sold.
Held: Later behaviour could not be used to help interpret an agreement, and in this . .
Cited – Lexington Insurance Co v AGF Insurance Ltd HL 30-Jul-2009
The respondent insurers had been held liable in Washington, and had been granted indemnity against the appellants by the Court of Appeal. The insurance contract had been under the law of Pennsylvania, but that of the re-insurance under the law of . .
Cited – Radford and Another v Frade and Others QBD 8-Jul-2016
The court was asked as to the terms on which solicitors and Counsel were retained to act for the defendants. The appeals did not raise any issues concerning costs practice, and were by way of review of the Costs Judge’s rulings, and not by way of . .

Lists of cited by and citing cases may be incomplete.

Contract, Arbitration

Leading Case

Updated: 01 November 2021; Ref: scu.194302

The owners of a ship sought to rescind charters saying that they had been procured by bribery.
Held: A claim to rescind a contract by reason of bribery fell within the scope of an arbitration clause under which the parties had agreed to refer to arbitration ‘any dispute arising under this charter’. The issue of bribery could be dealt with within that arbitration.
Lord Hoffmann said: ‘It depends upon the intention of the parties as expressed in their agreement. Only the agreement can tell you what kinds of disputes they intended to submit to arbitration. But the meaning which the parties intended to express by the words which they used will be affected by the commercial background and the readers’ understanding of the purpose for which the agreement was made. Businessmen in particular are assumed to have entered into agreements to achieve some rational commercial purpose and an understanding of this purpose will influence the way in which one interprets their language’.
and ‘the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction.’

Lord Hoffmann, Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Brown of Eaton-under-Heywood
[2007] ArbLR 24, [2007] UKHL 40, [2008] 1 Lloyd’s Rep 254, [2007] 4 All ER 951, [2007] Bus LR 1719, [2007] 114 Con LR 69, [2007] 2 CLC 553, [2007] 2 All ER (Comm) 1053, [2007] CILL 2528
Bailii
Arbitration Act 1996 7 9
England and Wales
Citing:
At first instance – Fiona Trust and Holding Corp and others v Privalov and others ComC 20-Oct-2006
The parties disputed whether their claim should be arbitrated.
Held: A claim as to whether the contract itself had been made was not one which could be arbitrated by provisions in that contract. It does not arise ‘under’ the contract. The . .
See Also – Fiona Trust Holding Corp and others v Privalov and others ComC 21-May-2007
Allegations were made of different varieties of fraud. Applications were made for freezing orders. . .
Appeal from – Fiona Trust and Holding Corporation and others v Privalov and others CA 24-Jan-2007
The court was asked whether when contracts have been induced by bribery and have been rescinded on discovery of the bribery, that constitutes a dispute which can be determined by arbitration in the context of a common form of arbitration clause.
Cited – Overseas Union v AA Mutual International Insurance Co Ltd 1988
Evans J said that there was a broad distinction between clauses which referred ‘only those disputes which may arise regarding the rights and obligations which are created by the contract itself’ and those which ‘show an intention to refer some wider . .
Cited – Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd CA 7-Apr-1993
An action was brought by re-insurers for a declaration that reinsurance policies were void for illegality, and that the plaintiffs were not liable under them. The illegality alleged was that the defendants were not registered or approved to carry on . .
Cited – Fillite (Runcorn) Ltd v Aqua-Lift CA 1989
The court considered whether claims arising from misrepresentation or breach of a collateral contrat were claims arising ‘under’ the contract so as to be governed by the disputes provisions in it.
Held: The disputes did not arise ‘under the . .
Cited – Union of India v Aaby’s Rederi A/S, The Evje HL 1975
Lord Dilhorne said of the words ‘to be settled in London’: ‘At first sight those words appear to me to mean no more and no less than that the contributions to be made have to be determined in London and paid there, and that implies determined in . .
Cited – Heyman v Darwins Limited HL 1942
An arbitration clause will survive a repudiatory breach: ‘I agree with the Lord Chancellor in thinking that the true ground of the decision in Jureidini v National British and Irish Millers Insurance Co Ltd was the narrowness of the field of . .
Cited – Mackender v Feldia AG CA 1966
A clause provided that an insurance policy should be governed by Belgian law and that ‘any disputes arising thereunder shall be exclusively subject to Belgian jurisdiction.’ The underwriters avoided the contract for non-disclosure of material facts . .
Cited – Ashville Investments Ltd v Elmer Contractors Ltd CA 1987
A clause in the contract refered to arbitration: ‘any dispute or difference as to the construction of this contract or as to any matter or thing of whatsoever nature arising thereunder or in connection therewith.’
Held: The court should adopt . .
See Also – Fiona Trust Holding Corporation and others v Privalov and others ComC 19-Jan-2007
. .

Cited by:
See Also – Fiona Trust and Holding Corporation and others v Privalov and others ComC 22-Jul-2008
. .
Cited – Trident Turboprop (Dublin) Ltd v First Flight Couriers Ltd CA 2-Apr-2009
The appellant entered into two aircraft leasing agreements but were unable to maintain payments. They appealed against rejection of their argument that the agreements were not exempt from the controls under the 1977 Act by being international supply . .
Cited – S Ltd v C Ltd ComC 27-Feb-2009
Defamation allegation not subject to arbitration
The parties had an agreement referring disputes between them to arbitration. One party raised an allegation of defamation, but the arbitrator refused jurisdiction. The parties had chosen the London Metal Exchange for its expertise in metals trading, . .
Cited – Aspect Contracts (Asbetos) Ltd v Higgins Construction Plc SC 17-Jun-2015
Aspect had claimed the return of funds paid by it to the appellant Higgins under an adjudication award in a construction contract disute. The claimant had been asked to prpare asbestos surveys and reports on maisonettes which Higgins was to acquire . .
Cited – Emmott v Michael Wilson and Partners Ltd ComC 12-Jan-2009
The claimant, a party to an arbitration, sought first an order requiring the defendant to comply with an order made by the arbitrator for the transfer of certain shares, and second an asset freezing order.
Held: The conditions for a peremptory . .

Lists of cited by and citing cases may be incomplete.

Arbitration, Contract

Leading Case

Updated: 01 November 2021; Ref: scu.259907

The court heard an appeal from an order upholding an award made by the Board of Appeal of the Grain and Feed Trade Association concerning the effect of the Prohibition clause in the GAFTA standard form of contract for delivery on f.o.b. terms of goods from Central and Eastern Europe in bulk or bags, generally known as Gafta 49.
Held: The sellers abandoned their arguments on mitigation. On the remaining issues, the Court affirmed the decision below.
Moore-Bick, Floyd, Chrisopher Clarke LJJ
[2013] EWCA Civ 1628, [2014] 1 Lloyd’s Rep 404
Bailii
England and Wales
Citing:
Appeal from – Bunge Sa v Nidera Bv ComC 29-Jan-2013
The Court was asked: ‘2.1 Is the application of the GAFTA prohibition clause limited to a case where it can be seen after the event that performance of the contract has in fact been prevented by the prohibition in question?
2.2. Does the GAFTA . .

Cited by:
Appeal from – Bunge Sa v Nidera Bv SC 1-Jul-2015
The court considered the effect of the default clause in a standard form of contract which is widely used in the grain trade. On 10 June 2010 the respondents, Nidera BV, whom I shall call ‘the buyers’, entered into a contract with the appellants, . .

These lists may be incomplete.
Updated: 17 July 2021; Ref: scu.518934

References: [1998] 1 Lloyd’s Rep 416, Times 13-Dec-1997
Coram: Clarke J
At common law the buyer’s remedy for failure to perform a contract of sale of goods is to claim damages for non-delivery. Where, as here, there was an available market, the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered.
Arbitration appeal from Gafta. Construction of default clause 28 in Gafta – Form 100.
This case cites:

• Appealed to – Bem Dis a Turk Ticaret S/a Tr -v- International Agritrade Co Ltd CA (Bailii, [1999] EWCA Civ 855)
  . .
• See Also – In the Matter of Arbitration Acts 1950-1979 and In the Matter of an Arbitration Bem Dis a Turk Ticaret -v- International Agri Trade Co Ltd CA (Bailii, [1999] EWCA Civ 566)
  . .

This case is cited by:

• Cited – Fleming & Wendeln Gmbh & Co -v- Sanofi Sa/Ag ComC (Bailii, [2003] EWHC 561 (Comm))
  The parties concluded a contract for the sale and purchase of 20,000MT up to 30,000MT at Sellers’ option Russian/Ukrainian black sunseed crop 1997. The price was to ‘be fixed for each shipment latest 15 days prior delivery . . In case . .
• Appeal from – Bem Dis a Turk Ticaret S/a Tr -v- International Agritrade Co Ltd CA (Bailii, [1999] EWCA Civ 855)
  . .
• See Also – In the Matter of Arbitration Acts 1950-1979 and In the Matter of an Arbitration Bem Dis a Turk Ticaret -v- International Agri Trade Co Ltd CA (Bailii, [1999] EWCA Civ 566)
  . .

References: [1983] 1 WLR 1469, [1983] 1 Lloyds Rep 503
Coram: Mustill J
The Chrysalis was trapped in the Shatt-al-Arab waterway in the course of the Iran-Iraq war, and the parties disputed the frustration of the charter contract.
Held: Mustill J set out stages for considering an appeal from an arbitration award by differentiating between points of law and of fact: ‘Starting therefore with the proposition that the court is concerned to decide, on the hearing of the appeal, whether the award can be shown to be wrong in law, how is this question to be tackled? In a case such as the present, the answer is to be found by dividing the arbitrator’s process of reasoning into three stages:
(1) The arbitrator ascertains the facts. This process includes the making of findings on any facts which are in dispute.
(2) The arbitrator ascertains the law. This process comprises not only the identification of all material rules of statute and common law, but also the identification and interpretation of the relevant parts of the contract, and the identification of those facts which must be taken into account when the decision is reached.
(3) In the light of the facts and the law so ascertained, the arbitrator reaches his decision.
In some cases, the third stage will be purely mechanical. Once the law is correctly ascertained, the decision follows inevitably from the application of it to the facts found. In other instances, however, the third stage involves an element of judgment on the part of the arbitrator. There is no uniquely ‘right’ answer to be derived from marrying the facts and the law, merely a choice of answers, none of which can be described as wrong.’
Only items at stage 2 are properly appealable: ‘The second stage of the process is the proper subject matter of an appeal under the 1979 Act. In some cases an error of law can be demonstrated by studying the way in which the arbitrator has stated the law in his reasons. It is, however, also possible to infer an error of law in those cases where a correct application of the law to the facts found would lead inevitably to one answer, whereas the arbitrator has arrived at another: and this can be so even if the arbitrator has stated the law in his reasons in a manner which appears to be correct – for the Court is then driven to assume that he did not properly understand the principles which he had stated.
Whether the third stage can ever be the proper subject of an appeal, in those cases where the making of the decision does not follow automatically from the ascertainment of the facts and the law, is not a matter upon which it is necessary to express a view in the present case. The Nema and The Evia show that where the issue is one of commercial frustration, the Court will not intervene, save only to the extent that it will have to form its own view, in order to see whether the arbitrator’s decision is out of conformity with the only correct answer or (as the case may be) lies outside the range of correct answers. This is part of the process of investigating whether the arbitrator has gone wrong at the second stage. But once the Court has concluded that a tribunal which correctly understood the law could have arrived at the same answer as the one reached by the arbitrator, the fact that the individual judge himself would have come to a different conclusion is no ground for disturbing the award.’
Statutes: Arbitration Act 1979 1(3)
This case is cited by:

• Cited – Penwith District Council -v- VP Developments Ltd TCC (Bailii, [2007] EWHC 2544 (TCC))
  The council sought to appeal against an interim arbitration award.
  Held: Leave to appeal was refused. The application was wholly unjustified. This was an appeal on the facts dressed up as an appeal on law. . .
• Cited – Guangzhou Dockyards Co Ltd -v- Ene Aegiali I ComC (Bailii, [2010] EWHC 2826 (Comm))
  The defendant ship owners sought to strike out the claimant’s appeal against an arbitration award to the extent that that appeal consisted of an appeal against the factual findings. The claimant argued that the parties had agreed that such an appeal . .