Transmountana Armadora v Atlantic Shipping: 1978

Donaldson J discussed the nature of a sealed offer in arbitration proceedings: ‘Although the respondents’ offer of settlement has been referred to as an ‘open offer’, this is a misnomer. Offers of settlement in arbitral proceedings can be of three kinds, namely, ‘without prejudice’, ‘sealed’ and ‘open’.
A ‘without prejudice’ offer can never be referred to by either party at any stage of the proceedings, because it is in the public interest that there should be a procedure whereby the parties can discuss their differences freely and frankly and make offers of settlement without fear of being embarrassed by these exchanges if, unhappily, they do not lead to a settlement.
A ‘sealed offer’ is the arbitral equivalent of making a payment into Court in settlement of the litigation or of particular causes of action in that litigation. Neither the fact, nor the amount, of such a payment into Court can be revealed to the Judge trying the case until he has given judgment on all matters other than costs. As it is customary for an award to deal at one and the same time both with the parties’ claims and with the question of costs, the existence of a sealed offer has to be brought to the attention of the arbitrator before he has reached a decision. However, it should remain sealed at that stage and it would be wholly improper for the arbitrator to look at it before he has reached a final decision on the matters in dispute other than as to costs, or to revise that decision in the light of the terms of the sealed offer when he sees them.’


Donaldson J


[1978] 1 Ll R 391

Cited by:

CitedCutts v Head and Another CA 7-Dec-1983
There had been a trial of 35 days regarding rights of way over land, which had proved fruitless, and where some orders had been made without jurisdiction. The result had been inconclusive. The costs order was now appealed, the plaintiff complaining . .
FollowedArchital v Boot Construction 1981
. .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Arbitration

Updated: 14 May 2022; Ref: scu.254331