Atlanska Plovidba & Anor v Consignaciones Asturianas SA

Under section 18 of the Arbitration Act 1996, the court should ordinarily constitute the tribunal chosen by the parties. It may decline to do so only where the arbitral process cannot produce a fair resolution. Delay, expense, foreign evidence, parallel proceedings and a risk of inconsistent findings will ordinarily be insufficient.

A notice of arbitration is assessed substantively. It must identify the dispute with sufficient particularity and make clear an intention to refer it to arbitration. An incorrect reference to the contractual document will not invalidate the notice where the dispute and arbitration agreement are otherwise clear.

The claimants brought Admiralty proceedings seeking declarations of non-liability after a crane fell from their vessel during discharge in Spain. The defendant challenged service on the basis that the English court lacked jurisdiction. The claimants also applied under section 18 of the Arbitration Act 1996 for appointment of an arbitrator under an arbitration clause in the booking note.

The parties accepted that the booking note, rather than the bill of lading, governed their relationship. The central issues were whether the claimants had given an effective notice requiring appointment of an arbitrator, whether later events could satisfy the procedural conditions for section 18 relief, and whether the Spanish investigation and possible criminal proceedings justified refusing or postponing the appointment.

1. Jurisdiction. The Admiralty claim was set aside because the booking note contained an arbitration clause and no agreement submitting disputes to the English courts. The exclusive-jurisdiction wording was subject to the arbitration agreement.
2. Notice. Section 18 jurisdiction depends on failure of the contractual appointment procedure and absence of agreement on what should happen. A notice must identify the dispute sufficiently and show an intention to refer it to arbitration. The letter of 24 December 2003 satisfied those requirements. Its reference to disputes under the bill of lading did not invalidate it because the parties’ only dispute and the booking-note arbitration clause were clear. This approach accords with Vosnoc Ltd v Trans Global Projects Ltd [1998] 1 W.L.R. 101, Allianz Versicherungs-Aktiengesellschaft v Fortuna Inc. (The ‘Baltic Universal’) [1999] 1 W.L.R. 2117, Charles M. Willie & Co. (Shipping) Ltd v Ocean Laser Shipping Ltd (The ‘Smaro’) [1999] 1 Lloyd’s Rep. 225 and Seabridge Shipping AB v A. C. Orssleff’s Efef’s A/S [1999] 2 Lloyd’s Rep. 685.
3. Even if the first notice were ineffective, the later notice of 9 March 2004 and the defendant’s failure to respond meant that the conditions existed when the application was heard. Hendry v Chartsearch [1998] CLC 1382 demonstrated the distinction between jurisdiction to grant relief and procedural requirements governing when an application may be made.
4. Discretion. Section 18 does not confer an unfettered discretion divorced from party autonomy. The court should appoint the agreed tribunal unless satisfied that it could not be impartial or could not achieve a fair resolution. Delay and expense are ordinarily insufficient unless so serious as to undermine that fundamental requirement.
5. The Spanish proceedings did not justify refusal or adjournment. The investigation might not lead to a trial, the defendant could choose whether to pursue civil compensation there, and any claims by other parties would remain unaffected. Consistently with Donohue v Armco Inc. [2001] UKHL 64; [2002] 1 Lloyd’s Rep. 425, and the international arbitration authorities, the parties’ chosen tribunal had to be respected. The arbitrator could decide how to proceed in light of the Spanish proceedings.
6. The defendant’s application to set aside service succeeded. The claimants’ application for appointment of an arbitrator succeeded.