Sea Trade Maritime Corporation v Hellenic Mutual War Risks Association (Bermuda) Ltd.

Under the Arbitration Act 1996, a tribunal may determine different aspects of a reference in separate awards under section 47. That power may be exercised in the first award, including by reserving costs for a later award, and is not subject to section 57’s time limits.

Section 57 applies where a claim presented to the tribunal has not been dealt with. A claim is dealt with where the tribunal addresses it and deliberately postpones its determination. The section does not impose a timetable for a later award on an issue intentionally reserved for separate determination.

The claimant challenged an arbitral tribunal’s second interim award ordering it to pay 90 per cent of the defendant’s costs. The tribunal’s first interim award had determined preliminary jurisdictional and other issues, reserved costs, and stated that remaining issues would be determined on a further occasion if required.

The claimant contended that the tribunal had lost power to award costs because the time limits in section 57 of the Arbitration Act 1996 had expired. It argued that the costs claim had been presented but had not been dealt with. The central issue was whether the tribunal’s reservation of costs constituted dealing with the claim under section 57 and whether section 47 permitted the later award.

1. Application dismissed and leave to appeal refused. The tribunal had jurisdiction to make the later costs award, and the claimant’s challenge under sections 68 and 69 of the Arbitration Act 1996 failed.
2. Section 47 conferred an entirely general power to determine issues arising in a reference in more than one award and to determine only part of the claims in the first award. Nothing in the section prevented the tribunal from deciding in its first award that costs would be dealt with in a later award. The power was not dependent on a prior case-management order.
3. There was no procedural unfairness in reserving costs without further submissions. Neither party had addressed the tribunal on costs, and the tribunal’s decision to reserve the issue could not reasonably have come as a surprise.
4. A claim for costs had been presented for the purposes of section 57. Costs had been claimed in the points of claim, and the tribunal had a general duty under section 61 to determine recoverable arbitration costs.
5. Nevertheless, the costs claim had been dealt with rather than omitted. The tribunal had addressed the issue and deliberately determined that it would be the subject of a further award. Section 57 is remedial. Its purpose is to permit correction where a final award has failed to address a presented claim, as in Re Becker [1921] 1 KB 391. It does not impose a timetable for a second award concerning an issue intentionally reserved under section 47.
6. The contrary construction would create a trap and produce the perverse result that an appropriate decision to reserve costs would cause the parties’ costs entitlement to be lost.