Pace Shipping Co Ltd of Malta v Churchgate Nigeria Ltd of Nigeria

When reviewing an arbitral award for serious irregularity, the court reads the award as a whole and fairly. It does not conduct minute textual analysis or seek to identify minor defects. Reasons are sufficient if they explain what the tribunal found, why it reached its conclusion and what that conclusion was.

For Carriage of Goods by Sea Act 1992, section 2(2)(a), the contractual or other arrangements made before the bill became spent must be the reason or cause of its transfer. A contractual entitlement to receive the bill will usually satisfy that requirement, but it is not essential. The provision is directed against trafficking in bills of lading and is not confined to transfers made pursuant to an express entitlement.

The claimant, owner of the vessel PACE, challenged a majority arbitration award concerning the defendant’s title to sue for cargo damage and short delivery. The tribunal had previously decided that the defendant lacked title to sue, but that decision was remitted following an appeal. On reconsideration, the majority found that the defendant acquired the bills of lading pursuant to pre-existing sale contracts and therefore had title under section 2(2)(a) of the Carriage of Goods by Sea Act 1992.

The claimant applied under sections 68, 69 and 70 of the Arbitration Act 1996, alleging inadequate or ambiguous reasons, errors of law and the need for further reasons.

1. Section 68. The tribunal had dealt with the issue remitted to it. Its majority found that the defendant was party to the sale contracts as principal, that payment had been made under those contracts, and that the transfer of the bills resulted from that payment. The reasons were not ambiguous or inexplicable. They were to be read as a whole and in a fair and reasonable way, without minute textual analysis. The applications based on sections 68(2)(d) and 68(2)(h) of the Arbitration Act 1996 therefore failed.
2. Section 69: first question. The proposed question whether the defendant had to possess a contractual entitlement to receive the bills had not been a question of law submitted to the tribunal. Permission to appeal on that question was refused. In any event, the court considered the issue and rejected the proposed restriction.
3. For section 2(2)(a) of the Carriage of Goods by Sea Act 1992, the relevant arrangements must be the reason or cause of the transfer. This will usually be shown by a contractual entitlement to receive the bill, but the statutory language does not require such entitlement in every case. The provision’s purpose is to prevent trafficking in bills of lading as pieces of paper giving rights against carriers.
4. The tribunal was entitled to infer that the sale contracts and payments made under them were the immediate and proximate cause of the transfer. The absence of evidence explaining every step between payment and endorsement made the inference debatable, but did not make it impermissible or obviously wrong. The majority’s conclusion was not open to serious doubt within section 69(3)(c).
5. Section 70. Further reasons were unnecessary because the tribunal’s reasons were adequate. The applications under sections 68, 69 and 70 were dismissed.

The judgment states that the tribunal’s first award was previously appealed and upheld on 12 June 2008, after which the title-to-sue issue was remitted to the tribunal. The present judgment records no citation for that earlier court decision.