ED & F Man Sugar Ltd v Belmont Shipping Ltd

Section 33 of the Arbitration Act 1996 requires an arbitral tribunal to give each party a reasonable opportunity to present its pleaded or advanced case. It does not require the tribunal to identify an alternative case which a party has not made, particularly where that party has expressly conceded the relevant point. This remains so where the arbitration proceeds on documents alone and the tribunal appreciates that a more favourable argument might have been available. A tribunal may ask whether a party wishes to advance a different case, but section 33 does not oblige it to do so. A failure to ask such a question does not ordinarily constitute the extreme procedural failure required for relief under section 68.

The claimant chartered the vessel MV Amplify from the defendant. The defendant claimed demurrage after loading at Santos. In written submissions, the claimant disputed the validity of earlier notices of readiness but expressly accepted that laytime commenced on 21 September 2009.

The arbitrators rejected the earlier notices and awarded demurrage. They noted that the claimant had not relied on The Happy Day [2002] 2 Lloyd’s Rep. 487, which might have supported a later commencement of laytime. The claimant challenged the award under section 68 of the Arbitration Act 1996, alleging a failure to act fairly under section 33. The issue was whether the tribunal had been obliged to raise that unadvanced argument.

1. The challenge under section 68 of the Arbitration Act 1996 was dismissed. The tribunal had given the claimant a reasonable opportunity to put its case. The claimant had made detailed written submissions, addressed the validity of the notices of readiness, and expressly conceded when laytime commenced.

2. The tribunal was not obliged by section 33 to alert the claimant to an argument based on The Happy Day [2002] 2 Lloyd’s Rep. 487. Raising that argument would have given the claimant an opportunity to advance a case different from the case it had chosen to present.

3. The observation of Waller LJ in The Magdalena Oldendorff [2008] 1 Lloyd’s Rep. 7 must be understood in context. It concerned a point already in issue and requiring determination. It did not impose a duty to invite a party to withdraw a concession or introduce an alternative case.

4. Section 68 is a long-stop remedy available only in extreme cases where the tribunal has conducted the arbitration so wrongly that justice calls for correction. Giving effect to a concession by an experienced charterer, without identifying a further argument which might have produced a better result, could not amount to substantial injustice of that kind. The court also relied on the caution in Pacol v Rossakhar [2000] 1 Lloyd’s Rep. 109 concerning the introduction of matters not in issue in document-only arbitrations.

5. Arbitrators may ask whether a party has considered advancing a different case, including in a document-only arbitration, but section 33 does not oblige them to do so.

The judgment records that an application for leave to appeal under section 69 of the Arbitration Act 1996 was unsuccessful. The present proceedings were a section 68 challenge to the arbitral award.