Five Oceans Salvage Ltd v Wenzhou Timber Group Company

An arbitrator who has made a valid final award is generally functus officio. A subsequent breach of natural justice or other procedural irregularity does not restore the arbitrator’s jurisdiction to make a further award. The appropriate remedy is an application under Arbitration Act 1996, section 68.

A tribunal does not breach its general duty merely because a party later asserts that its supposed representatives lacked authority, where the tribunal had reasonable grounds to believe that the party was represented. In those circumstances, there is no failure by the tribunal to comply with the agreed arbitral procedure.

Five Oceans Salvage Ltd obtained salvage awards against cargo interests, including Wenzhou Timber Group Company. Wenzhou resisted enforcement in China, asserting that it had not authorised Websters to represent it in the salvage arbitration and had not received the notices required by clause 7 of the Lloyd’s Standard Salvage Agreement clauses.

Five Oceans applied under sections 32 and 68 of the Arbitration Act 1996. It sought a determination that the arbitrator retained jurisdiction to issue a further award, or alternatively relief for serious irregularity arising from the alleged lack of notice and representation.

1. The applications under sections 32 and 68 of the Arbitration Act 1996 were dismissed.

2. The arbitrator was functus officio after making the valid final award. There was no basis for declaring that he retained jurisdiction to repair an alleged breach of natural justice by issuing a further award. Any such irregularity had to be addressed through an application under section 68.

3. The court extended time under section 79 because the claimant did not know until July 2011 that enforcement was unavailable and did not appreciate the possible section 68 remedy until Websters raised it in their defence.

4. The alleged breach of the tribunal’s general duty under section 33(1)(a) and (b) was not established. The arbitrator had no reason to investigate further whether WTG was represented by duly authorised representatives. Form 1 identified Websters as representing the cargo, and Websters’ conduct gave the clear impression that they were authorised.

5. For the same reason, there was no failure by the tribunal to conduct the proceedings in accordance with the agreed procedure for the purposes of section 68(2)(c). The alleged lack of authority was not a failure by the arbitrator.

6. The arbitrator’s fax did not amount to an admission of an irregularity for the purposes of section 68(2)(i). A fair reading of it showed only a preliminary willingness to consider an application and did not establish that an irregularity had occurred.