Central Trading & Exports Ltd v Fioralba Shipping Company

A challenge under section 67 of the Arbitration Act 1996 is a full judicial determination of jurisdiction. The court is generally entitled to receive evidence which was not before the arbitrators. That entitlement remains subject to ordinary procedural control, the overriding objective and the interests of justice. The court may exclude relevant evidence where it is presented selectively, does not comply with safeguards governing witness evidence, or would cause irremediable unfairness. An arbitrator’s procedural order does not bind the court, but deliberate non-compliance with such an order may be highly relevant. A party cannot use the award as an indication of evidential gaps which it may then seek to repair selectively on the section 67 challenge.

The claimant brought a section 67 challenge to an award by maritime arbitrators dismissing its cargo claim for lack of title to sue. The claim concerned rice carried under bills of lading subject to English law and London arbitration clauses. The claimant relied on the Carriage of Goods by Sea Act 1992 to contend that rights of suit had been transferred to it after the bills had become spent.

On the challenge, the claimant sought to rely on witness evidence, contemporary documents and a bank letter which had not been adduced before the arbitrators. The defendant objected, relying in particular on the claimant’s deliberate failure to comply with an order for full disclosure. The central issue was whether the new evidence should be admitted.

1. The application was a section 67 challenge concerning jurisdiction, although the award had been expressed as a determination of the substantive title-to-sue issue. The parties accepted that the challenge was available.

2. Section 67 requires a rehearing and a full judicial determination on evidence. The court must decide the jurisdictional issue for itself and is not limited to the arbitrators’ reasoning or to the evidence before the tribunal. This was consistent with Dallah Real Estate & Tourism Holding Company v Ministry of Religious Affairs of the Government of Pakistan, [2010] UKSC 46, and the approach in Azov Shipping Co v Baltic Shipping Co, [1999] 1 Lloyd's Rep 68.

3. The right to adduce new evidence is not unfettered. The court controls disclosure, witness statements, expert evidence and oral evidence under ordinary procedural principles, including the overriding objective and the interests of justice. A case management hearing may be required where the parties cannot agree the procedural framework.

4. The court is not bound by procedural rulings of the arbitrators. However, a party’s failure to comply with a clear disclosure order may be highly relevant. It would be unjust to permit selective documents designed to fill evidential gaps identified in the award, while withholding the fuller disclosure necessary to test them. The resulting prejudice could not fairly be remedied by submissions on weight, costs or an adjournment.

5. The proposed bank letter did not comply with the safeguards for witness evidence under CPR 32. It lacked, among other things, a statement of truth and a clear basis for the signatories’ knowledge. Evidence from a solicitor as to what an available witness had said was also inappropriate where no reason was given for the witness himself not supplying evidence. Proper disclosure was additionally required to permit effective testing of the assertions.

6. The claimant was therefore refused permission to rely on the new evidence. The section 67 hearing was limited to the material that had been before the arbitrators.

Not stated in the judgment.