Fiona Trust & Holding Corp & Ors v Privalov & Ors

A court may clarify its own sealed order under its inherent jurisdiction where clarification is needed to prevent the order obstructing related arbitration. The clarification must state the order’s objective meaning and effect, rather than the judge’s subjective intention. A court should not use case-management powers under the Civil Procedure Rules 1998 for the collateral purpose of assisting an arbitration. Claims stayed in favour of arbitration cannot be pursued in the litigation without lifting the stay. Claims available for trial cannot be reserved for a later trial without an appropriate order.

The Owners sought to pursue monetary claims consequential on their alleged rescission of time charterparties. The rescission issue had been stayed in favour of arbitration following earlier decisions in the same litigation. The Charterers relied on the order made after the 2009–2010 trial, which dismissed claims based on the alleged time-charter scheme.

The Owners applied for declarations, case-management orders, variation, correction under the slip rule and clarification under the court’s inherent power. The central issues were whether the consequential monetary claims remained extant and whether the court should clarify or vary its earlier order to assist the arbitration.

1. Applications granted in part. The court declined to use its discretionary powers under CPR 3.1 to enable the Owners to pursue consequential monetary claims. If the claims were stayed, they could not be pursued without an application to lift the stay. If they were not stayed, they had come on for trial with the other claims and had not been advanced.
2. A party cannot reserve claims for a later trial without obtaining an order separating them. The claims were in any event affected by the trial findings. The case had been pursued on the basis of dishonesty, and the finding that Mr Skarga was honest bound the parties. Any alternative basis for the relevant consequential claims had been abandoned and could not be resurrected.
3. The Court of Appeal’s stay order had to be construed objectively, having regard to the judgment it implemented and the matters to which it related. The court did not finally determine that construction because it might be an issue for the arbitral tribunal.
4. A declaration of the judge’s subjective intention was inappropriate. Its purpose would have been to influence an arbitral dispute about merger or estoppel, which the parties had agreed to arbitrate.
5. The slip rule under CPR 40.12 was not applicable. The sealed order gave effect to the judge’s intention to dismiss all claims before the court that had not been stayed, except where relief had been ordered. The fact that the judge had not considered a possible interpretation of the parties’ position did not amount to a relevant slip or omission.
6. The inherent jurisdiction recognised in CPR 40 BPD 4.5 was sufficiently wide to clarify the position. Its proper purpose was to prevent the litigation order from hampering the arbitration, rather than to supervise or control the arbitrators. Counsel were invited to draft an order specifying the intention identified in the judgment.