ST Shipping And Transport Pte Ltd v Space Shipping Ltd

For causation in an arbitration appeal, the question is whether the relevant act remains an effective cause. It need not be the sole cause. An intervening event displaces it only where its impact obliterates the original wrongdoing. Whether concurrent causes are effective causes is generally a question of fact. An arbitrator’s focus on whether circumstances have changed may be a legitimate evidential approach rather than a misdirection in law.

Where parties agree to assess loss as future events unfold, an arbitrator may defer final assessment and make interim partial awards. The interim award must not exceed the minimum sum recoverable on the issues determined, including by allowing a provisional deduction for a substantial possible saving.

The parties were respectively charterers and disponent owners of a vessel detained in Venezuela. The arbitrator had made successive partial awards concerning the charterers’ liability for the detention, continuing losses and expenses.

The charterers challenged the fourth partial award under section 69 of the Arbitration Act 1996, arguing that later conduct by the Venezuelan courts had become the sole effective cause of the continuing detention. The disponent owners separately challenged a provisional deduction for potentially saved drydocking expenses. The central issues were whether either challenge raised a question of law and whether the arbitrator had acted within his powers in making the provisional award.

1. Charterers’ causation appeal dismissed. The applicable question was whether the employment order remained an effective cause of the continuing detention. It need not have been the sole cause, but it had to be more than a mere “but for” cause. An intervening act would replace it only if it had sufficient impact to obliterate the original wrongdoing, applying The Kos and Borealis v Geogas.
2. The selection of an effective cause among concurrent causes is ordinarily a question of fact. So is the selection of one cause as direct or proximate. A misdirection on the legal principles may constitute an error of law, but the arbitrator had not misdirected himself. His reference to whether circumstances had changed was a legitimate and centrally relevant evidential consideration. His finding that the later Venezuelan proceedings were “of a piece” with the earlier events was a qualitative factual finding that the original causative potency remained.
3. The challenge was therefore an impermissible attempt to recast factual findings as an appeal on law. Permission was required and refused.
4. Disponent owners’ challenge dismissed. The parties had agreed that loss would be assessed as events unfolded. That “wait and see” approach was permissible where the extent of loss depended on future contingencies. It allowed the tribunal to defer final assessment while deciding issues capable of present determination.
5. Under The Kostas Melas, an interim partial award could award only the minimum sum shown to be recoverable. Since there remained a substantial possibility that drydocking costs would be saved, a provisional deduction was principled and sound. The tribunal’s case-management decision did not raise an appealable question of law under section 69 or the charterparty’s appeal clause.

The judgment concerned challenges to a fourth partial arbitral award dated 25 May 2017. The judgment itself records an earlier challenge to the first partial award, dismissed in [2016] EWHC 880 (Comm), but the present court dealt with the later challenges.