Sangamneheri v Bellamy

An arbitrator does not become a bailee of goods merely because an arbitration concerns those goods or because the arbitral rules permit provisional orders concerning property. Such powers regulate the arbitration and do not transfer possession or control of property from a party to the arbitrator. The uncollected-goods provisions of the Torts (Interference with Goods) Act 1977 concern physical treatment of goods and do not apply to the conduct of an arbitration. Applications founded on allegations of fraud or dishonesty require a proper factual basis; an honestly expressed legal opinion, expressly open to correction and subsequently corrected, cannot support such allegations.

The claimant’s claim against the defendant arbitrator had been struck out by Master Kay QC, and a limited civil restraint order had been made. Moulder J subsequently made an extended civil restraint order after a number of further applications. Applications left outstanding were restored before Males J, including a second joinder application, applications concerning alleged criminal convictions, and applications relating to an appeal from Master McCloud.

The underlying dispute arose from an exchange agreement concerning land in India and payment by instalments in gold bullion. The claimant alleged that the arbitrator and the Chartered Institute of Arbitrators had become bailees of the gold, and alleged fraud and dishonesty in the arbitrator’s appointment correspondence and acceptance declarations. The central issues were whether the claimant could maintain a claim under the Torts (Interference with Goods) Act 1977, and whether the outstanding applications had any arguable basis.

1. The outstanding applications were dismissed. Each was certified as totally without merit.
2. Under CPR 1.1, the court must deal with cases justly and at proportionate cost, including by allotting an appropriate share of court resources while allowing a party a fair opportunity to present its case. The claimant had received that opportunity despite a time limit on oral submissions.
3. The claimant’s proposed bailment case was no longer open at common law following the refusal of permission to appeal. In any event, the alleged goods were not shown to be specific property capable of being bailed.
4. Part 1 of Schedule 1 to the Torts (Interference with Goods) Act 1977 concerns uncollected goods and physical treatment of those goods. An arbitration is not such treatment, and neither the arbitrator nor the Institute accepted the goods for treatment.
5. The Chartered Institute rules permitting provisional orders concerning property did not give the arbitrator control of the property. They reflected the power contemplated by section 39 of the Arbitration Act 1996; the property remained under the control of the relevant party.
6. The allegation that the arbitrator’s statement concerning the law governing the arbitration was dishonest was untenable. The statement was an expressed opinion inviting comment, and the subsequent procedural order stated that UAE law governed the arbitration. The arbitration did not proceed because the claimant failed to pay the requested deposit. The further allegations concerning the arbitrator’s standard acceptance declarations had no evidential basis.

• High Court (Commercial Court): Master Kay QC struck out the claim on 7 July 2017 and made a limited civil restraint order.
• High Court: Moulder J later made an extended civil restraint order, leaving certain applications to be restored.
• High Court (Commercial Court): Males J dismissed the outstanding applications as totally without merit.