Ocean Prefect Shipping Ltd v Dampskibsselskabet Norden AS

Arbitral proceedings fall within the meaning of judicial proceedings in regulation 14(14) of the Merchant Shipping (Accident Reporting and Investigation) Regulations 2012 where the arbitration determines civil liability. An arbitral tribunal’s powers over admissibility under the Arbitration Act 1996 do not displace that statutory restriction.

Permission to admit an MAIB report requires the court to decide whether the interests of justice outweigh likely prejudice to future safety investigations or international relations, having regard to the Chief Inspector’s views. The commercial value and evidential quality of the report did not outweigh the public interest in preserving candid safety investigations. Permission was therefore refused.

Ocean Prefect Shipping Ltd sought permission to rely on an MAIB report concerning the grounding of its vessel in an arbitration against Dampskibsselskabet Norden AS. The arbitration concerned an alleged breach of the charterers’ safe-port warranty.

The owners argued that court permission was unnecessary because admissibility was a matter for the arbitral tribunal under section 34(2)(f) of the Arbitration Act 1996. Alternatively, they argued that permission should be granted in the interests of justice. The charterers and the MAIB contended that regulation 14(14) applied and that permission should be refused.

The central issues were whether the arbitration constituted judicial proceedings and whether the statutory balancing exercise favoured admission.

1. Outcome. Permission to admit the MAIB report into the arbitration was refused. The parties would consequently need to remove references to the report from the factual and expert evidence to avoid breach of regulation 14(14).
2. Judicial proceedings. The phrase in regulation 14(17) is not exhaustive. Arbitration is judicial in character because arbitrators must conduct proceedings fairly and impartially under section 33 of the Arbitration Act 1996, and may determine civil liability while hearing and receiving evidence under section 38(5). The ordinary meaning and purpose of regulation 14(14) therefore include arbitral proceedings. Section 34(2)(f), concerning admissibility, relevance and weight, cannot permit an arbitral tribunal to ignore the regulation.
3. Statutory purpose. The statutory scheme is directed to improving maritime safety, not determining blame. Relevant parts of an MAIB report are generally inadmissible in proceedings concerned with attributing or apportioning liability unless the court is satisfied that the interests of justice outweigh likely prejudice to future safety investigations or to relations with another state or international organisation.
4. Balancing exercise. The court had to have regard to the Chief Inspector’s views. The evidence that admission would impair candid communications with witnesses and access to accident sites was accepted. The report’s independent quality and public availability were insufficient, particularly because the scheme expressly restricts its use for liability proceedings.
5. Evidence in the arbitration. The experts could be cross-examined on their opinions without the report. Although exclusion could cause some prejudice in testing the pilots’ evidence, the owners could challenge that evidence by other means. Their private commercial interests did not outweigh the public interest in preserving effective safety investigations and international cooperation.
6. The application had been made extremely late. Future applications under regulation 14(14) should be made well before the relevant hearing.