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	England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Charles M Willie & Co (Shipping) Ltd v Ocean Laser Shipping Ltd (The Smaro) [1998] EWHC 1206 (Comm) (29 October 1998) URL: http://www.bailii.org/ew/cases/EWHC/Comm/1998/1206.html Cite as: [1999] 1 Lloyd's Rep 225, [1999] CLC 301, [1998] EWHC 1206 (Comm)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		St Dunstan's House
		29 October 1998

Mr Justice Rix:

There are before me two originating summonses which between them raise three questions about the jurisdiction of arbitrators. How, and in particular, when is an arbitration commenced? How, if at all, can a party to an arbitration agreement join an existing arbitration between other parties to the same arbitration agreement? Can arbitrators change their minds about giving leave to amend when once they have informed the parties of their decision?

These questions originate in a Memorandum of Agreement on the Saleform 1987 form dated 1 April 1990 made between Charles M Willie & Co (Shipping) Ltd as sellers and George Roussos Sons SA "or company to be nominated" as buyers of the motor vessel Celtic Ambassador which, following delivery under the MOA, was renamed the Smaro. In the event the company nominated to take delivery and transfer of the vessel was Ocean Laser Shipping Ltd, and it was in that name that the bill of sale dated 26 April 1990 was made out. On 21 November 1990 the sellers ("Willie") received a letter from Messrs Holman Fenwick & Willan ("HFW") who said that they acted for George Roussos Sons SA ("Roussos") as buyers of the vessel under the MOA, and enquired about an engine stoppage back in January 1988. Correspondence developed in which an allegation was made that Willie had been in breach of the MOA because at the time of delivery the vessel was suffering from average damage affecting class which had led to engine breakdowns in May 1987 and January 1988 (and again after delivery) and which had not been reported to class. Messrs Swinnerton, Ashley-Claydon ("SAC") were involved in that correspondence as solicitors to Willie.

On 12 March 1992 HFW telexed SAC to invite Willie to agree on the appointment of a single arbitrator under the arbitration agreement contained in clause 15 of the MOA. HFW continued to say that they represented Roussos as buyers. Three names were put forward to enable one of them to be agreed as a sole arbitrator. HFW said that if none of them could be agreed, then Willie should appoint their own arbitrator.

It is common ground that that telex marked the commencement of an arbitration between Roussos and Willie.

Clause 15 of the MOA provided as follows:

"15. Arbitration

If any dispute should arise in connection with the interpretation and fulfilment of this contract, same shall be decided by arbitration in the city of LONDON and shall be referred to a single Arbitrator appointed by the parties hereto. If the parties cannot agree upon the appointment of a single arbitrator, the dispute shall be settled by three Arbitrators, each party appointing one Arbitrator, the third being appointed by The London Maritime Arbitrators Association...

If one of the parties fails to appoint an Arbitrator - either originally or by way of substitution - for two weeks after the other party having appointed his Arbitrator has sent the party making default notice by mail, cable or telex to make the appointment, the party appointing the third Arbitrator shall, after application from the party having appointed his Arbitrator, also appoint an Arbitrator on behalf of the party making default..."

On 18 March 1992, after some intervening correspondence, SAC replied:

"Concerning your initiation of arbitration, our clients do not wish any of the 3 gentlemen you have proposed to sit as sole Arbitrator and accordingly when you have effected an appointment of your clients' arbitrator and given us due notification of the same we shall attend to the appointment of the Respondents' arbitrator within 14 days thereafter in accordance with clause 15...

On 3 April 1992 HFW informed SAC that they had appointed Mr Kazantzis as Roussos's arbitrator, and on 6 April SAC replied to say that they had appointed Mr Newcomb as Willies's arbitrator.

HFW's telex of 20 May 1992

Then on 20 May 1992 there came the following telex from HFW. It is one of the critical documents in the case and the primary basis for the contention of Ocean Laser Shipping Ltd ("Ocean Laser") that they as well as Roussos had commenced arbitration against Willie (well) before the expiry of the limitation period. The telex was addressed to Mr Kazantzis and was copied to Mr Newcomb and to SAC, and read as follows:

"We refer to our correspondence...appointing you as arbitrator on behalf of G Roussos Sons SA. You have of course accepted this appointment.

"We should be grateful if, for the avoidance of doubt, you would also accept appointment as arbitrator, again in respect of all disputes arising under the above captioned MOA with Charles M Willie and Co (Shipping) Limited, on behalf of Ocean Laser Shipping Limited."

To that telex SAC replied by letter dated 21 May 1992 to Mr Kazantzis, with copies to Mr Newcomb and to HFW:

"We are in receipt of Messrs Holman Fenwick and Willan's telex yesterday in which they purport to extend your appointment to cover any claims by a party identified as Ocean Laser Shipping Limited.

"Please be advised that

1. We have no idea who Ocean Laser Shipping Limited.

2. The MOA dated the 1st April 1990 is a contract between our clients and G Roussos Sons SA who have initiated this arbitration.

3. Our clients have no contract and consequently there is no agreement to arbitration with Ocean Laser Shipping Limited.

"Thus we dispute the validity of your appointment on behalf of this company."

On 3 June 1992 Mr Kazantzis replied to HFW with copies to Mr Newcomb and SAC to say that he was willing to accept appointment as Ocean Laser's arbitrator, but that in the light of SAC's letter he looked forward to further advice about the contractual basis of his appointment.

It would have been easy enough for either Willie or Ocean Laser (or Roussos) to have pointed out to their respective solicitors (if they were unaware) as well as arbitrators that Ocean Laser were the ultimate buyers of the vessel under the MOA. Unfortunately, however, they do not appear to have done so. On the limited evidence before me, I do not know why that was so. The affidavit of Mr Swinnerton merely states that this correspondence was being handled by his partner Mr Ashley-Claydon, and adds "I assume that he did not have a copy of the Bill of Sale before him". Willie, however, would have known the true position, as of course would those instructing HFW. Moreover, Mr Ashley-Claydon presumably had a copy of the MOA, in which the buyers were stated to be not merely Roussos, but Roussos "or company to be nominated". If the matter had been sorted out at that time, then none of the ensuing complications would have occurred.

As it is, SAC's reaction to the appointment by Ocean Laser of Mr Kazantzis as their arbitrator went unanswered. In due course, but not until 5 November 1993 Roussos and Ocean Laser served their points of claim on Willie. Paragraph 1 pleaded that Roussos had agreed to purchase the vessel under the MOA "on its own behalf and or on behalf of" Ocean Laser: both claimants were defined as the "buyers" for the purposes of the pleading.

On receipt of these points of claim SAC wrote to the arbitrators and HFW as follows:

"In May 1992 our opponents ^[1] sought to appoint Mr Kazantzis as Arbitrator on behalf of Ocean Laser Shipping Limited and we made clear in our letter dated 21st May 1992 that neither we nor our clients had any idea as to the identity of Ocean Laser and that there was no agreement to arbitrate with that company.

"Nothing further has been provided by our opponents at all as to Ocean Laser and accordingly our clients' straightforward position is that there is no arbitration agreement with this company and Sellers and so no basis for you and your co-arbitrator to deal with any claim this company may have.

"As you and your co-arbitrator will see, no explanation at all is offered in the Points of claim as to the alleged involvement of Ocean Laser and we can see no basis at all for this party to be included as a Claimant and any Defence served by us will be to the claim of Messrs G Roussos Sons SA only."

It appears from this letter that SAC had consulted their clients, Willie, about the purported claim of Ocean Laser. Since Willie must have known that they had transferred their vessel to Ocean Laser, it is hard to understand their "straightforward position". Be that as it may, HFW's reply is the other critical document relied on by Ocean Laser as supporting their claim to have commenced arbitration proceedings against Willie.

HFW's letter dated 12 November 1993.

HFW responded to SAC's letter by the following letter dated 12 November 1993. It was addressed to the two arbitrators, and copied to SAC. It read:

"We refer to Swinnerton Ashley-Claydon's letter to you of 8th November relating to the question of the jurisdiction to deal with any claim by Ocean Laser.

"The Memorandum of Agreement states in lines 1 to 2 that G Roussos Sons SA, of 1 Dimosthenous Street, Piraeus, Greece or company to be nominated hereinafter called the "Buyer", have today bought Motor Vessel "CELTIC AMBASSADOR".

"For this reason we appointed Mr Kazantzis as our Clients' Arbitrator both on behalf of G Roussos Sons SA and on behalf of Ocean Laser Shipping Limited. The Points of Claim further provide that the first claimant, i.e. G Roussos Sons SA on its own behalf and/or on behalf of Ocean Laser Shipping Limited as Buyers agreed to purchase the vessel.

"No doubt if Messrs Swinnerton an/or the Tribunal require further clarification of the point, you will let us know."

On 29 November 1993 HFW served an amended points of claim on behalf of Roussos and Ocean Laser. The amendments were not significant.

On 18 February 1994 points of defence were served on behalf of Willie. They were headed as between only Roussos and Willie, and began with a "Note" as follows:

"The present tribunal (Messrs Newcomb and Kazantzis) has been appointed and has jurisdiction only in respect of disputes between the Claimants and the Respondents named above. If arbitration has been commenced on behalf of Ocean Laser Shipping Limited, the tribunal is not complete in respect of that arbitration. The present pleading is served in respect only of the claim by G Roussos Sons SA and without prejudice to the Respondents' case that the tribunal has no jurisdiction over the claim of Ocean Laser Shipping Limited."

The Note did not say that arbitration had not been commenced between Ocean Laser and Willie, but raised the question whether it had been. Paragraph 1 of the points of defence then stated that it was not admitted that Roussos had made the MOA on behalf of Ocean Laser and that no admission was made as to which if either of them was a party to the MOA.

If arbitration had been commenced on behalf of Ocean Laser, and if, as Willie's prefaced Note submitted, the tribunal was not complete in respect of that arbitration, the fault lay with Willie, for they were obliged either to agree a sole arbitrator or to appoint their own. It has not been submitted to me on behalf of Willie that Ocean Laser was not a party to the MOA or not entitled to invoke its arbitration clause.

Thus even after HFW had finally explained the basis of Ocean Laser's joining with Roussos in making claim under the MOA, Willie continued to throw down their jurisdictional gauntlet. It might be thought that any difficulty caused by the fact that Ocean Laser's appointment of Mr Kazantzis came shortly after Roussos's appointment would have been sorted out at that time at latest, but apparently it was not to be.

Instead, the arbitration made slow progress. So much so that, when on 6 April 1998 Roussos and Ocean Laser applied to re-amend their points of claim, Willie responded on 14 April 1998 by applying to the arbitrators to dismiss Roussos's claim for want of prosecution. A hearing took place on 6 and 15 May 1998. In the meantime Mr Lugg had been appointed as third arbitrator. At that hearing the following matters were argued: (i) Whether the arbitrators should strike out Roussos's claim; (ii) Whether Ocean Laser were parties to the arbitration (albeit it was recognised that the arbitrators ultimately did not have power to decide their own jurisdiction); (iii) Whether, if Ocean Laser were parties, their claim should also be dismissed for want of prosecution; and (iv) Whether Roussos and/or Ocean Laser should have leave to amend (in fact to re-re-amend) their points of claim.

It was agreed that the arbitrators would give an unreasoned decision in the first instance on the amendment application, without delaying until the time when they would render a reasoned decision on the other issues.

On 21 May 1998 the tribunal made an unreasoned order allowing the proposed amendments. Mr Kazantzis wrote a letter on behalf of the tribunal informing the parties' solicitors that:

"We are satisfied that the appropriate course would be to allow the amendments as pleaded."

On 14 July 1998 the tribunal published their "Interim Final Award" wherein they held that Willie's application for dismissal of the claim for want of prosecution failed, and that the tribunal had jurisdiction to determine the claims of Ocean Laser.

On 23 July 1998 the tribunal had a surprise for the parties, when Mr Kazantzis sent them a letter to say that on further reconsideration they had changed their minds about one of the amendments which they had previously allowed. This was paragraph 4A of the re-re-amended points of claim, in which Roussos and Ocean Laser pleaded a telex from brokers dated 30 March 1990 (the day before the MOA was signed) wherein it was stated that "main engine had been operated without problems for years". The claimants wished to rely on this telex to found a misrepresentation by Willie inducing the MOA.

In a letter to the tribunal dated 24 July 1998 HFW protested at this change of heart, saying that they could not imagine on what basis the tribunal had reversed their decision, but that in any event the tribunal had no power to alter their decision. On 28 July 1998 Mr Kazantzis replied on behalf of the tribunal to explain their decision further, as follows:

"As explained, our original decision in respect of the application for amendment of Clause 4(a) of the Points of Claim was made before we had completed our comprehensive review of all the papers. When we did so, it seemed to us we ought to exercise our discretion against allowing the amendment.

"Although a plea of misrepresentation was already on the record paragraph 4(a), as presently worded pleads a fresh misrepresentation not previously alleged, which will entail a new factual enquiry.

"It is quite common for arbitrators to reconsider interlocutory decisions. Indeed it is sometimes a cause of complaint that in arbitration procedure interlocutory decisions are not as firm as they are in the Courts. However in some ways we consider this a strength rather than a weakness although this flexibility should not be abused. We hope that you would not consider that we have done so in this case...

"If you wish to press the matter we will of course consider any further representations you may wish to make with a view to persuading the Tribunal to changing its mind yet again..."

The claimants did wish the arbitrators to reconsider the matter and therefore a further hearing was held on 23 September 1998. On 1 October the arbitrators published their "Second Interim Final Award" in which they held that the claimants' application to amend so as to insert paragraph 4A of the re-re-amended points of claim failed. They gave reasons for their decision. Although those reasons, which went beyond the reasons given previously, were before me, they were not specifically referred to in the submissions of counsel. They may, however, hereafter be the subject of further debate, and therefore I shall say nothing about them.

In the meantime the decisions of the arbitrators had led both Willie on the one hand and Roussos and Ocean Laser on the other hand to issue their respective originating summonses so as to bring before the Court the question of the arbitrators' jurisdiction. Willie's originating summons was dated 21 July 1998 and brought solely against Ocean Laser. It asked for various declarations, primarily that Ocean Laser had not validly or at all commenced an arbitration against them

"in that at no stage have they served upon the Plaintiffs a notice calling upon them to appoint an arbitrator or to agree such an appointment."

Roussos and Ocean Laser issued their originating summons against Willie on 13 August 1998. It asked for declarations that the arbitrators' decision of 23 July 1998 purporting to reverse their decision of 21 May 1998 allowing the amendment was made without jurisdiction and that their decision of 21 May 1998 was final and binding.

Had Ocean Laser commenced arbitration against Willie in 1992 or alternatively 1993?

This was the first issue debated before me. Although it was rightly submitted that I was only concerned with jurisdiction and not matters of time bar, it was common ground that if I were to hold that Ocean Laser had commenced arbitration against Willie by at latest the time of HFW's letter of 12 November 1993, then Ocean Laser's claim was not time barred.

Argument before me proceeded on the basis that no Arbitration Act before the Arbitration Act 1996 (the "1996 Act") contained any provision relating to the commencement of arbitration^[2] and that the provisions of section 34(3) of the Limitation Act 1980 (the "1980 Act") were therefore to be applied by analogy. Section 34(3) provides as follows:

"For the purposes of this Act and of any other limitation enactment an arbitration shall be treated as being commenced -

(a) when one party to the arbitration serves on the other party or parties a notice requiring him or them to appoint an arbitrator or to agree to the appointment of an arbitrator; ..." (emphasis added).

The predecessor to section 34(3) of the 1980 Act was section 27(3) of the Limitation Act 1939 (the "1939 Act") which provided as follows:

"For the purpose of this Act...an arbitration shall be deemed to be commenced when one party to the arbitration serves on the other party or parties a notice requiring him or them to appoint an arbitrator or to agree to the appointment of an arbitrator, or, where the arbitration agreement provides that the reference shall be to a person named or designated in the agreement, requiring him or them to submit to the person so named or designated."

It was this latter provision that was considered by the Court of Appeal in the leading case of Nea Agrex SA v. Baltic Shipping Co Ltd [1976] 1 QB 933. There charterers relied on the following passage in a letter to owners as constituting the requisite notice for the commencement of arbitration:

"Please advise your proposals in order to settle this matter, or name your arbitrators."

It is important to note that the arbitration agreement between the parties in that case called for a single arbitrator, so that the charterers were mistaken to call upon the owners to "name your arbitrators". The one year Hague Rules time bar applicable to the parties' charter expired between the time of the charterers' letter just quoted and anything else that might have been relied on as the commencement by the charterers of an arbitration.

The Court of Appeal held that the letter sufficed to commence arbitration. In doing so, the Court did not apply the Limitation Act directly, but by analogy. The principal argument deployed on behalf of the owners as to why the letter was insufficient was that the request to appoint an arbitrator was contingent on the absence of settlement proposals. A secondary argument was that the charterers had used the wrong formula, ie had failed to use the form of words applicable to a tribunal composed of only a single arbitrator. The Court rejected the first argument on the ground that the charterers' letter was sufficiently clear to be interpreted as a request for arbitration made there and then coupled with a willingness to come to an amicable settlement if satisfactory settlement proposals were made (see Lord Denning MR at 945D/F, Goff LJ at 951C, Shaw LJ at 955A). The second argument was rejected also, on the ground that the use of the wrong formula made the notice irregular, but not a nullity (per Goff LJ at 950H) or that it was sufficient that the notice should communicate an intention to resort to arbitration and that the other party "should do something on his part in that regard" (per Shaw LJ at 954H). Lord Denning did not deal with the second argument expressly, but appears to have wrapped it up in his general ratio that the letter should be construed "as a request for the difference to be submitted to arbitration" (at 945F).

It was, I think, the combined force of the owners' two arguments that led the members of the Court of Appeal to consider to what extent the notice necessary to commence arbitration should be expressly in the form required by the statute. Before me, there have been opposing arguments as to whether such a notice must be expressly and precisely in the terms of the statutory language. The question has assumed particular importance in this case for two reasons. The first is that, unlike the position in Nea Agrex, there is here no express language in HFW's telex or letter about the appointment by Willie of any arbitrator. The second is that in a recent decision Judge Jack QC, sitting as a deputy High Court Judge, has decided that express and precise language must be employed for a notice to be effective: see Vosnoc Ltd v. Transglobal Projects Ltd [1998] 1 WLR 101.

Lord Denning began as though the conditions for the commencement of arbitration were to be exactly followed, even though the Limitation Act was being applied only by way of analogy. Thus he said (at 944F/G):

"Whilst it is undesirable to introduce too much technicality, I think it is important that there should be clear rules as to when an arbitration is deemed to have commenced. There must, of course, be an arbitration agreement, that is, "a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not": see section 32 of the Arbitration Act 1950. In this charterparty clause 23 was such an agreement. It is deemed to include a provision that the reference shall be to a single arbitrator: see section 6 of the Act of 1950.

"In order to commence the arbitration, there must, I think, be a notice in writing served by one party on the other party. This notice must contain a requirement. It must require the other party to do one or other of two things: either (1) "to appoint an arbitrator" or (2) "to agree to the appointment of an arbitrator.""

Almost immediately, however, Lord Denning started to consider what the position would be if the notice's "requirement" that the other party do something was not spelled out expressly. Thus at 944H, in considering the case of a reference to two arbitrators, he said:

"In such a case the arbitration is deemed to commence when the one party, expressly or by implication, requires the other party to appoint his arbitrator. If he simply says "I require the difference to be submitted to arbitration in accordance with our agreement" that is sufficient to commence the arbitration: because it is by implication a request to the other to appoint his arbitrator" [emphasis added].

Similarly, in discussing the case of a reference to a single arbitrator, Lord Denning said (at 945B):

"It seems to me that a notice which says "I require the difference between us to be submitted to arbitration " is sufficient to commence the arbitration: because it is by implication a request to agree to the appointment of an arbitrator" [emphasis added].

Lord Denning continued (at 945C/F):

"So in any case a simple notice in writing requiring the difference to be submitted to arbitration is deemed to be commencement of the arbitration.

"Apply these considerations to the present case. The charterers' agents on May 31, 1972, presented to the owners' agents a detailed claim for damages demanding immediate payment, and then they said: "Please advise your proposal in order to settle this matter or name your arbitrators."

"Mr. Rokison says that that request is equivocal. It gives the shipowners an alternative. It does not amount to an unequivocal request for arbitration. So it cannot be deemed to be the commencement of the arbitration. That seems to me too legalistic an approach. In a commercial dispute, a letter requesting an arbitration should not be construed too strictly. The writer should not be impaled on a time bar because he writes in polite and courteous terms, or because he leaves open the possibility of settlement by agreement. Suppose the charters had written to the owners: "Unless you are prepared to settle the matter amicably, we must ask you to agree to an arbitrator." That would, to my mind, be quite sufficient. When such a letter follows upon a genuine claim promptly made, it should be interpreted as a request for arbitration - a request made then and there - coupled with a willingness to come to an amicable settlement. The arbitration is deemed to commence with the sending of the letter, and time no longer runs against him.

"Likewise with the letter in this case, it can and should be construed as a request for the difference to be submitted to arbitration - with a saving that the request will be withdrawn if a settlement can be reached. That is sufficient to commence the arbitration."

For my part, I would stress Lord Denning's deprecation of too legalistic an approach to, or too strict a construction of, the notice necessary to the commencement of an arbitration. It would be sufficient in his view if the notice can be construed, expressly or implicitly, as a request for the dispute to be submitted to arbitration.

Goff LJ began his consideration of this point by raising a question regarding the proper construction of section 27(3) of the 1939 Act itself. Thus at 949H/950C he said:

"That section poses some problems and there appears to be no authority as to its construction. It is, as the charterers submit, a "deeming section," but the question is whether, as they say, the methods prescribed are deemed to be sufficient without prejudice to any other way in which arbitration may in fact be commenced, or whether the statutory methods are the only ones for purposes of limitation. In my view, the latter is correct, because the steps envisaged by the section are such as by their very nature would commence an arbitration and do not require to be deemed such, although I agree with Lord Denning M.R. that the necessary request may be implied. However, it is not necessary to reach a final decision on that point.

"The section I think clearly envisages that a party who wishes to commence arbitration will, when there are to be arbitrators on both sides, call upon his opponent "to appoint an arbitrator," and when the reference is to a single arbitrator will call upon him "to agree to the appointment of an arbitrator." However, if he adopts the wrong course, that would not in my judgment make his requisition a nullity, or prevent arbitration commencing. It would be no more than an irregularity capable of being remedied."

In that passage it seems to me that Goff LJ is saying that (a) he does not have to reach a final decision as to whether section 27(3) is exclusive or inclusive as to the conditions for commencing arbitration; (b) even if section 27(3) is exclusive, he agrees with Lord Denning that the necessary request specified in the section may be implied; and (c) in as much as the express language of requisition is in the wrong terms, the effect is not to render the notice ineffective, merely irregular. Goff LJ appears to me there to be going beyond permitting the necessary request to be implied as well as express, for the concept of remedying a defect in language is not a process of construction or implication. That concept seems to me to be rather akin to and derived from the general principle in civil procedure that many breaches of the Rules of the Supreme Court may be regarded as mere irregularities which can be cured in the discretion of the court, as distinct from failures of condition precedent which undermine the essential validity of some document. I am diffident whether such a concept can be introduced into a consensual process such as arbitration: but it underlines what seems to me to be one of the ultimate lessons of the case, namely that the wording of a notice in writing requisite for the commencement of arbitration is not to be regarded strictly or formulaically.

Shaw LJ also began with some observations on the effect of section 27(3), but for his part he thought that the section did not purport to lay down an exclusive rule for the commencement of arbitrations. He said (at 954E/955A):

"It is to be observed that this is a deeming provision designed to ascertain for the purposes of the Limitation Act 1939 the point of time at which an arbitration is to be regarded as having commenced. It does not exclude other direct means of establishing the commencement of an arbitration. If a general principle is to be extracted from section 27(3) it seems to me that where a dispute arises which is within the scope of a pre-existing agreement to submit disputes to arbitration, then an arbitration is commenced when one party gives notice to the other party intimating that he proposes to invoke the arbitration agreement and requiring that other party to take some step towards setting an arbitration in train. By analogy with the procedure prescribed in section 27(4) of the Act of 1939, such a notice must be in writing and served in accordance with the rules there set out. The commencement of the arbitration would coincide with the service of the notice upon the other party.

"The giving of such notice is a matter inter partes and is a procedural and not a decisive step. Accordingly, its form and terms do not call for an excessively strict scrutiny. If, in substance, a party communicates (i) an intention to resort to arbitration and (ii) a requirement that the other party should do something on his part in that regard, this will in general suffice to define the commencement of the arbitration or, for the purposes of article III, r.6, of the Hague Rules, the date when "suit is brought."

"Applying these principles to the present case, I would hold that the letter of May 31, 1972, addressed to the shipowners was sufficient to mark the commencement of the arbitration. I read that letter as declaring that arbitration is to be resorted to..."

Thus Shaw LJ agreed with the other members of the Court that the notice's terms should not be construed over-strictly, and that it would suffice as long as its substance was to communicate an intention to invoke the reference of a dispute to arbitration and that its recipient was expected to act upon it.

The issue was revisited in the following year in Surrendra Overseas Ltd v. Government of Sri Lanka [1977] 1 WLR 565. The claimants' letter there stated (at 570A):

"In view of the attitude taken by charterers in their calculation of lay-time, owners will be putting the matter to arbitration. We will be advising you concerning details of the arbitrator appointed in due course."

Mr Justice Kerr held that this letter failed to commence arbitration, since it merely told the charterers that they could sit back and await developments. He added (at 571F/G):

"It may be that if the [owners] had merely said "We hereby require this dispute to be referred to arbitration," the position would be different. It might then be said that they had also impliedly added: "We therefore require you to appoint your arbitrator." I will assume that this would be so, though I do not so decide, any more than did the majority in the Nea Agrex case. But even on this assumption I think that this letter does not go far enough. It merely referred to an arbitration in the future and contains no present requirement of any kind. For the purposes of limitation the commencement of an arbitration must be clear and unequivocal. This letter is vague and couched in the future tense."

In The Rimon [1981] 2 Lloyd's Rep 640 Robert Goff J referred to Lord Denning's judgment in Nea Agrex in holding that two telexes, one of which said "...settling of claims of both sides will be done by arbitrators according to gafta rules" and the other of which said "the point...shall be decided by arbitrators", each amounted to an implied request to the receiving party to appoint his arbitrator, and therefore to the commencement of arbitration. That is an actual decision by an eminent commercial judge, that an implied request suffices to commence arbitration.

It may have been observed that when section 34(3) of the 1980 Act re-enacted section 27(3) of the 1939 Act in almost identical terms, the word "deemed" ("shall be deemed to be commenced") in the 1939 Act had been changed to the word "treated" in the 1980 Act ("shall be treated as being commenced"). It is hard to think that that change does not in some way arise out of the difference of opinion expressed by Goff LJ and Shaw LJ in Nea Agrex: but it is not easy to say how, if at all, the effect of the section was intended to have been thereby altered.

Vosnoc Ltd v. Transglobal Projects Ltd [1998] 1WLR 101 is a case on the 1980 Act. Its facts are essentially identical to those of Nea Agrex, save that the material part of the letter relied on as a notice commencing arbitration was in the following terms (see at 104C):

"By this letter the dispute between our respective companies is referred to the arbitration of three arbitrators in London pursuant to the provisions of clause 17.8 of the contract of affreightment such arbitration to be conducted in accordance with the rules of the London arbitrators."

Thus there was no express request to appoint an arbitrator, although it seems that Judge Jack QC was prepared to view the letter as an implied request to appoint. However, having considered the Nea Agrex case, he concluded that he was not bound to follow Lord Denning's view that a notice of request to appoint could be implied as well as express, since, even though it was in his view part of Lord Denning's ratio decidendi, it was not, he thought, shared by the other members of the Court of Appeal. He regarded Goff LJ as saying that, although he agreed with Lord Denning, he did not have to decide that point. On the point of principle, he then reasoned as follows (at 110A/F):

"Sections 27(3) of the Act of 1939 and 34(3) of the Act of 1980 spell out what is to be done to commence an arbitration and thereby to stop limitation running...Further, although the correct construction of a statutory provision may be affected by its context, if a statutory provision provides for a notice requiring something, it is ordinarily to be expected that the notice must do so expressly.

"There is, I think, a contrast between the UNCITRAL Model Law and the English statutes, which shows a difference in approach between them. English law has taken the approach that something more must be done than to request that the matter be referred to arbitration. A step must be taken towards getting the arbitration under way, a step towards the appointment of the tribunal...

"I can see factors of policy that point the other way. Thus many commercial men would think that an arbitration is commenced by giving notice of arbitration, and that this should be sufficient for the purposes of the Hague Rules. Many, many arbitrations are held in England involving foreign parties. When the possibility of arbitration arises they may or may not have English solicitors to advise them. They are otherwise unlikely to be familiar with the provisions of the English law as to limitation. There is nothing sophisticated about the implication made by Lord Denning M.R. in the Nea Agrex case [1976] Q.B. 933. Provided the notice makes plain that the arbitration is to commence at the date of the notice, it is plain that the respondent is required to do what the arbitration agreement provides, namely to appoint his arbitrator. However, these are reasons for framing the statutory provisions in another way, rather than for reading them in another way. English law, has it seems to me, taken the policy decision that, to stop time running, the notice must take a step further than a requirement to arbitrate."

The UNCITRAL rule relating to the commencement of arbitration referred to in that passage is contained in article 21 of the Model Law and provides:

"Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent."

Before turning to the submissions of the parties before me, I should also mention what MUSTILL & BOYD on Commercial Arbitration, 2nd Edition, 1989, have to say on the subject. The following is found at page 199:

"It is important to bear in mind that each of the forms of notice contemplated by section 34(3) is concerned with the appointment of an arbitrator by the defendant. A notice by the claimant that he himself has appointed an arbitrator is not a sufficient compliance with the statute, and still less is a mere notice of claim. The latter might, depending on the terms of the contract, be sufficient to prevent the claim from becoming barred by a contractual limitation clause, but it would not be relevant to a statutory time limit."

Moreover, footnote 4 on the same page, in citing Nea Agrex, adds:

"This case probably represents the limit of the Court's indulgence: see Surrendra Overseas Ltd v. Government of Sri Lanka...Both cases leave open the question whether 'I require this dispute to be referred to arbitration' is sufficient."

On behalf of Ocean Laser, Mr Steven Berry submits that Vosnoc was wrongly decided: that an implied request to appoint an arbitrator suffices and that Nea Agrex decided as much; that the telex of 21 May 1992 or the letter of 12 November 1993 constituted such an implied request; that in any event the Limitation Act was relevant only to the question of limitation, with which I was not concerned, and not to the question of jurisdiction, which was the only question before me; and that even if the Act was directly relevant, it was not exhaustive as to the means by which an arbitration could be commenced.

On behalf of Willie, Mr Michael Nolan submitted precisely to the contrary: that Vosnoc was rightly decided and only an express request would suffice; that in any event neither telex nor letter could be construed as an implied request, and that even if either of them would otherwise be construed as such, it could not take effect since it was addressed not to Willie but merely copied to Willie's solicitors in the Roussos arbitration, SAC, who had no authority from Willie to receive a notice commencing a further arbitration on behalf of Ocean Laser; and that the Limitation Act laid down the sole means by which an arbitration could be commenced.

I must therefore first decide whether Vosnoc was rightly decided. It is with respect for the considerations which led Judge Jack QC to determine as he did that I must state that in my judgment an implied request will suffice, and that Nea Agrex is either binding authority or at any rate contains powerfully authoritative dicta to that effect. I would seek to put the matter in the following way.

First, it seems to me that in Vosnoc sight was lost of the fact that the Limitation Act is not directly relevant to the question of the commencement of arbitration, but only relevant by analogy. Thus it was a cornerstone of Judge Jack's reasoning that -

"if a statutory provision provides for a notice requiring something, it is ordinarily to be expected that the notice must do so expressly" (at 110B).

So also Judge Jack rejected the policy considerations for a more flexible rule on the ground that -

"these are reasons for framing the statutory provisions in another way, rather than for reading them in another way" (at 110F).

This may have reflected the way in which the matter was argued before him, but it should be recalled that in Nea Agrex, which was also concerned with a one year time bar under article III, rule 6 of the Hague Rules, the Court of Appeal were satisfied that the development of their principles for the commencement of arbitration was derived only by analogy from the 1939 Act.

Secondly, those policy considerations for a more flexible rule are very powerful. Whether because he regarded himself as directly applying a statutory code, or because he was influenced by Mr Justice Kerr's dictum in Surrendra Overseas Ltd v. Government of Sri Lanka [1977] 1 WLR at 570 that "For the purposes of limitation the commencement of an arbitration must be clear and unequivocal", a dictum strongly relied on by Mr Nolan before me, Judge Jack felt unable to give weight to those policy considerations. In my judgment, however, they indicate that a strict, formulaic, approach is undesirable, unless statute or precedent renders it inevitable. There is no sign that the more flexible approach adopted both in the decision and the dicta of Nea Agrex has led to any difficulties over the last twenty years.

Thirdly, Nea Agrex is to my mind authority and probably binding authority that an implied request, will suffice, indeed that the question is not even a matter of pure implication, but rather whether the notice sufficiently, or in substance, makes clear that the respondent is expected to act on the claimant's submission of a dispute to arbitration, on his invocation of the arbitration clause, so as to participate in the submission of the relevant dispute to arbitration. In their different ways, all three judges in Nea Agrex made it clear, as part of the reasoning necessary for their decision, that express language in the terms of the Act was unnecessary.

Fourthly, and even if Nea Agrex were not authority binding on me, I do not think that the 1980 Act requires an express request. Even if the statute were to apply directly, and I have stated above that Nea Agrex appears to me to be authority for the proposition that it applies only by way of analogy, I do not find in it a requirement of express language. It is a matter of general principle that what can be done expressly can be done by implication. Thus it is not the wording of the statute itself, but only the interpretation of it which calls for express language. I do not see why that interpretation should take precedence over cogent points of policy pushing in a different direction which accords with general principle.

Fifthly, I think that Shaw LJ was right in Nea Agrex to say that the deeming provision of the 1939 Act showed that section 27(3) -

"does not exclude other direct means of establishing the commencement of an arbitration" (at 954E).

This point, as to which Goff LJ opined to the contrary and Lord Denning was silent, did not have to be decided in Nea Agrex since there was nothing there on which the commencement of arbitration could be founded except the disputed letter. The same position applied in Vosnoc, where there is no reference to the point and it may not even have been argued. In the present case, however, it was clear by at latest the receipt of HFW's letter dated 12 November 1993 that Ocean Laser had appointed Mr Kazantzis as their arbitrator, notified Willie's solicitors of that appointment, served points of claim purportedly in pursuance of that reference, and explained to Willie's solicitors that their reference derived from their status as party to the MOA: and all against the background of an ongoing arbitration raising an identical or substantially identical claim in the name of Roussos. This led Mr Berry to submit on behalf of Ocean Laser that an arbitration had been commenced by Ocean Laser against Willie in any event.

I shall consider the facts relevant to that submission below. For the moment, I express the view that even a direct application of the 1980 Act, and a fortiori an application by way of analogy, does not exclude the possibility of showing that arbitration has been commenced by means other than a notice requiring appointment or agreement of an arbitrator. I asked Mr Nolan when an arbitration which no one would dispute was under way had been commenced in the absence of such a notice. His answer was to say that arbitration had commenced at latest when the respondent appointed or agreed in the appointment of an arbitrator: but not because of the Limitation Act, but because the respondent was then estopped from denying that he had submitted the relevant dispute to arbitration or from disputing the tribunal's jurisdiction on the ground of the absence of a Limitation Act notice. For my part, I would prefer a more direct approach and say that a claimant had commenced arbitration, at any rate in a two or three arbitrator situation, by appointing his own arbitrator. On the authority of Tradax Export SA v. Volkswagenwerk AG [1970] 1 QB 537 such appointment requires the consent of the arbitrator to act as such and in addition notification of his appointment to the respondent. In my view such notification can be regarded as an implied request to the respondent to appoint his own arbitrator, just as Lord Denning had said that "I require the difference between us to be submitted to arbitration" should be regarded as such a request: indeed the hypothesis under consideration appears as an a fortiori case. But whether that be so or not, where the claimant has actually completed the appointment of his own arbitrator by notifying the respondent party, I do not see why such an appointment should not be regarded as in every sense a commencement of arbitration.

Under the 1939 Act the language was "shall be deemed to be commenced" and under the 1980 Act this phrase had become "shall be treated as being commenced". I have suggested above that the alteration appears to be an attempt to get away from a word which had led to a difference of views in Nea Agrex, but that it is difficult to say what the effect of the change was intended to be. I am inclined to think that this language still allows an arbitration to be commenced in other ways. The implication is that the arbitration shall be treated as being commenced, even if it had not in fact been commenced. In ordinary language one would not or at least might not regard the mere request to another party to appoint his arbitrator as marking the commencement of an arbitration. Hence the need for statutory language making it so. But I do not see why the appointment of a claimant's arbitrator has to be "treated" as the commencement of an arbitration, when it is, in my judgment, simply that. It seems to me, however, that I do not have to decide the point. But if the view I have just expressed is wrong, then it would to my mind amply demonstrate why it is necessary to permit what Lord Denning and Goff LJ called an implied request: a rule for the commencement of arbitration which could not encompass the notification to a respondent that a claimant had appointed his own arbitrator would seem to me to be lacking in realism.

I therefore turn to the particular facts before me, and ask first, whether the documents relied on amounted to an implied request to appoint an arbitrator, or amounted in substance to such a request. In this connection both parties were content to accept the relevance of what was said in Mannai Investment Co Ltd v. Eagle Star Life Assurance Co Ltd [1997] 2 WLR 945. There a majority in the House of Lords held that a tenant's notice to determine a tenancy was effective even though it had mistakenly referred to 12 January instead of 13 January. Lord Steyn said at 961G/962F:

"(2) The question is not how the landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene...

"(3) It is important not to lose sight of the purpose of a notice under the break clause. It serves one purpose only: to inform the landlord that the tenant has decided to determine the lease in accordance with the right reserved. That purpose must be relevant to the construction and validity of the notice. Prima facie one would expect that if a notice unambiguously conveys a decision to determine a court may nowadays ignore immaterial errors which would not have misled a reasonable recipient...

"(4) There is no justification for placing notices under a break clause in a unique category. Making due allowance for contextual differences, such notices belong to the general class of unilateral notices served under contractual rights reserved, e.g. notices to quit, notices to determine licences and notices to complete: Delta Vale Properties Ltd. v. Mills [1990] 1 W.L.R. 445, 454B-G. To those examples may be added notices under charter parties, contracts of affreightment, and so forth. Even if such notices under contractual rights reserved contain errors they may be valid if they are "sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate:" the Delta case, at p.454E-G, per Slade L.J. and adopted by Stocker L.J. and Bingham L.J...."

That of course was said in the context of a notice which was expressly a notice to determine a tenancy, but which specified the wrong date. In that respect, there is a direct analogy with the problem in Nea Agrex, viz the failure to refer to agreeing a single arbitrator. Nevertheless, the parties accepted the relevance and applicability of the test of whether Ocean Laser's communications were in their context sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt that they were intended to operate as a call for the appointment of an arbitrator.

I come first to HFW's telex of 20 May 1992. That began by express reference to Mr Kazantzis's appointment on behalf of Roussos and thus by inference to the Roussos/Willie arbitration in which Willie had already appointed Mr Newcomb as their arbitrator. The telex was also expressly copied to Mr Newcomb. In that context the telex asked Mr Kazantzis also to accept appointment as arbitrator in respect of disputes under the MOA on behalf of Ocean Laser. It was copied to SAC. For present purposes I ignore the additional issue as to whether a communication to SAC is good enough to stand for a communication to Willie, and I assume that it is. In my judgment there can be no reasonable doubt that Willie were intended to regard this communication as a notice to respond by similarly appointing Mr Newcomb as their arbitrator in respect of Ocean Laser's claims under the MOA as well as in respect of Roussos's claims, and I have no doubt that that was how Willie in fact understood it, and rightly so. I do not suppose that the parties stopped to analyse the question of whether this was the commencement of a new arbitration, or whether it was an extension of the existing arbitration. At any rate, until I raised that question in court, the issue had been looked upon and argued in terms of whether or not a new arbitration had been commenced. In those terms, it was in theory possible, but I would have regarded it as eccentric to the point of unreasonableness, for Willie to have appointed a different arbitrator than Mr Newcomb. Similarly, it was in theory possible that Willie would have wanted to agree a reference to a single arbitrator in the terms of clause 15: but in the light of their refusal to do so in the case of the Roussos arbitration, that would have been eccentric too, and wholly beyond the expectations, I am sure, of either party. The fact, therefore, that, by impliedly or in substance calling upon Willie to appoint Mr Newcomb in respect of Ocean Laser's claims as well, Ocean Laser may have been applying the wrong formula in their invocation of arbitration, does not seem to me to matter at all: see Nea Agrex and Mannai, as well as The Petr Schmidt [1995] 1 Lloyd's Rep 202 at 207 per Potter J.

Although, as Lord Steyn said in Mannai, the test is an objective one, I think it is legitimate to check my conclusions on the construction of the telex by observing how SAC in fact reacted to it. Their reaction is to be found in their letter to Mr Kazantzis, copied to Mr Newcomb and HFW, dated 21 May 1992. In that letter SAC took the point that

"Our clients have no contract and consequently there is no agreement to arbitrate with Ocean Laser..."

In other words, SAC in fact (and in my view correctly) read HFW's telex as a call to arbitrate with Ocean Laser: they declined to do so on the mistaken ground that there was no agreement and therefore no obligation to do so.

That was how the Mr Kazantzis and Mr Newcomb and Mr Lugg themselves viewed the matter. Their reasons for upholding their jurisdiction in the matter of Ocean Laser's claims do not of course bind me and have not affected my conclusion: but I find in those reasons further support for my conclusion. In the reasons appended to their Interim Final Award dated 14 July 1998 they said:

"It was a notification to the Sellers, through their solicitors, of the appointment of Mr Kazantzis as arbitrator on behalf of Ocean Laser. As such, it was by implication a notice requiring them to appoint an arbitrator for themselves."

I now come to HFW's letter of 12 November 1993. By that time points of claim had recently been served on behalf of both Roussos and Ocean Laser, and SAC had written to Mr Kazantzis, Mr Newcomb and HFW to repeat the denial of any obligation to arbitrate with Ocean Laser. That led directly to HFW's response to the arbitrators, copied to SAC, in which they explained that Ocean Laser was the buyer "to be nominated" under the MOA. The letter began by saying that it was dealing with SAC's letter "to you" (ie the arbitrators) "relating to the question of the jurisdiction to deal with any claim by Ocean Laser". The letter ended by saying that if SAC (or "the Tribunal") needed further clarification, they would no doubt let HFW know. Thus the letter is written on the assumption that Mr Newcomb as well as Mr Kazantzis had already been clothed with jurisdiction in respect of Ocean Laser's claims and had become "the Tribunal". It is not clear whence they derived that assumption in the face of SAC's letter of 8 November. It may be (and this is a matter that I will be considering below) that they thought that the tribunal's jurisdiction in the Roussos/Willie arbitration would have been enlarged by the unilateral submission to them by Ocean Laser of Ocean Laser's claim arising out of the same contract. Or it may be that they were taking for granted that, unless they heard to the contrary, Willie would indeed recognise Mr Newcomb's jurisdiction in respect of the Ocean Laser claim. If that was so, they were of course disabused of that assumption upon service of Willie's points of defence of 29 November 1993, which asserted that the tribunal had no jurisdiction over Ocean Laser's claim. However, it was one thing to assert, as Willie there did, that the present tribunal had been appointed and had jurisdiction only in respect of disputes between Roussos and Willie. It is another to submit, as Mr Nolan does, that Willie did not know, or rather that it was reasonable for them not to have understood, that they were being requested, if they had not already done so, to appoint Mr Newcomb as their arbitrator in respect of the Ocean Laser claim as well.

The latter submission seems to me to throw up in an intriguing way the question of how far the approach which I find the Court of Appeal to have taken in Nea Agrex can be stretched. If the question is whether it had been made reasonably clear to Willie that Ocean Laser had invoked against them a submission to arbitration in respect of their claim under the MOA and its arbitration clause, and that Willie were expected to respond to that invocation by themselves submitting that claim there and then - if they had not already done so - to the arbitral process, I find it impossible to say that that question should not be answered with a plain "Yes". If, therefore, for any reason an arbitration had not already been commenced by Ocean Laser (I have held that it had), it would have been commenced by this letter of 12 November. Indeed, although separate reliance was not placed on the buyers' points of claim themselves (other than as part of the overall context), if I had been asked to do so, I would have regarded that pleading as itself initiating an arbitration. If, as Lord Denning thought, a notice which says "I require the difference between us to be submitted to arbitration" is sufficient, then I cannot see why Ocean Laser's points of claim are not sufficient, - and a fortiori HFW's letter in further explanation of why, in effect, Ocean Laser were entitled - and it would follow Willie were bound - to arbitrate.

If, however, the question is whether there had been a notice requesting Willie to appoint their arbitrator in response to that letter, I am inclined to say that there was not. This is because the letter seems primarily to have been written on the assumption that Mr Newcomb is already part of the tribunal not only for the purposes of Roussos's claim but also for the purposes of Ocean Laser's. On that assumption, it is hard to say that the letter should or could be read, either implicitly or in substance, as a notice to appoint. It is possible, I suppose, that the letter should also be read as a notice to confirm or acquiesce in Mr Newcomb's appointment, if there had been any doubt as his status vis a vis Ocean Laser up to that time. In the overall context of things, that is an attractive way of looking at the matter. But it is also possible that Ocean Laser were prepared to rest on their submission that Mr Kazantzis and Mr Newcomb already had jurisdiction: and that in fact appears to have been how the matter was treated, at any rate up to recent times. Where therefore there is that degree of uncertainty as to the way of reading the letter, I do not think that it should be regarded as a notice to appoint, if that is what is needed. The matter can perhaps be tested by considering whether that letter would stand muster as a "notice...to make the appointment" under lines 143/4 of clause 15 of the MOA. That is the notice which would permit the notifying party to ask the LMAA to appoint on the other party's behalf, if the latter has defaulted for two weeks in making the appointment requested. I find it hard to say that the letter of 12 November 1993 could be relied on for that purpose. A letter whose at any rate primary purpose is to suggest that the tribunal (Mr Newcomb as well as Mr Kazantzis) has already been properly constituted with jurisdiction over Ocean Laser's claim does not look like a proper candidate for a notice to make appointment within two weeks or else lose the right to do so. I will revert to the question of this contractual notice below.

It seems to me that the reasoning of Nea Agrex is in favour of the broad and more flexible approach which would permit me to treat the letter of 12 November 1993 as the commencement of arbitration. If a notice to appoint an arbitrator is a valid notice when the notice should have been to agree an arbitrator, and if a notice to settle or appoint is a notice to appoint, I do not see why HFW's letter, which can and in my judgment should at the very least be regarded as a notice to confirm or acquiesce in the constitution of the tribunal, albeit written in the mistaken assumption that the tribunal had already been appointed, and in any event on that basis as a notice to take part in an arbitration invoked by Ocean Laser, cannot be regarded as a notice to Willie for them to act in connection with the constitution of an arbitral tribunal and as sufficing to commence arbitration.

Finally, on this issue, Mr Nolan submits that HFW's telex and letter cannot amount to the necessary request because they were sent to SAC, who although instructed in the Roussos arbitration, were not instructed in respect of Ocean Laser's claim. Whether as a separate point or not, Mr Nolan also emphasised that the two documents were not addressed to Willie, or even to SAC, but only copied to the latter.

It may be, and I am prepared to assume, that SAC's instructions went no further than to defend the Roussos arbitration. I put that only as an assumption because it seems to me that SAC did have authority to respond at any rate to the points of claim and to HFW's letter of 12 November 1993: thus SAC's letter of 8 November 1993, to which HFW's letter of 12 November is itself a response, refers to "our clients' straightforward position". However even on that assumption, the question in my judgment is not whether SAC were agents to receive HFW's communications, but whether those communications were both intended for Willie and in fact brought to Willie's attention. I have no doubt that those conditions were fulfilled in respect of both telex and letter. It may be that if SAC had replied to the effect that they had no instructions in the matter of the Ocean Laser claim and were not passing the documents to their clients, then HFW would have been wise to write directly to Willie. As it is, however, I regard this point as being without substance. Similarly, I do not think it matters that the documents were merely copied to SAC.

In this connection it is perhaps worth observing, although Mr Nolan's submission was not put on this basis, that section 27(4) of the 1934 Act, section 34(4) of the 1980 Act, and section 29(3) of the 1950 Act - but not section 14 of the 1996 Act! - all contain precise provisions as to how a notice requiring appointment "may be served". Such provisions, however, either precede, or in any event pay no regard to, modern means of communication such as telex or fax; and when dealing with post require a registered letter to a "place of abode" in England and Wales. Similarly, they do not contemplate the sending of a notice through a broking chain, as so often occurs in practice (see The Rimon), or on solicitors (see The Sargasso [1994] 1 Lloyd's Rep 162). In Nea Agrex at 954G Shaw LJ referred to these provisions for service as applying by analogy (but of course, on his view, as not being the sole means of commencing arbitration, because of the deeming provision). In Nea Agrex itself the notice relied on was not served on the owners but sent to "the owners' agents" (at 945C). There appears to have been no reliance on such service provisions in prior cases, and there was none before me. I mention the point in order to emphasise the difficulty of applying the provisions of the Limitation Acts, by analogy or not, too strictly.

In sum, therefore, in my judgment an arbitration had been commenced by Ocean Laser against Willie by means of HFW's telex of 20 May 1992, on the basis that that was implicitly or in substance a request to Willie to appoint an arbitrator, and, if not by that telex, by means of HFW's letter of 12 November 1993, on the slightly different ground that the letter was in substance a request to submit Ocean Laser's claim to arbitration, even though not a request to appoint. In addition, it is my view, but I do not have to decide, that, because the 1980 Act does not lay down the exclusive means of commencing an arbitration, by at any rate 12 November 1993 Ocean Laser had commenced an arbitration against Willie even if the letter of that date did not constitute a notice in the terms of section 34(3). I say "by at any rate 12 November 1993", because at the time of the 20 May 1992 telex, Mr Kazantzis had not yet consented to his appointment: cf Tradax v. Volkswagenwerk at 545H.

It follows that I do not believe that there is likely to be substantial, if any, difference in effect between the English rule laid down in the Limitation Acts and Nea Agrex and on the other hand the UNCITRAL rule to be found in article 21 of the Model Law. It also follows that I respectfully differ from the scepticism of the learned editors of MUSTILL & BOYD as to the limits of the Court's indulgence. It seems to me that the problem in Surrendra Overseas was of quite a different order: there the letter referred to the future. Once, however, an implied request is permitted, then I do not see why a notice of appointment of a claimant's arbitrator, plainly an invocation of arbitration and a call for the dispute in question to be submitted to arbitration, cannot amount to a sufficient notice. In the present case, at any rate, against the background of the Roussos arbitration, I am satisfied that it is.

I have mentioned in passing that the English rule is now to be found in section 14 of the Arbitration Act 1996. That section does not apply to the present dispute and therefore I have heard no submissions on it. I note that the rule in section 14 is in slightly different terms from those of the Limitation Acts. Thus there is no reference to deeming or treating. I would be loathe to think that the position under the 1996 Act will be different - but that must await another day.

Although the matter did not strictly arise on Willie's summons, the parties were interested to know whether the HFW letter of 12 November 1993 was such a notice under clause 15 of the MOA as would entitle Ocean Laser to ask the LMAA to appoint not only the third arbitrator, but also the respondent's arbitrator. I have already adverted to this provision above. The relevant part of the clause provided:

"If one of the parties fails to appoint an Arbitrator...for two weeks after the other party having appointed his Arbitrator has sent the party making default notice...to make the appointment"

then the LMAA could appoint. Thus to entitle a party (the "applicant party") to apply to the LMAA for appointment of an arbitrator on behalf of the other party (the "defaulting party") the following conditions had to be met:

(i) the applicant party had to have already appointed its arbitrator;

(ii) the applicant party had to have sent the defaulting party a notice to make its appointment;

(iii) the defaulting party had to have been in default of making its appointment for two weeks thereafter.

It was common ground that the telex of 20 May 1992 could not operate as the requisite notice to appoint, since as of 20 May 1992 Mr Kazantzis had not yet consented to act as arbitrator for Ocean Laser and therefore condition (i) was not fulfilled.

What of the letter of 12 November 1993? By that time Mr Kazantzis had of course consented to act as Ocean Laser's arbitrator. It follows from what I have said above that in my view HFW's letter should be regarded as a call to submit Ocean Laser's claim to arbitration, indeed to arbitration before a tribunal composed of Mr Kazantzis and Mr Newcomb. However, the letter is written primarily on the assumption that Mr Newcomb had already become a member of the tribunal for Ocean Laser's claim, but possibly means also that, if perchance he had not been, the explanation about Ocean Laser would lead to Willie's confirmation of his appointment or their acquiescence in the tribunal's jurisdiction. In such circumstances, as I have already indicated, I find it hard to say that there has been a "notice...to make the appointment" in the terms of the clause. The clause assumes that an arbitration will already have been commenced at the time when the parties had tried to agree on a single arbitrator. The notice to make an appointment has therefore a different purpose from that of commencing arbitration: it is to put the non-appointing party on notice that he will be in default, and liable to lose the chance to appoint an arbitrator of his own choice, unless he appoints within two weeks. In this context, I think that the question of whether the letter of 12 November 1993 was a contractual notice within the meaning of the clause is a different question from the question whether the letter was sufficient to commence an arbitration, if one had not already been commenced. Nevertheless, it is attractive, when regard is had to the similarity of language in the 1980 Act and the clause, to say that the answer should be the same in both cases. If, therefore, it had been my view that an arbitration could only be commenced by a notice which expressly or impliedly was a notice to make the appointment of an arbitrator, I would have been reluctant to come to a different view under the rule for the commencement of arbitration on the one hand and under clause 15 on the other. As it is, however, I have already given my reasons for thinking that the rule relating to the commencement of arbitration is a broader and more flexible rule than the direct application of the language of the Limitation Act, taken by itself, would have allowed even if the significance of the phrase "shall be treated as being commenced" had been ignored.

Had Ocean Laser done enough to enable it to be joined as a further party to the existing arbitration between Roussos and Willie?

This issue only arose in the course of argument. Until I raised the question of whether Ocean Laser could join in the existing arbitration between Roussos and Willie, the parties had been content to view the Ocean Laser claim as arising in a wholly separate arbitration. Mr Berry did, however, formulate an alternative submission that Ocean Laser could join the existing arbitration by a procedure which fell short of the commencement of a new arbitration and the consensual consolidation of the two. In the light of my decision on the first issue, this second issue does not have to be decided, but seeing that it has been argued I shall give my views on it.

Mr Berry's submission was that for a new party to join an existing arbitration did not require the same formalities as the initiation of a fresh arbitration, but merely notice to the existing tribunal that the new party wished to intervene and submit itself to their jurisdiction. An unspoken premise of this submission was, as it seemed to me, that the new party was entitled in its own right (as in the present case) or as standing in the shoes of an existing or previous party to the arbitration to invoke the same arbitration agreement as that which had led to the pending arbitration. For the purpose of his submission Mr Berry relied on two authorities, The Jordan Nicolov [1990] 2 Lloyd's Rep 11 and Baytur SA v. Finagro Holding SA [1992] 1 Lloyd's Rep 134, in both of which the new party claiming to enter upon an existing arbitration was an assignee of the claimant in that arbitration.

In The Jordan Nicolov the assignee was a legal assignee, the claimant's underwriter, who had given notice of the assignment to the other party and to the arbitrators. The arbitration had been commenced prior to the assignment. It was only much later, however, and at an advanced stage of the arbitration, that the assignee sought to intervene in it. The arbitrators, however, made an award in which they held in effect that the only arbitration with which they were concerned was that between the original claimant, a charterer, and the respondent, a shipowner, and that if the underwriter wished to advance the assignor's claim, he would have to commence a fresh arbitration - in which he would be time barred. Mr Justice Hobhouse, however, held that the assignor was entitled to take advantage of the arbitral appointment already made by the assignor. He held that the notices to the respondent and to the arbitrators were necessary but also sufficient conditions to enable the assignee to intervene as a new party in the existing arbitration. He said (at 18):

"The service of the notice and the intervention in the arbitration provide as effective and satisfactory a method of carrying on the proceedings as that which is provided in relation to litigation by O.15, r.7(2) of the Rules of the Supreme Court."

He continued (at 19):

"As regards the subsequent costs of the arbitration, the intervention of the assignee clearly is a submission to the jurisdiction of the arbitrators and therefore, in addition to confirming the capacity of the arbitrators to make an award in favour of or against the assignee on the substantive claim, includes the acceptance that the arbitrators shall have in relation to the assignee the discretion to award costs conferred by s.18 of the Arbitration Act 1950. This is not to say that there has been some novation."

A little later he said (also at 19):

"I consider that there is no authority which precludes me from holding that the assignee is entitled to enforce the assignor's rights in the pending arbitration or which shows that the arbitrators do not have a jurisdiction and the duty, if the assignee is otherwise entitled to succeed on the merits, to make an award in favour of the assignee. In my judgment, the application of principle to this factual situation demonstrates that, absent some special factor (and none is alleged in this case), the assignee is entitled to an award from the shipowners if he, the assignee, can prove his case on the merits including his case on title to sue. His claim is not time barred. He is entitled under the Law of Property Act to exercise all the legal remedies of the assignor. The remedy by way of arbitration having been invoked by the assignor in time, the assignee can enforce that remedy. It is the same remedy not a new or different remedy."

In Baytur v. Finagro the assignee was an equitable assignee who by reason of a company reorganisation had succeeded under foreign law to the rights and obligations of a claimant in a pending arbitration at the same time as that claimant had ceased to exist. However, there had been no notice to respondent or arbitrators of these changes and no attempt by the assignee to intervene in the arbitration. In due course the arbitrators rendered an award in favour of the (by now defunct) claimant. The respondent succeeded in getting that award set aside as a nullity, since the arbitration had lapsed on the demise of the claimant company. It was argued on behalf of the assignee that it had automatically become a party to the arbitration at the moment of the assignment, so that the proceedings never lapsed: but the Court of Appeal rejected that submission. It regarded the giving of notice and intervention in the arbitration as necessary ingredients to enable a new party to join an existing arbitration (at 151). Lloyd LJ added a "note of warning" (ibid):

"It was assumed by Mr Justice Hobhouse, correctly, that the assignor would remain liable for costs already incurred in the arbitration, and that the effect of the assignment, therefore, was only to add an additional party potentially liable for those costs. Not surprisingly he held that there were no practical difficulties on the facts of that case. But in the present case, the assignor has ceased to exist. So if the plaintiff sellers had been successful, they would have had to look to the defendants alone for their costs. Nor is it clear to me what would have happened if the plaintiffs had had a counterclaim in the arbitration...There would be scope for great injustice if an insolvent assignor could assign away the benefit of a claim in arbitration to an associated company, while remaining solely liable for the burden of the respondent's counterclaim. This had led me to question whether mere submission is enough. Because of the nature of arbitration, as a consensual method of settling disputes, it may that the consent of the arbitrator, and the other party to the arbitration, is required. If this is the correct analysis, then the only exception might be where the foreign law creates a universal successor, as in National Bank of Greece v. Metliss, [1958] A.C. 509. But that argument was not fully developed before us, and must therefore await another occasion."

To be compared and contrasted with those two cases is The Felicie [1990] 2 Lloyd's Rep 21 where Mr Justice Phillips had not only held that even a statutory assignee under the Third Parties (Rights Against Insurers) Act 1930 had not automatically become substituted in a pending arbitration at the time of the assignment and in the absence of notice ("some procedural mechanism is required to substitute one party for another", at 26), but had also gone on in his reasoning to emphasise practical difficulties in the way of such substitution (at 26/27). It is not clear to me to what extent such reasoning may be said to have survived the decision in The Jordan Nicolov and the latter's apparent approval in Baytur v. Finagro, or to depend on the particular nature of the operation of the 1930 Act.

The present case is not one of assignment, but of novation (see Damon Compania Naviera SA v. Hapag-Lloyd International SA (The Blankenstein) [1985] 1 WLR 435. Therefore there is no question of substituting one party for another in the arbitration, Ocean Laser for Roussos, but of adding an additional party. In the circumstances, I see no difficulties in terms of costs, for each party could be made liable in costs as seemed appropriate to the arbitrators in their discretion. Nor is there any problem, as can exist in the case of assignment, of some stranger to the underlying contract intruding on a unilateral basis into the contracting parties' arbitration, for Ocean Laser is a contracting party. For the same reason, there is no problem in the event of any counterclaims against either claimant: whereas an assignee usually is not subject to any burden. It is true that the claim of Roussos may be different from that of Ocean Laser (even though Roussos also claimed to be entitled to assert Ocean Laser's claim on their behalf), and that by reason of the novation it is possible that Roussos's claim would be bound to fail even where Ocean Laser's claim might be entitled to succeed. Thus Ocean Laser's remedy may well not be the same as Roussos's remedy. That is, on Mr Justice Hobhouse's reasoning, a real difference from the case of assignment. But in the case of a legal assignment, the effect of it is to destroy the assignor's right or remedy by virtue of recreating it in the hands of the assignee. That seems to me to be not unlike the sort of novation which takes place in a Blankenstein situation.

I would be loathe to think that where a claim by party A to a contract with party B has been submitted to arbitration under that contract's arbitration clause, another claim based on identical facts brought by a third party to the same contract, party C, could not (without the agreement of B) be referred to the same arbitration but would have to be referred under an entirely new arbitral submission. No authority has been cited to me which compels me to determine that that would have to be done. I know of course that arbitration is a consensual process: but where the relevant parties are bound to arbitrate, I do not see why the respondent's refusal to recognise party C's submission of his claim to the same arbitrators can force parties A and C to arbitrate in separate arbitrations. It would mean that where an arbitration had been commenced in error by one only of two or more joint contractors, then the absent party could not (without the respondent's agreement, which there would be no incentive to give) join the same arbitration, even though his absence might be crucial to the success of a joint contractors' claim. It would mean that where it was uncertain which of two contracting parties held a claim, they could not (without the respondent's agreement) claim as alternative claimants in the same arbitration once an arbitration had been commenced by one only of them. The vice of that (apart from waste of time and resources) is the danger of inconsistent decisions in separate arbitrations, for at the respondent's option a different tribunal could be enforced in the second arbitration. I can see that the position is different where the claimants cannot agree between themselves on a single arbitrator or single arbitration; and I recognise that each arbitration agreement can spawn several arbitrations (see MUSTILL & BOYD at 505/6). Such considerations do not, however, to my mind necessitate separate arbitrations in a case like the present.

In Baytur v. Finagro at 151 Lloyd LJ raised the question, in the context of an assignment, whether in the absence of his consent, a respondent could be forced to accept an assignee's intervention, where the assignor had divested his assets so as to render the respondent's counterclaim nugatory. That, it seems to me, is a problem not confined to arbitration. In any event, it does not arise in a case like the present. It does seem to me, however, that the intervening party must at least obtain the consent of the existing claimant's arbitrator to act in respect of his own claim as well. As for late interventions, it seems to me that arbitrators are perfectly able to recognise "new claims" which properly fall foul of limitation considerations.

If my decision in this case had had to depend on this issue, I would have been prepared therefore to hold that Ocean Laser had properly joined the Roussos/Willie arbitration by obtaining Mr Kazantzis's consent to act as their arbitrator and by giving notice to Willie and the arbitrators of their claim and of their submission to the tribunal already in place in the pending arbitration. As it is, however, I have already decided that Ocean Laser had commenced arbitration against Willie in 1992, and Mr Nolan was able to inform me, upon instructions, that if I so decided Willie would confirm Mr Newcomb as their arbitrator. The danger of a separate tribunal and separate hearings, which at one time had been threatened, has therefore evaporated. In the circumstances, and because this second issue was argued by counsel at what was in effect short notice, I think it would be better to say that the matters expressed in this part of my judgment reflect my opinion rather than my decision.

Were the arbitrators entitled to change their minds about the amendment of the buyers' pleadings?

It was common ground that this was for present purposes a question of jurisdiction. If the arbitrators had jurisdiction to revisit their decision allowing the amendment, then any allegation of misconduct or procedural mishap would have to await the outcome of the arbitration, for there is no general power in the courts to supervise the conduct of an arbitration prior to award: see Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corporation [1981] AC 909. As Mr Justice Steyn put it trenchantly in K/S A/S Bill Biakh v. Hyundai Corporation [1988] 1 Lloyd's Rep 187 at 189:

"In an extreme case it is conceivable that an arbitrator's failure to observe the principles of natural justice in the making of interlocutory rulings may lead either to the revocation of the mandate of the arbitrators under s.23(2), but it follows from the decision in Bremer Vulcan Schiffbrau und Machinenfabrik v. South India Shipping Corpn. Ltd. [1981] 1 Lloyd's Rep. 253; [1981] A.C. 909 that the Court has no inherent jurisdiction to correct procedural errors, even if they can be categorised as misconduct, during the course of the reference, and that the statutory scheme of the Arbitration Acts does not authorize such corrective measures. The remedies are therefore revocation of the authority of the arbitrator in the exceptional cases where that might be appropriate, or resisting enforcement of the award.

"This is not a lacuna in our law. In the interests of expedition and finality of arbitration proceedings, it is of the first importance that judicial intrusion in the arbitral process should be kept to a minimum. A judicial power to correct during the course of the reference procedural rulings of an arbitrator which are within his jurisdiction is unknown in advanced arbitration systems, as is clear from the valuable Year Books published by the International Council of Commercial Arbitration, and the creation of such a power by judicial precedent in this case would constitute a most serious reproach to the ability of our system of arbitration to serve the needs of users of the arbitral process."

It therefore fell to Mr Berry to submit that the arbitrators lacked jurisdiction to change their minds so as to refuse leave to plead paragraph 4A of the amended points of claim. He sought to make good that submission in the following ways. First, he said that the decision to allow the amendment created an issue estoppel, with the effect that the arbitrators were pro tanto discharged from their office, were to that extent functi officio. For this purpose he relied on Fidelitas Shipping Company Ltd v. V/O Exportchleb [1966] 1 QB 630. Secondly, he said that the decision, recorded in Mr Kazantzis's letter of 21 May 1998, was itself an "award", that there was no reason why there could not be an award on interlocutory matters or matters of procedure, and that whether or not the decision created an issue estoppel, the issue of an award rendered a tribunal functus officio as to the matters determined in that award. In this connection he relied primarily on Cargill Srl Milan v. P Kadinopoulos SA [1992] 1 Lloyd's Rep 1. Thirdly, he invoked the analogy of litigation and pointed out that whereas there might be jurisdiction in a court to change its mind up to the time when its order is perfected, once that has happened, the court lacked jurisdiction to alter its order and the matter could only be revisited if at all on appeal: see the notes to the Supreme Court Practice, Vol 1, 1999, at 20/11/1 and 20/11/7-9 passim. Fourthly, he appealed to considerations of policy, submitting that a rule that would permit arbitrators to change their minds in the course of a reference would encourage parties to revisit a point time and time again, with serious consequences in terms of loss of time and waste of costs and the danger of injustice.

Mr Nolan on the other hand submitted that arbitrators were masters of their own procedure; that the doctrine of issue estoppel or of functus officio did not apply to matters of procedure but only to a final decision on the merits (see The Sennar (No 2) [1985] 1 WLR 490 at 499); that the analogy of litigation did not apply in arbitration in the absence of any possibility of appeal on interlocutory matters, and that in any event matters of procedure could be reopened in litigation without appeal; and that as to matters of policy, arbitrators could look after themselves to ensure that they were not constantly badgered to change their minds.

I shall consider these submissions in turn, beginning with Mr Berry's reliance on the doctrine of issue estoppel. His foundation here was the Fidelitas case and in particular the judgment of Diplock LJ at 641/4, where he said:

"Arbitration, like litigation, is concerned only with the legal rights and duties of the parties thereto. It is concerned with facts only in so far as they give rise to legal consequences. The final resolution of disputes between parties as to their respective legal rights or duties may involve the determination of a number of different "issues", that is to say, a number of decisions as to the legal consequences of particular facts, each of which decisions constitutes a necessary step in determining what are the legal rights and duties of the parties resulting from the totality of the facts...

"Issue estoppel applies to arbitration as it does to litigation. The parties having chosen the tribunal to determine the disputes between them as to their legal rights and duties are bound by the determination by that tribunal of any issue which is relevant to the decision of any dispute referred to that tribunal. An arbitrator to-day has power to make an interim award determining particular issues separately from other issues in the arbitration. It is, I understand, conceded by Mr. Goff, on behalf of the owners, that if the arbitrator does so, his interim award creates an issue estoppel as respects the issue determined by the interim award...

"Once his final award is made, whether or not stated in the form of a special case, the arbitrator himself becomes functus officio as respects all the issues between the parties unless his jurisdiction is revived by the Court's exercise of its power to remit the award to him for his reconsideration. But this is merely the way in which the principle nemo debet bis vexari pro una et eadem causa affects the arbitrator's functions. He has decided the questions of fact as to which he is the exclusive tribunal;; he has determined their legal consequences subject only to correction by the High Court on the stated questions of law. The parties cannot re-open the same matters again before him. Where his award is an interim award stated in the form of a special case, it determines the particular issue or issues to which it relates in alternative ways dependent upon the answer of the High Court to the question of law stated in the special case. It creates an issue estoppel or issue estoppels between the parties and the arbitrator is functus officio as respects the issues to which his interim award relates."

In my judgment, however, there is nothing in these passages to suggest that the doctrine of issue estoppel can apply to mere questions of procedure, as distinct from issues on the final merits. On the contrary, the whole context in which these remarks occurred was concerned with plainly substantive matters such as issues of cesser of liability and waiver. That Diplock LJ was speaking with that context in mind is in my view well exemplified by the opening sentences of the passage cited above, where Diplock LJ speaks of "The final resolution of a dispute", or in the closing passage cited above where he refers to an arbitrator's "final award" or to an "interim award" which is determinative of certain issues. Thus Lord Denning MR (with whose judgment Dankwerts LJ agreed) put the matter in this way (at 640B/C):

"...if one party brings an action against another for a particular cause and judgment is given upon it, there is a strict rule of law that he cannot bring another action against the same party for the same cause...But within one cause of action there may be several issues raised which are necessary for the determination of the whole case..."

The Sennar (No 2) in my view demonstrates the same philosophy in a case where admittedly the distinction between a final determination of an issue on the merits and a merely procedural decision was less easy to determine. This was because that case was concerned with the interlocutory question of whether an English admiralty action should be stayed on the basis that the parties had agreed in their bill of lading contract to submit themselves to the exclusive jurisdiction of the courts in Sudan under Sudanese law. There had been a previous attempt at arrest of the defendant shipowners' vessel in Holland, but the Dutch courts had already declined jurisdiction on the grounds of the applicability of the bill of lading jurisdiction clause. The House of Lords held that that decision of the Dutch courts raised an issue estoppel in the English action, preventing the plaintiffs from revisiting the question of whether the jurisdiction clause applied to their claim (the Admiralty judge at first instance had held that it did not) and effectively determining the need for a stay. Lord Brandon of Oakbrook said (at 499E/G):

"The argument in relation to the first contention was that the judgment of the Dutch Court of Appeal was procedural in nature, in that it consisted only of a decision that a Dutch court had no jurisdiction to entertain and adjudicate upon the appellants' claim, and did not pronounce in any way on the question whether the claim itself, or any substantive issue in it, if it were to be entertained and adjudicated on, would succeed or fail. In my opinion, this argument is based on a misconception with regard to the meaning of the expression "on the merits" as used in the context of the doctrine of issue estoppel. Looking at the matter negatively a decision on procedure alone is not a decision on the merits. Looking at the matter positively a decision on the merits is a decision which establishes certain facts as proved or not in dispute; states what are the relevant principles of law applicable to such facts; and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned. If the expression "on the merits" is interpreted in this way, as I am clearly of the opinion that it should be, there can be no doubt whatever that the decision of the Dutch Court of Appeal in the present was a decision on the merits for the purposes of the application of the doctrine of issue estoppel. In my view, therefore, the argument for the appellants on this point is misconceived and should be rejected."

Mr Nolan emphasised the dictum embraced in that paragraph that "a decision on procedure alone is not a decision on the merits". In the same vein, in relation to the matter of discretion, he relied on the judgment of Wills J (with which Kennedy J agreed) in Smith v. Shann [1898] 2 QB 347 which concerned the discretion of justices to grant or refuse a licence to sell beer. An objection, having failed one year and being renewed on the same facts the following year, was on the latter occasion upheld. It was suggested to the Divisional Court that there was an estoppel, but Wills J said (at 350):

"What was done by the justices when the transfer was applied for was in no sense a decision, or a judgment of the Court, upon which an estoppel could be founded; to hold otherwise would involve an enormous extension of the doctrine of estoppel. The statute...does not say that they are to refuse the application, if one of the grounds of objection is made out; to have said so would have been to take away their discretion altogether."

In my judgment, the decision to allow the buyers' amendment was not a decision on the merits, but was a matter of pure procedure, involving no more than issues of discretion. In such circumstances, I cannot see how there can be any question of an issue estoppel. It follows that Mr Berry's submission that the tribunal was functus officio on the ground of there being an issue estoppel must fail. There was no submission before me that the decision involved the determination of any questions of limitation, and therefore I am not to be taken to be deciding that the determination of such questions could not lead to an issue estoppel. I have heard no argument on that.

Mr Berry's next submission was that the arbitrators' decision was an award, and that they were functi officio on that ground to the extent of that award. There is no statutory or common law definition of what constitutes an "award". The matter was considered in Cargill v. Kadinopoulos [1992] 1 Lloyd's Rep 1. The arbitration in that case was governed by a sophisticated code known as the GAFTA Arbitration Rules. Those Rules provided for a two tier arbitration procedure with a right of appeal to a Board of Appeal from any "award" of the first tier arbitrator. The Rules also contained detailed limitation provisions together with an overriding discretion in the first tier arbitrator to allow a claim to proceed despite its lateness. A first tier arbitrator found that Kadinopoulos's claim was time-barred and refused in his discretion to allow it to proceed. It followed that the claim, in the words of the Rules, was "deemed to have been withdrawn and abandoned". The arbitrator wrote up his decision in the form of an "interim award". The House of Lords had to say whether that was an award properly so-called in terms of the Rules so as to permit appeal to the Board of Appeal, which had reversed the arbitrator's decision. Lord Goff of Chieveley, with whose speech the other members of the House agreed, pointed out that the arbitrator's decision had involved both findings of fact, as to whether circumstances had arisen as to whether he was called upon to exercise his discretion, and a decision as to how he should exercise that discretion. Lord Goff then continued (at 4/5):

"Like the Judge and the Court of Appeal, I am of the opinion that this decision was properly made the subject of an award. It is enough for me to say (subject to any right of appeal) it conclusively determined that the arbitration was at an end and so finally disposed of the relevant matters which had been submitted to arbitration; such a determination is properly the subject matter of an award, carrying with it the usual consequences which flow from an award - in particular, it renders the arbitrator functus officio and prevents the unsuccessful claimant from rearbitrating or litigating the identical claim in the future (see generally Mustill and Boyd on Commercial Arbitration, 2nd ed., pp 404-405 and 409-413, and cases there cited). It is, in my opinion, unnecessary in the present case to attempt an exhaustive definition of the precise nature of an arbitration award, because I am in no doubt that in the present case the arbitrator's decision was properly made the subject matter of an award. Indeed, as Lord Justice Leggatt pointed out in the Court of Appeal, it would be unrealistic to hold otherwise.

"It was suggested by the buyers that, in the arbitration rules, the expression "award" was, as a matter of construction, to be confined to decisions on jurisdiction or on the merits of a dispute. This would in the present context impose an artificial limit upon the meaning of the word "award", which I would be unwilling to accept without good reason. As it is, there is certainly no express provision to this effect, and I cannot discover an acceptable basis for an implication displacing the ordinary understanding of what is meant by an award. In the present case the determination of the arbitrator, although it did not amount to a decision of the merits of the sellers' claim, nevertheless did finally dispose of the relevant matters in dispute because it finally determined that the sellers' claim was deemed to have been withdrawn and abandoned and so could no longer be pursued against the buyers. Such a determination is, in my opinion, properly made the subject matter of an award. In reaching this conclusion, I draw comfort from the fact that the new s.13A of the Arbitration Act, 1950 will, when brought into force, confer upon an arbitrator or umpire the power to make an award dismissing the claim for what, in the context of litigation, is called want of prosecution (see s. 102 of the Courts and Legal Services Act, 1990)." ^[3]

The question of what constitutes an award was also briefly visited, by coincidence on the very same day as Cargill v. Kadinopoulos was before the House of Lords, by Judge Diamond QC in The Trade Fortitude [1992] 1 Lloyd's Rep 169. There by an "interim final award" a majority of arbitrators had expressed their decision not to make an interim award for undisputed demurrage pending the hearing of cross-claims. Webster J had given leave to appeal to the shipowners pursuant to section 1(3)(b) of the Arbitration Act 1979. Judge Diamond expressed concern and hesitation about recognising the arbitrators' decision as an award properly so called, and thus permitting procedural decisions to be appealed to the court under the Act. He regarded it as of great importance that judicial intrusion into the arbitration process be kept to a minimum and cited the passage from Mr Justice Steyn's judgment in K/S A/S Bill Biakh v. Hyundai Corporation to which I have already referred. He continued (at 175):

"In the present case, however, the arbitrators have themselves embodied their decision in a document which they describe as an "Interim Final Award" and they have given detailed reasons with a view, presumably, to the possibility of an appeal under the 1979 Act. Had they not done so I would have declined to review the arbitrators' decision on the ground that they had not issued an award within s.14 of the 1950 Act and on the further ground that they had made a purely procedural decision in the course of a current reference. Since, however, the arbitrators themselves issued a document entitled "Interim Final Award" and since I find it impossible to say that this document, being a decision in respect of matters referred to the arbitrators for decision, is incapable by reason of its procedural nature of constituting an award within s.14 of the Act (see for a discussion of the nature of an interim award Fidelitas Shipping Company Ltd. v. V/O Exportchleb, [1965] 1 Lloyd's Rep. 223 at p.228, and The Kostas Melas, [1981] 1 Lloyd's Rep. 18, at pp.25-26) I have, albeit with considerable reluctance, been compelled to accept that the Court does have jurisdiction in the present case to review the arbitrators' decision."^[4]

Mr Berry also relied on The Vasso [1983] 2 Lloyd's Rep 346, where with the arbitrator's consent and against the background of his reasoned decision a party applied under section 2 of the Arbitration Act 1979 for the court's determination of three "preliminary point[s] of law" as to the extent of the arbitrator's powers under section 12(1) of the Arbitration Act 1950 and in particular whether he could (and should) make an order for inspection of a vessel. Mr Justice Lloyd declined to answer the question whether the order should have been made, since that was a matter of pure discretion and not one of law at all. He entertained the other two questions, however, even though he rather doubted the court's jurisdiction to accept the application under section 2 of the 1979 Act on the grounds that his decision either way could not "produce substantial savings in costs to the parties" and that the questions of law could not have arisen in connection with an appeal from a final award under section 1(3)(b) of the 1979 Act (see the conditions for hearing such an application to determine a preliminary point of law in section 2(2)(a) and (b)). He did, nevertheless, go on to consider and answer the other two questions because he was, it seems, prepared to treat the arbitrator's reasoned decision as an "interim award" in respect of which he had power to give leave to appeal on questions of law, and he regarded the surviving questions of law as interesting and important. He said (at 348):

"Although the parties, and the arbitrator, have approached this application as being made under s.2 of the 1979 Act, it may be that they should have regarded the arbitrator's order for inspection as an interim award..."

It may be noted that in the Arbitration Act 1996 (which does not govern the present arbitration) the expression "interim award" has been avoided: section 47 says that unless otherwise agreed the tribunal may make "more than one award" on different aspects of the matters to be determined; sections 20/22 refer to "decisions, orders and awards" and section 34 refers to the tribunal's power to "decide all procedural and evidential matters" and to its "directions" in that context. Under the new Act, therefore, there appears to be a desire to contrast awards (at any stage of the arbitral proceedings) with other forms of decisions, orders and directions which arbitrators may make.

It has of course to be appreciated that interlocutory, procedural or discretionary decisions may be of many different kinds. There is the sort of decision which is finally determinative of a claim (or part of a claim), such as decisions to the effect that a claim is barred, or that a claim should be struck out. There is the sort of decision which can never be a formal bar to the revisiting of a question, because it depends on changing circumstances, such as, par excellence, timing decisions regarding the conduct of a reference, or decisions not to permit amendment or discovery: in theory circumstances can change so materially as to make it proper not only to revisit the question, but for a tribunal to alter its decision. And there are decisions which may be entirely a matter of discretion, but which would prima facie appear to be final, such as a decision to allow an amendment to be made. I am doubtful that a single rule could appropriately deal with every type of such decisions. I would, however, attempt to formulate the present state of the authorities as follows:

(i) A decision which finally determines a claim, by holding it to be barred or struck out, can properly be made the subject matter of an award. If the decision disposes of everything within the reference, it could be made the subject of a final award, but if it disposes of only part of the reference, it would be made the subject of an interim award. See Cargill v. Kadinopoulos.

(ii) It may be that arbitrators always have a discretion to render a decision, whatever its nature, in the form of an interim award. That would be a matter for them. By stating their decision in the form of a reasoned award, they might be indicating, not that the subject matter was properly matter for appeal, for that would depend on the Nema principles, but at any rate that subject to those principles an application for leave to appeal could at least be made. They would also be indicating, in my view, that to the extent of their decision they regarded themselves as functi officio. Since there would be an opportunity at any rate to seek leave to appeal, the analogy with the rule in litigation that perfection of an order removes jurisdiction pro tanto from the judge and transfers it to the appellate court would seem to have some force. None of this is intended to encourage arbitrators to state procedural decisions in the form of an interim award, but it could be that a procedural or evidential decision raises a question of such principle or importance that an interim award would be appropriate.

(iii) Subject to (i) and (ii), however, I am generally sceptical that interlocutory, procedural or discretionary decisions can properly be treated as though they are the subject matter of an interim award. It does not seem to me that Cargill v Kadinopoulos goes that far. In any event, I cannot imagine that arbitrators or the courts would contemplate that interim awards on such interlocutory matters should, save in the exceptional case, be made the means by which the courts could supervise the conduct of a reference: cf Bremer Vulkan and Bill Biakh.

It follows that since Mr Kazantzis's letter is neither a decision on the merits, nor finally dispositive of any issue referred, nor expressed by the arbitrators to be an interim award, there is no basis in terms of Mr Berry's second submission to hold that the arbitrators lack jurisdiction to revisit their decision.

Mr Berry's third submission was to invoke the analogy of litigation and the rule that a perfected order cannot be changed otherwise than on appeal (or subject to the narrow confines of the "slip" rule). This is not the place for any detailed study of the operation of this doctrine in litigation. Suffice it to say that I do not see force in the submission that the analogy should be applied in arbitration. In general there is no appeal within the arbitral process itself, save in the case of certain detailed arbitral codes, such as GAFTA's, which provide for two tier arbitrations. It may be that in that context the position could be different, but that would be very much a question of the construction of the applicable rules. Nor is there in general a process of appeal out of arbitration and into the courts (subject to the right to appeal an "award" as discussed above). On the contrary the general rule is that there is no inherent supervisory jurisdiction in the courts over the conduct of a reference. That suggests that there should not be the same jurisdictional strictness in matters of procedural decision-making within the arbitral process as there is in litigation with its hierarchy of courts. Moreover, there always remains the opportunity, once the reference is over, for an aggrieved party to complain that there has been misconduct or at any rate a "procedural mishap" which has rendered the proceedings unfair.

Finally, there is the matter of policy. I can see that it would be undesirable for arbitrators to be under constant pressure to revisit or amend their decisions on the basis that they had jurisdiction to do so and that the courts could not intervene. Nevertheless, I am confident that arbitrators can look after themselves and know how to resist pressure of that sort. It will or may arise in any event in circumstances where procedural decisions must respond to changing circumstances. The problem in this case did not arise from pressure from Willie, but from the arbitrators' own further thoughts on the subject. If arbitrators are clear in their own minds that they have erred, it is no bad thing that they should have the courage to say so. If they have exceeded their jurisdiction in procedural matters, as was alleged in The Vasso, I do not doubt that the issue of law can be brought before the court in any event. For the rest, any question of misconduct can be raised after the reference is over.

For these reasons, I decline to declare that the arbitrators lacked jurisdiction to revisit and reverse their earlier decision regarding the amendment.

Note 1       I do not know how much thought went into this expression. I can see that the expression "buyers" may have been ambiguous. The intent, I suppose, was to refer to Roussos.    [Back]

Note 2       This is not strictly correct. Section 29(2) of the Arbitration Act 1950 (the "1950 Act") used to contain a special provision for the commencement of an arbitration for the purposes of section 496 of the Merchant Shipping Act 1894. Section 29(1) of the 1950 Act extended the expression "legal proceedings" under section 496 to arbitration, and section 29(2) then provided: "For the purposes of the said section four hundred and ninety-six, as amended by this section, an arbitration shall be deemed to be commenced when one party to the arbitration agreement serves on the other party or parties a notice requiring him or them to appoint or concur in appointing an arbitrator..." Under the Merchant Shipping Act 1995, however, section 29(1) of the 1950 Act was repealed and section 29(2) was amended by deleting the words at the beginning of that sub-section preceding "an arbitration". Thus section 29(2) became, at the end of the life of the 1950 Act, a general provision for the commencement of arbitration. Such a general provision (albeit in different language) now appears in section 14 of the 1996 Act. Of course, at the time in question in the present case, be it 1992 or 1993, neither section 29(2) of the 1950 Act nor the 1996 Act applied.    [Back]

Note 3       It seems to me that this passage from Lord Goff's speech in Cargill v. Kadinopoulos may support the view that I had tentatively expressed in James Lazenby & Co v. McNicholas Construction Co Ltd [1995] 1 WLR 615 at 630/1 to the effect that an award striking out a claim for want of prosecution under section 13A of the Arbitration Act 1950 would be a final determination of the claim.    [Back]

Note 4       For my part I find nothing in the discussions of interim awards in Fidelitas or The Kostas Melas (mentioned by Judge Diamond) to encourage the idea that purely procedural decisions can properly be made the subject-matter of such awards, in the absence at any rate of contrary agreement in the rules which govern the parties' arbitration.    [Back]