Effect of unenforceable award

In Five Oceans Salvage Ltd v Wenzhou Timber Group Co [2011] EWHC 3282 (Comm) the award made by the arbitrator was, for reasons beyond his control, not enforceable. The questions raised in this case were whether the arbitrator could himself make a new award and, in the alternative, whether the existing award could be set aside for serious irregularity.

Five Oceans: the facts

WTG were the owners of a cargo of logs on board Medea K. On 19 October 2009 the vessel developed a serious list while still at anchor, and the crew abandoned ship. On 31 October 2009 the owners of the vessel, Hecate Shipping Co, entered into a salvage agreement with Five Oceans on the terms of the Lloyd’s Standard Salvage Agreement (LSSA) on behalf of itself and cargo owners. The LSSA provided that Five Oceans would use its best endeavours to salve Media K and her cargo and take them to a place of safety ‘to be agreed’ and that, in the event of success, payment would be determined by arbitration in London.