FIVE OCEANS SALVAGE LTD V WENZHOU TIMBER GROUP CO

[2011] EWHC 3282 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Field, 23 November 2011

Arbitration - Award unenforceable - Whether arbitrator had jurisdiction to make another award - Whether award could be set aside for serious irregularity - Arbitration Act 1996, sections 32 and 68

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 entered into an agreement with FOS on the terms of the Lloyd's Standard Salvage Agreement on behalf of itself and cargo owners. The salvage was duly effected, and an arbitration was commenced in London to calculate the sum recoverable. The arbitrator held, in a partial award in April 2010, that the total value of the salved property was US$4,174,036, of which US$2,882,952 was the value of the cargo. FOS was awarded the sum of US$2,748,200, plus interest and other expenses, and WTG's share of that sum was US$7,277.17. A final award was published on 31 January 2011, and costs of £90,000 were awarded to FOS. FOS commenced enforcement proceedings in China, and it then became apparent that the award could not be enforced because of WTG's assertion that the agents who had received service of the arbitration and had conducted the arbitration had been appointed by WTG's insurers without WTG's authorisation. In the present proceedings FOS applied to the court under section 32 of the Arbitration Act 1996 for a preliminary ruling on the jurisdiction of the arbitrator to make a further award, and it appealed against the award on the grounds of serious irregularity under section 68 of the 1996 Act.