CADOGAN MARITIME INC V TURNER SHIPPING INC

[2013] EWHC 138 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Hamblen, 5 February 2013

Arbitration - Additional award for accrued interest - Whether claim presented to the tribunal - Whether claim dealt with in the award - Arbitration Act 1996, sections 57, 68 and 69

Under a Memorandum of Agreement dated 21 June 2007 TSI sold a new-build vessel to CMI. The first instalment of US$7.7 million was paid to TSI on 5 July 2007, in return for a Refund Guarantee for the same sum issued by a bank. In October 2009 CMI asserted that TSI was in breach of the MOA, and made a demand against the bank under the Refund Guarantee. TSI commenced arbitration in London seeking a declaration that CMI had no right to make the demand, and seeking damages of US$6 million for loss of bargain. The bank paid US$7.7 million plus accrued interest of US$923,520.77 into an escrow account pending the outcome of the arbitration. The tribunal held that TSI was entitled to damages of US$6 million. Subsequently TSI applied to the tribunal for an additional award under section 57(2) of the Arbitration Act 1996 in respect of its entitlement to the accrued interest. The tribunal made the award as requested, and CMI applied to the court to set aside the award under section 68 of the 1996 Act, or in the alternative for permission to appeal against the award under section 69 of the 1996 Act, on the ground that the tribunal had no jurisdiction to make the additional award.