Lloyd's Maritime and Commercial Law Quarterly
STALE ARBITRATIONS
The Leonidas D
Two parties enter into a contract which contains an arbitration agreement. A dispute arises between them and one of them (the claimant) causes arbitration proceedings to be started. Thereafter he fails to take the necessary steps to bring the matter on for hearing. For example, he does not apply for the necessary directions as to the conduct of the interlocutory stages. Even if some directions have been obtained and acted upon, the claimant may fail to do whatever is necessary to enable the process of arbitration to proceed towards the making of the final award. It may even be that the order which the claimant does not seek is that which is often the final interlocutory order, viz. the fixing of a date for the hearing itself. Whatever the next stage in the process is, it does not take place and such long delay occurs that it is no longer possible to have a satisfactory hearing of the dispute. Can nothing be done in these circumstances to bring the matter to a close?
The decision of the Court of Appeal in The Leonidas D
1 is another demonstration of the inability of the courts, after the decision of the House of Lords in Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corporation Ltd.2, adequately to cope with this not unfamiliar situation. What has emerged is a fundamentally different approach to the nature and purpose of English arbitration displayed, on the one hand, by the majority of the House in the Bremer Vulkan case (Lords Diplock, Edmund-Davies and Russell of Killowen) and, on the other hand, by almost every other judge who has been concerned with the subject, including many with long experience of commercial arbitrations. The way the situation has developed is complicated and has been gradual. If it is to be undertood, it is necessary to trace a rather arid path through the authorities, but this problem will not go away and the cases are too recent to be covered fully in the leading textbooks3. However, even the most arid desert can have a ghastly fascination and, who knows, some readers may even find a flower or two on the way.
To start, it is necessary to go back to 1968, when the Court of Appeal decided Allen v. Sir Alfred McAlpine & Sons Ltd.4 Before that case it was generally thought that even where there was such long delay in the interlocutory stages of an action that the defendant applied to strike it out for want of prosecution, the court would not make such an order unless the plaintiff had been given one more chance. The order should always be that the action should be dismissed “unless” the plaintiff took the next step within a stated time. In Allen’s case it was held that where the delay was prolonged and inexcusable and such as was likely to cause serious prejudice to the defendant, the court could dismiss the action for want of prosecution on the first application. There
1 Allied Marine Transport Ltd. v. Vale de Rio Doce Navegaçao S.A. (The Leonidas D) [1985] W.L.R. 925.
2 [1981] A.C. 909.
3 e.g. Mustill and Boyd, The Law and Practice of Commercial Arbitration in England (1982) was completed before The Hannah Blumenthal reached the House of Lords.
4 [1968] 2 Q.B. 229.
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