TMI Blog1993 (12) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed in the arbitration agreement, the arbitrator or umpire shall have power to make an award dismissing any claim in a dispute referred to him if it appears to him that the conditions mentioned in Sub-section (2) are satisfied. (2) The conditions are - (a) that there has been an inordinate and inexcusable delay on the part of the claimant in pursuing the claim; and (b) that the delay - (i) will give rise to a substantial risk that it is not possible to have a fair resolution of the issues in that claim; or (ii) has caused, or is likely to cause or to have caused, serious prejudice to the Respondent... On 13 January 1992 the charterers applied to the arbitrator Under Section 13 A of the 1950 Act. On 13 August 1992 the arbitrator dismissed the owners' claim for damages in the arbitration for want of prosecution. The owners concede that the arbitrator had jurisdiction to make the order. The owners submit that the arbitrator made an error of law: he took into account delay between 5 August 1985 when the owners began the arbitration proceedings and 1 January 1992 when Section 13A came into force; he should have confined himself to deciding whether the delay bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... watering of the cargo whilst it was shipped at Vancouver. If such excess was indeed present there was a risk that the vessel would suffer severe corrosion. This complaint was followed up by a letter from the shipowners' solicitors on 17 July 1985, and within three weeks the parties had agreed to appoint Mr. M.J. Baker-Harber as the sole arbitrator, pursuant to a clause in the charterparty which provided that disputes thereunder should be arbitrated in London. Points of claim were delivered promptly, and points of defence were forthcoming on 28 February 1986, together with a request for further and better particulars of the points of claim. The shipowners responded with their own request for particulars, and, some months later, points of reply. This was good going, and there was no reason why the dispute should not have come to a hearing in proper time. Sadly, apart from some desultory correspondence about security in the course of which the charterers first of all put their solicitors in funds for such security and then having heard nothing took the moneys back, nothing happened until April 1991, when the shipowners' new solicitors wrote to the arbitrator proposing a prelim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impression. I also agree with him that the statute did enable him to take into account delays occurring before it came into force. To explain my reasons, I must first set out the legislative history of the new powers. Those practising law in England are well aware of the jurisdiction to dismiss stale actions for want of prosecution created by the courts during the past 25 years. As the present case illustrates, however, many participants in English arbitration come from abroad. To such persons the concept may be wholly unfamiliar, and the idea that it might be applied in the field of arbitration may seem on first acquaintance very strange. For this reason, and not only because the High Court practice forms an indispensable background to the practice of the new legislation, it is necessary to sketch the history of this jurisdiction. For present purposes we may begin with the year 1968. Until then it had been taken for granted that the remedy for dilatory progress in legal proceedings lay in the rules of court which enabled a Defendant offended by slow progress to apply for a peremptory order requiring the Plaintiff to set affairs in motion or suffer the consequences. It was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with all due speed. A delay which might have been acceptable if the writ had been issued promptly could be seen as inordinate in the context of the time which had already elapsed. The past quarter of a century has amply shown the benefits of this new jurisdiction. Many actions still take far too long to come to trial, but dilatory lawyers acting for Plaintiffs now live under the threat that their clients' actions will be dismissed for want of prosecution and that they will be held to blame. Nevertheless, it is undeniable that this judge-made law has left behind it a legacy of theoretical and practical difficulties yet to be resolved. Some of these are currently before the House in Roebuck v. Mungovin. It was not long before litigating lawyers began to reflect on whether the powers thus ascribed to the judge at common law might also be possessed by an arbitrator. For a while the notion was current in arbitration circles that since an arbitrator is appointed to decide the substantive dispute between the parties in a manner which is procedurally just, his mandate extends to deciding in the same manner as the judge whether the conduct of the claimant has made it impossible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owners) v. Distos Cia Naviera SA, The Siskina and the Bremer Vulkan case. (3) Next, it was suggested that the right of each party to ask the arbitrator to proceed to an award is in the nature of a power, which will lapse unless exercised within a reasonable time. This invocation of a lapsing power has however been rejected as inconsistent with the decision in the Bremer Vulkan case: see e.g. Excomm Ltd. v. Guan Guan Shipping (Pte) Ltd., The Golden Bear. (4) The final possibility employed a contractual analysis, suggesting that an inordinate and inexcusable delay might bring the contract to arbitrate to an end, by frustration, wrongful repudiation, or mutual abandonment. However, the possibility that prolonged delay by a claimant was an external supervening event capable of yielding a frustration was laid to rest in Paal Wilson and Co. A/S v. Partenreederei Hannah Blumenthal, The Hannah Blumenthal. The concept of a consensual abandonment is sound in theory (ibid) but largely useless in practice, given the difficulty of extracting a consensual termination of the agreement to arbitrate from a situation in which, ex hypothesi, neither party has done anything. The possibility that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (2) The conditions are - (a) that there has been inordinate and inexcusable delay on the part of the claimant in pursuing the claim; and (b) that the delay - (i) will give rise to a substantial risk that it is not possible to have a fair resolution of the issues in that claim; or (ii) has caused, or is likely to cause or to have caused, serious prejudice to the Respondent. (3) For the purpose of keeping the provision made by this Section and the corresponding provision which applies in relation to proceedings in the High Court in step, the Secretary of State may by order made by statutory instrument amend Sub-section (2) above. (4) Before making any such order the Secretary of State shall consult the Lord Chancellor and such other persons as he considers appropriate. (5) No such order shall be made unless a draft of the order has been laid before, and approved by resolution of, each House of Parliament. An important feature of the new regime was that it did not take effect immediately on the passing of the statute which brought it into existence (i.e. on 1 November 1990), as did some other provisions of the 1990 Act, but was appointed by Section 124(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposite Act are to be treated as having come in force simultaneously with the original Act, and it is common to find that the amendment is expressed, either in the new Section itself or in a transitional provision of the amending legislation, to take effect only in the future. Furthermore, if the addition of Section 13A were fully retrospective in the sense proposed by the arbitrator, it would follow that there had been since 1950 a power to dismiss an arbitral claim for want of prosecution although no such power was recognised to exist in the High Court until 18 years later; and it would also follow that if in for example 1986 an arbitrator in ignorance of Crawford v. A.E. A Prowting Ltd. and the Bremer Vulkan case had made an award purporting to dismiss the claim for want of prosecution the award would have been wholly ineffective, yet (if the effect of the 1990 Act was to write back the Section 13A powers to the year 1950) the parties would find that the arbitrator was retrospectively vested with the powers which he had wrongly asserted, with the consequence that the arbitration would be deemed with effect from 1 January 1992 to have been brought to an end in 1986. My Lords, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f individuals. Nevertheless, I must own to reservations about the reliability of generalised presumptions and maxims when engaged in the task of finding out what Parliament intended by a particular form of words, for they too readily confine the court to a perspective which treats all statutes, and all situations to which they apply, as if they were the same. This is misleading, for the basis of the Rule is no more than simple fairness, which ought to be the basis of every legal rule. True it is that to change the legal character of a person's acts or omissions after an event will very often be unfair; and since it is rightly taken for granted that Parliament will rarely wish to act in a way which seems unfair it is sensible to look very hard at a statute which appears to have this effect, to make sure that this is what Parliament really intended. This is, however, no more than common sense, the application of which may be impeded rather than helped by recourse to formulae which do not adapt themselves to individual circumstances, and which tend themselves to become the subject of minute analysis, whereas what ought to be analysed is the statute itself. My Lords, my purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree the statute is retrospective if it bears the meaning for which the shipowners contend. That it has this character to some extent is not in question, since the parties agree that the new powers apply to agreements made before 18 January 1992. Thus, whilst parties who agreed in 1986 to arbitrate their disputes in London could at the time have been confident that they could never be penalised by slow progress, this tacit immunity was deleted from the agreement on 1 January 1992; and what is more the deletion will have an effect, not only by giving a new character to delays after that date, but also (by analogy with the law developed in the High Court) by attaching significance to delays already past; for even if, as the shipowners contend, the earlier delays are not directly penalised, they create a situation in which the claimant is required to proceed with particular dispatch at a later stage. So much the shipowners concede, to my mind rightly; for Parliament cannot have intended that this important law reform should lie completely dormant until sufficient time had passed for arbitration agreements to be made, disputes to arise, references made to arbitration, and long periods o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents made, and references commenced, before 1 January 1992 are capable of being affected by an order Under Section 13A. Nevertheless the passage quoted is germane, because it reveals an assumption that a person newly qualifying for relief may have that relief assessed in terms of events occurring before the relief became available. Moreover, the group of cases arising Under Section 1 of the 1846 Act, decided by the Court of Queen's Bench in 1848 and reported in the same volume as R v. Inhabitants of St Mary, Whitechapel, show that for the purpose of computing the period of five years' residence which made a pauper irremovable, time elapsing before as well as after the passage of the Act would be taken into account: see especially R v. Inhabitants of Harrow on the Hill. Other examples of cases where 'a part of the requisites for [the action of a statute] is drawn from time antecedent to its passing' are collected in Bennion Statutory Interpretation; (2nd edn, 1992) Section 99 and 44 Halsbury's Laws (4th edn) para 921. These cases do not point directly to a conclusion, but they do demonstrate that where an intermediate type of retrospectivity is in issue the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the distinction just mentioned is misleading, since it leaves out of the account the fact that some procedural rights are more valuable than some substantive rights, and partly because I doubt whether it is possible to assign rights such as the present unequivocally to one category rather than another. Thus, whilst keeping the distinction well in view, I prefer to look to the practical value and nature of the rights presently involved as a step towards an assessment of the unfairness of taking them away after the event. Dealing first with the value of the rights, we are concerned here not with the merits of the particular case, but with the generality of rights which Parliament must have contemplated would suffer if the Section took effect retrospectively. So understood it seems to me that such rights are in principle and in practice of value, although the worth in terms of money will of course depend on the merits of the underlying dispute. I pass next to the nature of these rights. Ex hypothesi the situation contemplated by Parliament is that in their exercise the claimant has already been guilty of inordinate and inexcusable delay. Here I must pause for a moment over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... believe be sufficient, in the context of Section 13A as a whole, to demonstrate that the delay encompasses all the delay which has caused the substantial risk of unfairness. If there were any doubt about this the loud and prolonged chorus of complaints about the disconformity between practices in arbitration and in the High Court, and the increasing impatience for something to be done about it, show quite clearly that Section 13A was intended to bite in full from the outset. If the position were otherwise it would follow that, although Parliament has accepted the advice of all those who had urged that this objectionable system should be brought to an end, and has grasped the nettle and provided a remedy, it has reconciled itself to the continuation of arbitral proceedings already irrevocably stamped with a risk of injustice. I find it impossible to accept that Parliament can have intended any such thing, and with due respect to those who have suggested otherwise I find the meaning of Section 13A sufficiently clear to persuade me that in the interests of reform Parliament was willing to tolerate the very qualified kind of hardship implied in giving the legislation a partially retro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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