LAW REPORTS

by Derek Jerram

Mangistaumunaigaz Oil Production Association -v- United World Trading Inc.: (Commercial Court List) (21 February 1995)

The parties contracted for the sale of oil. The contract contained an arbitration clause which stated:

"Arbitration, if any, by ICC Rules in London."

Upon the defendant's failure to pay, the plaintiff applied to the ICC for arbitration. The defendant argued that the clause was not binding and that it merely indicated that, if the parties were to agree at some future date to arbitrate, that arbitration would be according to the ICC Rules and in London. Alternatively, the defendant maintained that the clause failed to reflect the parties' true intention and that it was entitled to rectification.

It was held that the arbitration clause was valid and binding. Rectification was not appropriate in the instant case as the defendant had failed to satisfy the court that the arbitration clause did not reflect the parties' true intentions. (Bliss February 1995)

James Lazenby and Co -v- McNicholas Construction Co Ltd: (QBD) (21 December 1994)

Under the Arbitration Act 1950 s.13A, an arbitrator is empowered to dismiss a claim for want of prosecution if it appears that there has been an inordinate or inexcusable delay and that the delay will give rise to a substantial risk of prejudice to the respondent. The claimant appealed against the striking out of its claim, as the claim was still within the limitation period.

There was nothing in the background to the enactment of s.13A to suggest that either the courts or Parliament intended that there should be a power to strike out claims which were not yet time barred. If the principle contained in Birkett -v- James [1978] AC 297, were extended to arbitration, it would be an error of law for the arbitrator to dismiss a claim within the limitation period other than in exceptional circumstances. There was nothing in the nature of an arbitration which suggested that different principles should apply. In the absence of exceptional circumstances, the arbitrator's award should be set aside. (Bliss January 1995).

Richards & Wallington ( Plant Hire) Ltd -v- A Marx & Co Ltd (11 June 1994) (unreported)

It was held that an employee's costs were not recoverable where he could not be described as an expert and fulfilling an expert role. The court decided that the individual was engaged in a factual exercise and was not an independent expert even though the work carried out was detailed and required many calculations. The court held that the costs fell within the ordinary costs which a litigant must bear in preparing his own factual material to prove his case. A contractor is not able to recover the costs of ensuring that adequate records of the work carried out are kept. This is a task which has to be done in any event and so falls under the heading of the contractor's administrative costs.

Joong and Shipping Co Ltd -v- Choi Chong-Sick & Another (1994) ADR LJ 290

The defendant contracted with the plaintiff for the shipment of certain cargo. The plaintiff applied for summary judgment in respect of demurrage and freight. The defendant sought a stay to arbitration under article 8 of the Uncitral Model Law. During previous correspondence between the parties the defendant had admitted liability and the quantum of the plaintiffs claim.

It was held that the stay would be refused as there was a clear and unequivocal admission by the defendant both on quantum and liability. In consequence there was no dispute between the parties and nothing to go to arbitration.

Commission for the New Towns -v- Cooper (Great Britain) Ltd CA (The Independent 12 March 1995)

A party to a contract who, intending the other party to be mistaken as to the terms of their agreement, made false and misleading statements to prevent the other discovering his mistakes, was not entitled to insist on performance of the contract to the letter, but might himself be bound by the agreement which the other mistakenly thought was being made.

Ruxley Electronics -v- Forsyth (CA, 16 December 1994)

This case concerns damages in respect of a swimming pool which was not built in accordance with the specification. Is the measure of damages the cost of rebuilding or loss of amenity? The Court of Appeal held that it is the former, but the case is due to be heard by the House of Lords early in May. The question whether the intention to carry out the rebuilding is relevant may also be argued.

Insurance Co -v- Lloyd's Syndicate (1994) TLR 11 November 1994

This case confirmed that an agreement to arbitrate contains an implied term imparting a duty of confidentiality on both parties. That duty would only cease to exist regarding disclosure of the award if it was necessary for one party to establish legal rights against a third party.

Petromin -v- Secnav Marine Ltd (The Times 9 March 1995)

Where both parties in a case involving a counterclaim were making substantial claims based on the same facts, then any order for security of costs was to be for the full amount of those costs and not merely for the amount by which the plaintiff's costs were increased in defending the counterclaim. Where both parties were founding their claims on the same facts the plaintiff was entitled to be secured in respect of costs no less fully than if he were merely the defendant to the claim advanced in the counterclaim.

When a court was considering whether to grant the permanent stay of a counterclaim in arbitration proceedings it should give appropriate weight to the fact that such an order would absolutely deprive the defendant of his claim and such an order should not be given unless there had been a contumelious failure to comply with a previous order or there was no possibility that any existing temporary stay could succeed. The defendants having failed contrary to the court's order to provide security for the plaintiff's costs of the counterclaim it was proper to give appropriate weight to the fact that an order would absolutely deprive the claimant of his claim.