Vincor Shipping Co. Ltd. v. Transatlantic Schiffahrtskontor Gmbh
Read the full judgment text of HCCL 99/1986 on BabelCite. This HCCL judgment was delivered on 9 January 1987.
1. This is an application by the Plaintiff for a declaration that the appointment by the Defendant of Mr. Julian Lister as the Defendant's arbitrator is null and void. The arbitration clause in the charterparty concerned requires the arbitrators to be "commercial shipping men". The short question is whether Mr. Lister is a commercial shipping man. Both sides, as I understand it, accept that he is a shipping man and the question resolves itself into whether he is a commercial man. There is some g
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HCCL000099/1986 HEADNOTE Charterparty arbitration clause; "commercial shipping man".
IN THE SUPREME COURT OF HONG KONG HIGH COURT COMMERCIAL LIST __________
BETWEEN:
___________ Coram: The Honourable Mr. Justice Nazareth in Chambers Date of Hearing: 5 January 1987 Date of Delivery of Judgment: 9 January 1987 ___________ JUDGMENT ___________ 1. This is an application by the Plaintiff for a declaration that the appointment by the Defendant of Mr. Julian Lister as the Defendant's arbitrator is null and void. The arbitration clause in the charterparty concerned requires the arbitrators to be "commercial shipping men". The short question is whether Mr. Lister is a commercial shipping man. Both sides, as I understand it, accept that he is a shipping man and the question resolves itself into whether he is a commercial man. There is some guidance upon this question in the law, even if it is not a great deal. 2. Mr. Sussex for the Plaintiff referred me to the following. First of all footnotes 7 and 10 at pages 213 and 214 of Mustill & Boyds Commercial Arbitration which are as follows:
3. Second, the following passage at p. 107 of the 20th Edition of Russell on Commercial Arbitration:
4. Third, the dictionary meaning of commercial with its emphasis on commerce and trading. 5. Fourth, Rahcassi v. Blue Star. In that case the arbitration clause provided that "arbitrators and umpire shall be commercial men and not lawyers". Mr. Justice Roskill, as he then was, in his judgment first of all concluded that the phrase 'commercial men' was not too vague. That point is not raised in this case and I think it is now settled law that that phrase is not too vague at any rate in an arbitration clause. It is of interest however that in reviewing the authorities upon that matter, Mr. Justice Roskill sets out the following passage in a judgment of Bankes L.J.:
6. Mr. Justice Roskill then went on to hold that when construing a commercial contract, the Court should hesitate long before applying to an arbitration clause couched in terms used for long, the strict rules of construction applied to conditions of defeasance when considering forfeiture provisions in wills. He then went on to say this:
7. And finally Mr. Sussex referred me to Pando v. Filmo, in which the arbitration clause in a charterparty provided that the arbitrators shall be commercial men. It was the appointment of Mr. Clyde, the founder of the firm which bears his name, that was questioned. He had practised for many years as a solicitor but some 15 years or so before those proceedings he surrendered his practising certificate and became a full-time maritime arbitrator. It was contended that he was not a commercial man. Mr. Justice Donaldson, as he then was, agreed with the earlier view of Mr. Justice Roskill in Rahcassi that it was not necessary or desirable to define the words 'commercial men'. He then went on to say:
8. Proceeding then to Mr. Lister's personal circumstances, he qualified as an English solicitor in January 1970. In June of that year he joined Sinclair Roche & Temperley as an assistant solicitor handling cargo claims, charterparty disputes and personal injury claims. 9. In August 1973 he joined John Laing (Management) Ltd., the London correspondents of the Oceanus Club, for whom he worked until October 1979 handling P & I and Defence claims. 10. In October 1979 he came to Hong Kong to start the office of John Laing (Far East) Ltd., a company formed to act as Far East correspondents of the Oceanus Club and the Strike Club. He handled P & I, Defence and Strike claims for those clubs. 11. John Laing (Far East) Ltd. closed their office in March 1984, after the Oceanus Club had been placed in liquidation. 12. And in May 1984 J.A. Lister & Co. started business. They are the Hong Kong correspondents of the British Marine Mutual Club and recently they have been appointed as the Far Fast Representatives of the Standard Club. They also do some work for one other Club, although not listed as their correspondents. Apart from this, they handle various types of marine claims, including charterparty disputes. 13. Since May 1984 Mr. Lister has been accepting appointments as arbitrator in certain types of shipping disputes. 14. It was not disputed and I think it is clear from the passages I have quoted that a practising lawyer would not be a "commercial man". Of course Mr. Lister ceased to be a practising lawyer about 12 years before his appointment as an arbitrator by the Defendant. But Mr. Sussex submits that notwithstanding the cessation of practise as a solicitor, Mr. Lister upon taking up his subsequent employment, simply continued to do "inhouse" what he had done formerly, i.e. deal with legal or quasi-legal matters and mostly matters of a litigious or potentially litigious nature; and that in continuing to live in a similar environment, he ought to be similarly excluded. I do not think those are safe or even fair inferences to be drawn from either the affidavits or the P & I Club rules which comprise the only evidence properly before me, or from the list of correspondents of the United Kingdom P & I Club notwithstanding that a significant number of those correspondents are lawyers. Moreover, bearing in mind that the qualification or eligibility of arbitrators is in the nature of conditions precedent to their appointment, I do not think the Courts should encourage the uncertain broadening in this way of a disqualification they have inferred from the expression used. 15. It is suggested in the authorities to which I have referred that the intention of arbitration clauses such as that in this case contemplate arbitration that is not held in accordance with strict rules of evidence and legal principle, rather by men with a "feel" for trade rather than professional people who are assumed to have a less informed and practical approach to business matters. But as members of the Clubs Mr. Lister served during the 12 years are owners of vessels, it may be more reliably supposed that their requirements and preferences could not have failed to purge Mr. Lister of undesired legalistic proclivities. 16. I adopt as the correct approach that propounded by both Mr. Justice Roskill and Mr. Justice Donaldson in the two cases I have referred to, i.e. that such clauses should be given a sensible construction and that they should leave open the possibility of arbitrators being chosen from a wide field of persons with commercial experience, so long at least as they are not practising lawyers. I think that to be astute further to narrow the field of those who have practical commercial experience would be wrong. I accordingly reject Mr. Sussex's first submission, which is really concerned with whether Mr. Lister's legal associations disqualify him, and I proceed to the question of whether Mr. Lister's full-time occupation over the 12 years qualify him as a "commercial man". 17. It is clear from Pando that notwithstanding many years of practice as a solicitor, in contrast to Mr. Lister's only 2½ years, Mr. Clyde became a "commercial man" essentially by virtue of being a full-time maritime arbitrator, although he was also a director of some maritime companies. To paraphrase Mr. Justice Donaldson, in the end the question is whether a whole time employee of a correspondent of clubs handling P & I, defence and strike claims, and more recently marine claims including charterparty disputes, is a commercial man. In Pando, Mr. Justice Donaldson relied upon maritime arbitration being regarded as a normal incident of commercial life by the shipping and commodity trades and he took the view that a person actively engaged throughout all available working hours in maritime arbitrations is regarded in practice as being engaged in the shipping trade and in the commercial side of that trade. 18. The only evidence properly before me as to what Mr. Lister was engaged upon full-time for the 12 years or so proceeding his appointment emerges from the affidavit of Mr. Blacker, one of the Defendant's solicitors and the United Kingdom P & I Club rules exhibited to it. It is regrettable that I have been denied direct and more detailed evidence from Mr. Lister simply upon the belief, which I must confess I find somewhat difficult to understand, that as an arbitrator Mr. Lister should not become personally involved in the application before me. I do not see that an affidavit or letter with the actual detailed nature of his work could have involved him in any greater way. Nevertheless it seems to me that the evidence sufficiently shows that Mr. Lister was engaged full-time in commercial shipping. The risks specified in the United Kingdom P & I Club rules in my view relate to aspects of commercial shipping, aspects that are essential to commercial shipping even if most of them are not directly concerned with purely trading transactions. Commercial shipping could not be carried on without many of them. Practical experience in those matters in my view is practical experience in commercial shipping. Mr. Lister not only served the commercial shipping world, he was of it. 19. In addition Mr. Bell for the Defendant points to the following sentence in the passage that I have already quoted from the judgment of Mr. Justice Donaldson: "It is well known that the shipping industry has two sides; the marine side and the commercial side.". He submits that Mr. Lister, an admittedly shipping man, is quite obviously not on the marine side and that he must therefore be on the commercial side. I think Sir John Donaldson would be surprised to find his classification used to such purpose. But viewed in that way the conclusion I have reached is at least consistent with the classification adopted in Pando. I would however not wish to rely solely or primarily upon such an argument which seems to me too facile. Nor do I see any necessity to rely upon another of Mr. Bell's submissions, i.e. that in Hong Kong which is stipulated as the venue, a more liberal construction is warranted since there are not as many commercial shipping men available to act as arbitrators as there are in London, not that it may not be without merit. 20. As I have indicated, in my judgment on the evidence Mr. Lister is a commercial shipping man and was qualified to be an arbitrator and I accordingly dismiss the application. I will now hear Counsel on costs.
Representation: Mr. Charles Sussex instructed by Messrs. Deacons for Plaintiff. Mr. Adrian Bell instructed by Messrs. Clyde & Co. for Defendant. |