Tuesday, May 30, 2023

London Arbitration- managing unnecessary delay

The charterers alleged that the owners had failed to perform the contract and claimed damages of US$6,773,000. The said contract provided for any disputes between the parties to be referred to arbitration in London. Accordingly, charterers appointed [X] as an arbitrator and called upon the owners to respond by appointing an arbitrator within 14 days. However, the owners failed to do so, and the charterers appointed [X] that accepted the appointment to act as a sole arbitrator.

The charterers served their Claim Submissions. However, the owners failed to serve their defence within 28 days. Therefore, the tribunal made an order for the owners to serve their defence or failing to do so, “a final and peremptory order will likely follow with a short time limit coupled with a draconian sanction, as contemplated by section 41/7 of the Arbitration Act 1996.”

The owners failed to serve their defence and on behalf of the owners, [YYY as will be referred to this post being redacted]: “Please be advised that I will mount a comprehensive and vigorous defence of my position in relation to the claim made in your e-mail of 23/9. As I have being unwell for some time, due to my family being kidnapped, may I request an extension to the period wherein I should serve details of my defence. May I also seek your assistance in requesting your client to desist from any further abusive phone calls, e-mails addressed to my colleagues and me.”

The charterers responded: “Further to the exchange below, I have received no Defence or any request for an extension (or indeed any communication from the Respondents at all). Our clients have taken the precaution of serving the Arbitration Notice plus Claim Submissions and copies of interlocutory Orders/exchanges to the Respondents Protections and Indemnity Club under their liability insurance in London. In fact, service was carried out by the Court. As a result, there can be no question whatsoever that the respondents have been made aware of the claims and your involvement. May our clients now have the final and peremptory Order foreshadowed in your e-mail of 23/9/2013. Many thanks in advance.”

The owners did not respond and the tribunal made an order, in final and peremptory terms, the owners to serve their defence by 18th October, or the tribunal will proceed to an award on the materials placed before it, per section 41/7 of Arbitration Act 1996.

On 18th October, [YYY] on behalf of the the owners requested more time to respond as “I had been led to believe that a response had been made in my absence. Unfortunately I have not been shown the papers that were delivered, I believe, to the office in [X]. Nor have I the contact details for the lawyers in [X]. Regrettably I have been hospitalised for some time due to a horrible kidnapping of my wife and child.. .. May I respectfully seek a modest extension of one week, because given the gravity of the situation, and the fact that there is a solid defence, and that I have just emerged from hospital: I need a little time to assemble our defence papers for submission to your esteemed office.”

On 19th October, [YYY] sent another e-mail, “I have been in … hospital Psychiatric Facility …I do not have the reports to hand; but the hospital assure that they will forward them to you forthwith….”

On 21st October, the charterers wrote to the tribunal: “”I need to check progress with you. As you will see from the e-mail chain below, a final and peremptory order was made with an expiry of 18th October. The Respondents did ask for an extension of a week although nothing was ever served. Can you please confirm that submissions are closed and that you are proceeding to your award. The sums involved are very significant and as a result, my clients are anxious to hear from you.”

On the same day, the tribunal responded, “The proceedings are indeed closed. I shall proceed to my award as soon as I can.”

That prompted another message from [YYY]:

 “I was shocked to receive your e- mail of the 13rd inst. I was of the opinion that this matter had been dealt with some time ago. Unfortunately I have been in hospital frequently over the last month, and indeed remain under treatment. The illness is regrettably of a psychiatric nature which was directly caused by the torture and kidnaping of my wife and child whom both were rapped and battered. I have never received papers from your lawyer in london nor indeed do I know his name. I apologise for the lateness of my reply, but I respectfully seek the opportunity to place our evidence, which we believe to be robust, and complete, in front of the relevant authority. The evidence will be at your disposal forthwith.

However, if found necessary, we will vigorously contest the award, as it has been given without evidence on our part.

I also wish to voice my concern about the torrent of abuse that has heaped on my colleagues, and me, since August of this year, It has been malicious, threatening, intimidating and gratuitously insulting. The lawyers believe it is more serious than that.

Yours Sincerely

YYY[REDACTED]

And on 8th November, [YYY] sent another e-mail repeating more or less the reasons argued previously for the delay in responding and asked for some more time.

Two weeks passed, and the tribunal heard nothing from him or his “colleagues”. Therefore, the tribunal determined that it should proceed to an award as the matter had dragged on long enough. The tribunal held that the charterer’ claim succeeded in the settlement amount agreed to by the charterer and the owners Protection and Indemnity Club liability insurance in the sum of US$2,965,033

Award accordingly.

Final Award, 11th November 2013

Note: For more information, please check on Jus Mundihttps://jusmundi.com/en/.These awards mostly come into the public domain through enforcement under the NYC 1958.

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