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Legal Notes

Legal Notes (By a legal correspondent) I. DISPUTES UNDER RELATED AGREEMENTS Important question of procedure relating to the subject of arbitration have -*- recently been considered in the case of Bulk Oil (2ug) A.C. -v- Trans- Asiatic Oil Ltd. S.A. (1973) 1 Lloyd's Rep. 129. On March 10, 1971, the plaintiffs and the defendants entered into a crude oil transportation agreement under which the plaintiffs undertook to deliver oil to the defendants for transportation by vessels owned or chartered by the defendents and via a pipeline ; the defendants agreeing to deliver it to the defendants at AshKelon. Under the agreement which was to be effective from June 1, 1971, to Dec. 31, 1972, 300,000 tons of oil were to be carried in 1971 and a further 650,000 tons during 1972. The plaintiffs had an option, declarable by Sept. 30, 1971, to extend the contract period until Dec. 31,1973, and increase the quantity for 1973 by a further 600,000 tons. It was agreed that any dispute in connection with this agreement should be settled in Geneva under the rules of Conciliation and Arbitration of the International Chamber of Commerce by one arbitrator appointed in accordance with the said Rules. The arbitration proceedings were to be con­ ducted in the English language and to be governed by English Law. The plaintiffs took on time charter the 6,300 ton vessel Pyros V and chartered her to the defendants under a multiple-voyage charter-party dated April 18, 1971, Under that charter the voyages were to be made in accordance with monthly schedules of arrival of the vessel at the loading port to be submitted by the plaintiffs to the defendants not later than the fifth of each month preceeding the month during which the vessel would arrive to load cargo. The charter further provided that "( a ) This Charter shall be construed and the relations between the parties determined in accordance with the laws of Englandand "(b) Any dispute arising out of this charter shall be decided by the English Courts to whose jurisdiction the parties hereby agree. In 1972 disputes arose under the transportation agreement. The plaintiffs wished to switch a voyage to the defendant's account which the defendants refused to accept. The plaintiffs then claimed that the defendants were in breach of the transportation agreement and also repudiating it. In the course of subsequent litigation the question arose as to where there are disputes under two related agreements of which only one contains an arbitration clause, will the Court exercise its discretion to allow both disputes to proceed to litigation together if (among other reasons relevant to the dis­ cretion) a stay of the litigation relating to one of these disputes would be liable to cause substantial injustice to the party which wants them to be litigated together ? This important question was discussed in detail in the Queen's Bench Division and finally Mr. Justice Kerr held that where there are disputes under two related agreements of which only one contains an arbitration clause the Court will exercise its discretion to allow both disputes to proceed to litigation together if (among other reasons relevant to the discretion) a stay of the litigation relating to one of these disputes would be liable to cause substantial injustice to the party which wants them to be litigated together. In this connection the Court will take into consideration whether or not the party seeking to litigate both disputes together is in some way to be held responsible for the dilemma in which he finds himself. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asian International Arbitration Journal Kluwer Law International

Legal Notes

Asian International Arbitration Journal , Volume 40 (4): 1 – Aug 1, 1973
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Publisher
Kluwer Law International
Copyright
Copyright © 1973 Kluwer Law International BV, The Netherlands
ISSN
1574-3330
Publisher site
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Abstract

(By a legal correspondent) I. DISPUTES UNDER RELATED AGREEMENTS Important question of procedure relating to the subject of arbitration have -*- recently been considered in the case of Bulk Oil (2ug) A.C. -v- Trans- Asiatic Oil Ltd. S.A. (1973) 1 Lloyd's Rep. 129. On March 10, 1971, the plaintiffs and the defendants entered into a crude oil transportation agreement under which the plaintiffs undertook to deliver oil to the defendants for transportation by vessels owned or chartered by the defendents and via a pipeline ; the defendants agreeing to deliver it to the defendants at AshKelon. Under the agreement which was to be effective from June 1, 1971, to Dec. 31, 1972, 300,000 tons of oil were to be carried in 1971 and a further 650,000 tons during 1972. The plaintiffs had an option, declarable by Sept. 30, 1971, to extend the contract period until Dec. 31,1973, and increase the quantity for 1973 by a further 600,000 tons. It was agreed that any dispute in connection with this agreement should be settled in Geneva under the rules of Conciliation and Arbitration of the International Chamber of Commerce by one arbitrator appointed in accordance with the said Rules. The arbitration proceedings were to be con­ ducted in the English language and to be governed by English Law. The plaintiffs took on time charter the 6,300 ton vessel Pyros V and chartered her to the defendants under a multiple-voyage charter-party dated April 18, 1971, Under that charter the voyages were to be made in accordance with monthly schedules of arrival of the vessel at the loading port to be submitted by the plaintiffs to the defendants not later than the fifth of each month preceeding the month during which the vessel would arrive to load cargo. The charter further provided that "( a ) This Charter shall be construed and the relations between the parties determined in accordance with the laws of Englandand "(b) Any dispute arising out of this charter shall be decided by the English Courts to whose jurisdiction the parties hereby agree. In 1972 disputes arose under the transportation agreement. The plaintiffs wished to switch a voyage to the defendant's account which the defendants refused to accept. The plaintiffs then claimed that the defendants were in breach of the transportation agreement and also repudiating it. In the course of subsequent litigation the question arose as to where there are disputes under two related agreements of which only one contains an arbitration clause, will the Court exercise its discretion to allow both disputes to proceed to litigation together if (among other reasons relevant to the dis­ cretion) a stay of the litigation relating to one of these disputes would be liable to cause substantial injustice to the party which wants them to be litigated together ? This important question was discussed in detail in the Queen's Bench Division and finally Mr. Justice Kerr held that where there are disputes under two related agreements of which only one contains an arbitration clause the Court will exercise its discretion to allow both disputes to proceed to litigation together if (among other reasons relevant to the discretion) a stay of the litigation relating to one of these disputes would be liable to cause substantial injustice to the party which wants them to be litigated together. In this connection the Court will take into consideration whether or not the party seeking to litigate both disputes together is in some way to be held responsible for the dilemma in which he finds himself.

Journal

Asian International Arbitration Journal – Kluwer Law International

Published: Aug 1, 1973

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