England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)

		The Rolls Building 7 Rolls Buildings, Fetter Lane London EC4A 1NL
		27/06/2018

MRS. JUSTICE MOULDER DBE:

1. I deal now with the scope of what should be remitted to the Tribunal in the light of my judgment. The appellant owners contend that remission should be limited to reconsideration by the Tribunal of its finding that the charterers had title to sue, based on the assignment.
2. The respondent contends that the scope of what is remitted should be that the Tribunal to be permitted to reconsider its finding that the respondent had title to sue, based not only on the assignment but also under the charterparty.
3. For the respondent it was submitted that there was clarification sought from the Tribunal of the evidence relied upon that the charterers had title to sue. This was provided on 30th December 2017 and is referred to in the judgment of this court at paragraph 9. The response from the Tribunal by way of clarification, referred to the claimant's submissions and the assignment letter dated 27th March 2013 and it states "which the Tribunal felt supported this submission".
4. At paragraph 34 of the judgment of this court the court stated:

"It is to be inferred from the Award (for the reasons discussed above) that the Tribunal's decision was based on the finding that the respondent had title to sue based on the assignment, rather than the charterparty."

5. It is submitted now for the respondent that it may be inferred that the Tribunal did not make a positive finding that the respondent did not have title to sue under the charterparty. It is therefore submitted for the respondent that the Tribunal should be able to consider the question on remission and avoid what is termed a 'procedural black hole' if the Tribunal is not also able to consider the title to sue under the charterparty.
6. The respondent has referred me to a judgment of the Privy Council in Sans Souci Limited v VRL Services Limited [2012] UKPC 6 and in particular paragraphs 10 and 17 of that judgment. The respondent relies on that judgment as showing the power to remit to a Tribunal in order to address issues which either have not been resolved or not been properly resolved.
7. For the owners it was submitted that the issue to be remitted cannot encompass whether the award can be upheld by reference to the charterer's claims under the charterparty because the issue has been determined by the court and the owners make reference to paragraph 37 of the judgment of this court. It is further submitted for the owners that the charterers are seeking, in fact, to resurrect the Tribunal's jurisdiction in relation to an argument that has already been rejected by the Tribunal's clarification and by this court. It is submitted that remission is not an opportunity to reopen all matters previously before the tribunal.
8. In response to the authority relied upon by the respondent of Sans Souci, it was submitted for the owners that this was in a different context where the Tribunal had failed to deal with an issue, that of unrecoverable expenses and the owners stress paragraph 17 of the judgment has to be read accordingly, and that paragraph refers to the fact that an arbitration award is prima facie conclusive and the court has limited powers of intervention. In this case it is submitted for the owners that if the respondent took the view that there was a failure to deal with an issue, the charterers could have brought a section 68 challenge or sought further clarification.
9. At paragraph 36 of the judgment of this court the court concluded that:

"In this case the court cannot determine whether the Tribunal answered the question of law correctly on the face of the award. It is to be inferred from the award that the Tribunal's decision was based on the finding that the respondent had title to sue based on the assignment rather than the charterer, but having proceeded on this basis this court cannot determine whether the Tribunal determined that Justorganic suffered a loss."

10. In relation to the alternative argument advanced by the respondent, the court found that there was no basis in the award for upholding the award on the alternative basis. The question of whether title to sue was based on the charterparty has already been raised with the Tribunal by way of clarification. That is clear both from the question that was put to the Tribunal in seeking clarification and in the response that was received and to which I referred earlier. Therefore, in my view, this is not a case where the issue has not been properly resolved. It has already been raised by way of clarification to the original award. To remit back to the Tribunal at this point the issue of whether title to sue could have been based on the charterparty would in my view be seeking to reopen a matter which has already been determined by the Tribunal, taking the award and the clarification together.
11. At paragraph 37 of the judgment of this court the court refused to uphold the award for reasons not expressed in the award, namely that the respondent suffered loss and was entitled to recover under the charterparty. This court was unable to do so because of the findings in the award. In my view, the charterers cannot now seek to reopen the alternative argument before the Tribunal. Accordingly, the award is to be remitted to the Tribunal to reconsider its finding that the respondent had title to sue in relation to the court's determination that an assignee cannot recover more from the debtor than the assignor could have done had there been no assignment.
[Further submissions]
12. Dealing then with the issue of costs, the respondent submits that its liability to pay the costs of the appeal should be limited and that it should only be liable for the costs in relation to the question of law which is being remitted to the tribunal once the outcome of that remission is known. It is submitted for the respondent that as things stand there has been no determination by this court as to whether or not the owners have succeeded on the question of law and their success is dependent on the outcome of that remission.
13. It is submitted further for the respondent that this court has power to make such an order, that the court should make an order in relation to that part of the costs, that those costs should be costs in the arbitration.
14. Alternatively, it was submitted for the charterers this court could reserve the issue of costs until the outcome of the remission to the tribunal is known. The issue of the financial position of the charterers has been raised and counsel informs me that the charterers are in voluntary solvent liquidation.
15. For the owners it was submitted that costs should follow the event in the usual way as they are the winners. Further, it was submitted for the owners that the costs of the appeal are not costs of the arbitration within the meaning of section 59 of the Arbitration Act and that reference in that section to legal or other costs is not capable of extending to the costs of this appeal. It was also submitted for the owners that delay in determining the issue of costs could be prejudicial to the owners in the light of the financial position of the charterers, although counsel noted the statement that the charterers are in fact in voluntary and not involuntary liquidation.
16. In my view, this was an appeal. The award has not been upheld but has been remitted to the Tribunal. In my view, on this basis, the owners are to be regarded as the successful party. They brought an appeal that the Tribunal had made an error of law, their arguments succeeded on an appeal and the award has not been upheld. The outcome of the remission, in my view, does not determine the question of the costs of this appeal. Accordingly, I find that the owners are entitled to their costs and I make an order accordingly. I will of course deal now with the submissions as to quantum of those costs.
[Further submissions]
17. It falls to me to summarily assess costs. I have before me a statement of costs dated 25th June 2018. That has a total figure of £44,018 and I note, because it is relevant, that at the time of the hearing a statement of costs had been produced dated 10th May 2018, for which the sum of £28,285.50 was claimed.
18. For the respondent it was submitted that a 50% increase was not reasonable and proportionate, that the original figure of some £28,000 covered the application for permission and the hearing and there is no justification for a 50% increase post hearing. In particular, counsel for the respondent noted the increase of some £2400 in attendance on others, £2260 on work done on documents. In relation to the work done by counsel, the fee for counsel's advice appears to show an increase of some £8700, but it has been accepted by counsel for the owners that this must be an error.
19. In relation to the original costs statement of some £28,000, counsel for the respondent questioned the involvement of two counsel, as referred to on the statement of costs. Counsel also submitted that it was not reasonable and proportionate for the attendance at the hearing to claim for two members of the firm instructing. In relation to the fee for the hearing, counsel for the respondent noted that there had been an increase of some £12,000.
20. In response, counsel for the owners conceded, as mentioned, that the increase in counsel's fees was an error in relation to advice. In relation to the fee for hearing, counsel noted that the original fee was a brief fee of £8000 and that the fee for today was a further £12,000. In relation to the work which has been done and which explains the 50% increase, counsel for the owners referred to the correspondence with the court which had been generated by counsel for the respondent and which had necessitated a considerable amount of work in response from the owners' legal team. Counsel for the owners also said that the work had included investigation of the status of the parties, in particular the financial position of the charterers and whether or not they were in liquidation, and the consideration of whether or not an application for security for costs would be made if an appeal was to proceed.
21. Counsel for the owners said that there had been no duplication at counsel level. Mr. Ketcheson was initially involved, having been involved in the arbitration, but not subsequently once the initial involvement had passed. He drafted the initial challenge, but thereafter there was no duplication. In relation to attendance by instructing solicitors at the original hearing, counsel for the owners stated that three members of the instructing firm had been present but only two had been charged for.
22. The test, as I have already referred to, on a summary assessment is for the court to assess what is reasonable and proportionate having regard to the factors set out in the rules. Those include the complexity of what is involved and the sums at issue. It seems to me, focusing on particular items which have been challenged, that as far as attendance at the original hearing is concerned, only one member of the instructing solicitor's team can properly be charged for. Whether or not people choose to have more members of the team present is a matter for them. In relation to the two counsel, I am satisfied on the explanation that there has been no duplication. I will obviously have to make an adjustment for the apparent error in relation to the fee for counsel's advice, but I do take into account the work that has been generated by the respondent in engaging in correspondence with the court following circulation of the draft judgment.
23. I have regard to the significant increase in both work on documents and attendance on others, as well as looking generally as to whether or not the amount of work can be justified.
24. Taking the matters in the round, it seems to me that the appropriate figure on a summary assessment which can be said to be reasonable and proportionate in the circumstances is the sum of £32,000.
[Further submissions]
25. I now rule on the application for permission to appeal. The test is set out in section 69(8) of the Arbitration Act 1996. The court may only grant permission where the decision is of general public importance or there is some other special reason that the Court of Appeal should consider it.
26. Notwithstanding the observations of Mrs. Justice Cockerill on the issue when granting permission, this court is not bound by those observations and in my view there is no matter of general public importance in this case. The proposition of law was not in dispute between the parties, the issue was the finding of the Tribunal on the question of title to sue and whether in fact Justorganic had suffered loss. The respondent submits that there are special reasons for permission to be given, namely that the effect of the court's refusal to conclude that the award could be upheld on the alternative basis or to allow it to be remitted to the Tribunal gives rise to the risk of serious injustice.
27. In my view, the respondent's argument does not establish any special reason for permission to be granted. The respondent does not agree with the court's conclusion, but that does not in my view amount to a special reason. For those reasons permission to appeal is refused.
- - - - - -