Asphalt Trader Ltd v West Indies Petroleum Ltd
| Jurisdiction | Jamaica |
| Judge | Batts J. |
| Judgment Date | 31 July 2020 |
| Court | Supreme Court (Jamaica) |
| Docket Number | CLAIM NO. SU2020AD00001 |
| Date | 31 July 2020 |
[2020] JMCC Comm 25
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
IN THE COMMERCIAL DIVISION
Batts J.
CLAIM NO. SU2020AD00001
CLAIM NO. SU2020AADD0000022
(Owners of M/V Kosterberg)
(Owners of M/T Asphalt Trader)
Jerry Hamilton and Remone Foster instructed by Lightbourne & Hamilton for the Asphalt Trader Limited.
Krishna Desai and Amanda Montaque instructed by Myers Fletcher & Gordon for West Indies Petroleum Limited.
Clive Munroe for the Admiralty Bailiff.
Admiralty Claims — Arbitration pending — Applications to Stay Proceedings — Section 11 Arbitration Act — Whether Court has an inherent power to stay — Vessel arrested — Security provided for release — Whether security is to be released.
The applications, in these unconsolidated claims, were heard together. It is convenient to do this because both claims concern the same factual scenario. Both applications are for the same relief and the evidence in each is very similar. The same party is the applicant in each case but the claimant in one action is the defendant in the other. In this judgment I will therefore reference each party by name.
The circumstances can be shortly stated. On the 1 st June 2019 the parties entered into a charter-party agreement with respect to the motor tanker “Asphalt Trader”. That vessel was at all material times, owned by Asphalt Trader Ltd. and, chartered by West Indies Petroleum Ltd. The charter-party had an arbitration clause which provided for the resolution of disputes. In the course of the charter the vessel collided with a pier in Suriname. West Indies Petroleum Ltd alleges that, as the crew of the vessel was employed to the Asphalt Trader Ltd, it is vicariously liable for all consequential loss and damage. The Asphalt Trader Ltd, on the other hand, alleges that West Indies Petroleum Ltd is to blame for taking the vessel into an unsafe port. This would be in breach of a term of the charter-party. They therefore say that it is West Indies Petroleum Ltd. which is liable.
On the 4 th day of May 2020 Asphalt Trader Ltd. commenced proceedings in Claim No. SU2020AD00001 against West Indies Petroleum Ltd. (Owners of M/V Kosterberg) and applied for the arrest of that vessel. The court issued an order for that vessel's arrest on the same day. There were several interlocutory hearings, after which, the vessel was released by order of the court upon sufficient security being provided.
On the 17 th May 2020 West Indies Petroleum Ltd. commenced proceedings in Claim No. SU2020AD00002 against Asphalt Trader Ltd (Owners of M/T Asphalt Trader). and applied for the arrest of the motor tanker “Asphalt Trader.” A warrant for the vessel's arrest was issued on that date. There were several interlocutory hearings and the vessel was eventually released by order of the court upon sufficient security being provided.
Asphalt Trader Ltd. has now applied for a stay of both claims. In each case it wants the security to remain in place. The reason given, in the application for the stay in each case, is that there are pending arbitration proceedings. West Indies Petroleum Ltd. is resisting both applications and says that, notwithstanding the existence of an arbitration clause, this court ought to allow the actions to proceed to trial. They say further that, if a stay is to be granted, the security in Claim No. SU2020 AD00001 should be released, however, the security in SU2020AD00002 should remain in place.
The attorneys have helpfully provided full written submissions on the issues that arise. They made oral submissions which, by agreement, were limited to approximately one hour for each side. I am truly indebted to counsel for their efforts. However, for reasons of time and economy, I will not be repeating those submissions in this judgment. Suffice it to say that the reasons for my decision are greatly informed by the authorities cited.
It seems to me that the just and fair result, consistent with the law and practice in this jurisdiction, is to order a stay of each action. The security in each case is to be released provided only that the bailiff's fees, costs and charges are first paid, as to which the bailiff is to issue an affidavit of satisfaction prior to the release of the security. I make no order for the costs of the applications. My reasons for this decision may be shortly stated.
It is common ground, between the parties, that in this jurisdiction the court in Admiralty has no power, to order security for arbitration proceedings. Jamaica has not passed a statute with a provision equivalent to Section 26 of the Civil Jurisdiction and Judgments Act 1982 (UK). Our law is therefore that which preexisted that Act. The pre-existing law is adequately summarised by Lord Justice Lloyd in the Bazias 3, The Bazias 4 [1993] 2 All ER 964 at 968 (d):
“I turn then to the central question, Section 26 of the 1982 Act, came into force on 1 st November 1984. As to the pre-existing law, I start with a passage from the judgment of Robert Goff LJ in the Andria [1984] 1 All ER 1126 at 1135, [1984] QB 477 at 490:
‘However, on the law as it stands at present, the court's jurisdiction to arrest a ship in an action in rem should not be exercised for the purpose of providing security for an award which may be made in arbitration proceedings. That is simply because the purpose of the exercise of the jurisdiction is to provide security in respect of the action in rem, and not to provide security in some other proceedings e.g. arbitration proceedings.’
It follows that the arrest of the vessel, in each case before me, was intended to secure the claim brought. It matters not that the affidavit, filed in support of the application, may have disclosed the existence of an arbitration clause or pending arbitration proceedings. It does not in all cases follow that, if such a claim is stayed to allow arbitration to occur, the arrested vessel or any security held must be released. This aspect I consider at paragraph 18 below.
It is also common ground, between the parties, that the court has an inherent as well as a statutory jurisdiction to grant a stay of proceedings. A stay will necessarily follow any decision, pursuant to section 11 of the Arbitration Act, to refer parties to arbitration. Sections 11 and 12 of that Act provide:
“11 (1) A court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void; inoperative or incapable of being performed.
(2). Where an action referred to in subsection (1) has been brought, arbitration proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.
12. It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure.”
These provisions reflect the policy of the legislature to facilitate, and indeed encourage, the resolution of disputes by arbitration. This policy position has been frequently stated. It was recently endorsed by the Caribbean Court of Justice, see Belize National Energy Ltd v Maranco Ltd [2015] CCJ 2 (AJ); [2016] 2 LRC 23 at 31.
Reference to arbitration, pursuant to Section 11 of the Arbitration Act, is only mandatory where the requesting party makes the request for arbitration “not later than when submitting his first statement on the substance of the dispute.” Asphalt Trader Ltd. is the requesting party. They are also the Claimant in SU2020AD00001. Manifestly therefore their first statement, on the substance of the dispute, was the claim which was filed. Neither the claim nor the application to arrest the vessel requested a referral to arbitration. A mandatory referral to arbitration, pursuant to Section 11, is therefore not permissible in that claim.
With respect to the application pursuant to Section 11, for SU2020AD00002, the position is similar. Asphalt Trader Ltd is the Defendant in that suit. Their first filing was an application, on 21 st May 2020, for discharge of the warrant of arrest and, in the alternative, for aspects of the claim to be struck out. The affidavits in support went into the details of the claim, the defence and its merit. There was then no application for referral to arbitration.
If therefore a stay is to be granted it has to be pursuant to the court's inherent power to stay proceedings. The power, being inherent, does not owe its existence to any statute. Various provisions in law recognize the power to stay, see Section 48(e) of the Judicature Supreme Court Act and Rules 26.1 (2) (e) and ...
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