London Arbitration 5/13
Disputes arose under a time charter. Owners commenced arbitration proceedings, contending that the Respondents, a company incorporated in St Vincent and the Grenadines, were the charterers. The Respondents denied this, alleging that another entity with the same name, incorporated in Hong Kong, had in fact chartered the vessel.
The Claimants arrested two vessels owned by the Respondents, sister ships to the subject vessel, in order to obtain security for their claim in arbitration. The second arrest, in Singapore, was set aside as wrongful on the basis that the Respondents were not the party who would be liable in personam and were not, at the time the cause of action accrued, charterers of the vessel which was the subject of the London proceedings.
The Respondents then argued that the London Tribunal did not have jurisdiction to hear the claim, arguing that the Singapore court's decision had created an estoppel which prevented the Claimants from arguing that the Respondents were in fact the charterers.
Tribunal's findings
The approach to be followed on the issue of estoppel was that set down in The Sennar (No.2) [1985] 1 Lloyd's Rep 521. Three requirements had to be satisfied:
- The judgment in the earlier action must be (a) of a court of competent jurisdiction, (b) final and conclusive and (c) on the merits.
- The parties in the earlier action, and those in the later action in which the estoppel is raised as a bar, must be the same.
- The issue in the later action must be the same issue as that decided by the judgment in the earlier action.
On the basis of the facts, the Tribunal found that each of these requirements was satisfied. The Singapore court's decision did give rise to an issue of estoppel to the effect that the Respondents were not charterers under the fixture which was the subject of the arbitration, and so the Tribunal had no jurisdiction to hear the claim.
Comment
This decision highlights the importance of identifying contractual counterparts, and ensuring that claims are brought against the correct party. The Claimants in this case will have incurred significant legal costs, only to find that they were unable to pursue their claim against the Respondents. The time spent in pursuing the incorrect party may mean that time bars run out as against the correct party, leaving a party with a claim but no prospect of recovery.
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