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The recent case of Nestor Maritime Sa v Sea Anchor Shipping
Co. Ltd [2012] will be welcomed by users of London arbitration
as it demonstrates once again the English court's determination
to ensure that arbitration awards are final and immediately
enforceable unless there are compelling reasons why that should not
be so.
In Sea Anchor, the dispute concerned the sale of a
Panamax tanker on the strength of a CAP1 rating that turned out to
have been fraudulently procured by the sellers. The resulting
dispute was heard by an LMAA tribunal who unanimously found the
sellers guilty of fraud. The sellers took objection to the finding
that they had behaved dishonestly and sought to challenge the
award. All of the seller's initial challenges were summarily
dismissed.
The arbitration rules state that parties wishing to contest an
award must do so within 28 days of the publication of the award,
unless the court gives permission otherwise. Exceptionally, the
sellers brought a s.68 challenge (on the grounds of "serious
irregularity") just before the hearing of their initial
challenges. This later challenge, accusing the buyers of obtaining
the award on the basis of fraudulent evidence, was brought over
eight months after the award had been published. Where one party
makes very serious allegations of fraud, the starting point for any
court is that the witnesses are telling the truth, and so the
allegations should not be dismissed on a procedural technicality,
such as being submitted out of time. Permission is accordingly
often given in these circumstances. However, in this case, the
judge refused to take that shortcut, dealing with the application
in detail and dismissing it on four separate grounds. Therefore,
the Sea Anchor case demonstrates the English Commercial
Court's commitment to upholding arbitration awards, and the
parties' legitimate expectations that they should be final and
enforceable unless something has gone seriously wrong.
For a more detailed analysis of the case, please see our full
update by clicking
here.
Clyde & Co acted for the successful buyers in this case.
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