Lloyd's Maritime and Commercial Law Quarterly
EXCLUDING APPEALS TO THE COURTS IN MARITIME ARBITRATION
EXCLUDING APPEALS TO THE COURTS IN MARITIME ARBITRATION
Prior to 1979, issues of law arising in English arbitrations were subject to review on the merits by the English courts. The Arbitration Act 1979 made several changes in this area. First, the Act made judicial review discretionary with the court.1 Second, parties were authorized to opt out—i.e., to enter into “exclusion” agreements—waiving judicial review either in a contract arbitration clause before a dispute actually arose, or in a submission agreement after a dispute had materialized.2
However, for trade arbitrations involving maritime, commodities, or insurance matters, “exclusion” of appeal was allowed only in submission agreements and was not valid if contained in, say, a charterparty arbitration clause.3 These prohibitions were originally expected to be temporary and to last only between two and 10 years.4 Three grounds were advanced for them. First, it was feared that opting out, if permitted in advance of a dispute, would be routinely incorporated in printed charter forms, and the inexperienced might then unwittingly surrender their right to judicial review.5 Second, it was said that maritime arbitration appeals had contributed heavily to the development of English law and progress would be slowed without them.6 Finally, some argued that the availability of appeal induced consistency in awards, the absence of which, as in court decisions, would “make it impossible for businessmen to know where they stand, and impossible for their legal advisors to give them helpful advice”.7
None of these arguments have much force. To begin with, the prohibition against opting out of appeal in a charterparty arbitration clause flatly contradicts the principle of party autonomy in arbitration. If there were genuine concern that a novice would somehow be tricked into giving up his right of appeal in the small print of a form contract, the obvious answer would be to require that the exclusion be set forth in a
1. Arbitration Act 1979, s. 1(3)(b). The House of Lords subsequently established guidelines for exercise of such discretion in Pioneer Shipping v. B. T. P. Tioxide (The Nema) [1982] A.C. 724, Antaios Compania Naviera v. Salen (The Antaios) [1985] A.C. 191.
2. Arbitration Act 1979, s. 3(1).
3. Arbitration Act 1979, s. 4(1).
4. Commercial Court Committee, Report on Arbitration, Cmnd. 7824 (1978), 13; Sir J. Donaldson, “Commercial Arbitration—1979 and After” (1983) 11 Int’ I Bus. L. 189, 192.
5. Report on Arbitration, supra, fn. 4, at p. 12; (1978) 39 H.L. Deb. 107 (Lord Diplock).
6. Donaldson, supra, fn. 4, at p. 192; The Nema, supra, fn. 1, at p. 731, per Lord Diplock; Mustill & Boyd, Commercial Arbitration, 2nd edn. (1989), 454.
7. Sir R. Goff, “Commercial Contracts and the Commercial Court”, [1984] LMCLQ 382, 392. See Scandinavia Tanker Trading Co. v. Flota Petrolera Ecuatoriana (The Scaptrade) [1983] 2 A.C. 694, 703–704, per Lord Diplock, aff’g [1983] Q.B. 529, 540–541, per Robert Goff, L.J.; M. J. Mustill, “Distinctive Features of English Commercial Arbitration” (1977) 14 Arkiv for Sjorett 321, 333; M. J. Mustill, “Delays in Arbitration: The Role of the Court”, republished in American Bar Ass’n, Justice for a Generation (1985) 345, 351; Mustill & Boyd, Commercial Arbitration (1982) 406, n.18; J. S. Smid, “London is London”, Fairplay, 25 January 1979, pp. 32, 37.
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