Inability to present case

Compania Sud-Americana De Vapores SA v Nippon Yusen Kaisha [2009] EWHC 1606 (Comm) is one of the rare cases in which a claimant has made out a case under s68(2)(a) of the Arbitration Act 1996 that the arbitrators failed to act fairly. The allegation here was that the defendant had been permitted at a late stage in the arbitration to raise an argument which had earlier been abandoned and which the claimant had no chance to rebut. However, Mr Justice Beatson ultimately dismissed the appeal on the ground that the serious irregularity had not resulted in substantial injustice.

CSAV: the facts

In 1993 the Good Hope Express (GEX) agreement, establishing a joint container service between the Far East and South America, was entered into by five companies including CSAV and NYK. The three other companies had all withdrawn by 2002 and, in March 2003, CSAV and NYK entered into a further agreement – SGEX – with a new partner, KHL. In fact, SGEX began operating some seven months earlier. KHL, whose performance proved to be unsatisfactory, was taken over by HS with effect from the beginning of April 2003, but neither CSAV nor NYK wanted HS to step into KHL’s shoes, and on 7 April 2003 they served termination notices on KHL. NYK purported to terminate by giving 90 days’ notice (under clause 2.1), and also by relying on KHL’s insolvency or change of control (under clause 11). CSAV relied solely on clause 11.