VISCOUS GLOBAL INVESTMENT LTD V PALLADIUM NAVIGATION CORPORATION (THE "QUEST")

[2014] EWHC 2654 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Males, 30 July 2014

Arbitration - Substantive jurisdiction of the tribunal - Damage to cargo of bagged rice - Four bills of lading containing arbitration clause - P&I Club letter of undertaking containing alternative jurisdiction clause - Whether an arbitration clause in LOU intended to replace the arbitration clauses in the four bills of lading - Arbitration Act 1996, section 32

Four bills of lading in respect of a cargo of rice referred to the charterparty arbitration clause. Instead of a designated charterparty, there were three competing charterparties containing two different arbitration clauses, the head charter notably referring to the LMAA Small Claims procedure which required one arbitrator only. The cargo was discharged from the defendant's vessel Quest in a damaged condition and security for the claimant's claim was provided by the defendant shipowner's P&I Club in the form of a single letter of undertaking, containing a different arbitration clause. A single tribunal was constituted for all claims. The question of the tribunal's jurisdiction was referred to the court with permission. The claimant's case was that the LOU's arbitration clause was intended to replace the original clauses in the bills of lading. The defendant's case was that it only amended the original clause, and that the claimant should have commenced arbitration for some claims under the LMAA Small Claims procedure, and for some under the regular LMAA procedure, with the result that claims under US$100,000 were now time-barred.