Lloyd's Maritime and Commercial Law Quarterly
THE CENTROCON ARBITRATION CLAUSE STRIKES AGAIN
An appreciation of the “ASTRAEA” and “EVJE” cases
N. G. Hudson, M.A., Barrister
Member and Past Chairman of the Association of Average Adjusters.
In a decision of significance for the shipping world, the House of Lords in Union of India v. E. B. Aaby’s Rederi A/S (The Evje)
1 has delivered a further judgment affirming the supremacy of the Centrocon arbitration clause over the accepted commercial practices of a century or more. The Centrocon arbitration clause is no newcomer to the ring2, but the far-reaching implications of the built-in time bar had not, previous to these cases, been thought to apply to claims for general average.
The contest began in 1971 with Alma Shipping Corporation v. Union of India (The Astraea).3 Both cases concerned claims brought by shipowners for cargo’s contribution to general average arising in the course of voyages performed under forms of voyage charter-party containing the Centrocon arbitration clause. That clause, so far as relevant, reads:
“All disputes from time to time arising out of this contract shall, unless the parties agree forthwith on a single arbitrator, be referred to the final arbitrament of two arbitrators carrying on business in London, who shall be members of The Baltic and engaged in the shipping and/or grain trades, one to be appointed by each of the parties, with power to such arbitrators to appoint an umpire. Any claim must be made in writing and claimant’s arbitrator appointed within twelve (12) months of final discharge and where this provision is not complied with the claim shall be deemed to be waived and absolutely barred.”
Both charter-parties contained similar clauses relating to the adjustment of general average. In The Astraea the clause read:
“General average, if any, shall be settled in London according to the York-Antwerp Rules [Y.A.R.] 1950.”
1 [1974] 3 W.L.R. 269; [1974] 2 Lloyd’s Rep. 57.
2 “Indeed, the Centrocon arbitration clause seems to be extending its kingdom rapidly these days so that, at the present rate of empire building, it may soon be exceptional to find a charter-party or even a bill of lading into which it has not insinuated itself.” Per Mocatta, J., The Simonburn [1972] 2 Lloyd’s Rep. 355.
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