Occidental Chartering Inc v Progress Bulk Carriers Ltd

Occidental Chartering Inc v Progress Bulk Carriers Ltd

OCI is entitled to recover as damages from PBC the costs awarded against OSC in the head arbitration, as the chain of charterparties was back-to-back, OSC and OCI were treated as one for purposes of passing liability, and paragraph D of the Amending Award reserved jurisdiction for such a claim. There is no requirement for an arbitration award between OSC and OCI to establish liability if it is plain from the charter terms. The arbitrators erred in construing a gap in the chain as fatal to the claim.

Parties
Claimant/disponent Owners: Occidental Chartering Inc; Defendant/charterers: Progress Bulk Carriers Ltd
Jurisdiction
England and Wales
Judgment Date
06 December 2012
Procedural Posture
Commercial Arbitration Appeal / Judgment on Section 69 Arbitration Act 1996 Appeal
Outcome
Appeal allowed; Award varied in favour of OCI
Legal Topics
Chain of Charterparties, Recoverability of Costs as Damages, Interpretation of Arbitral Awards, Functus Officio, Damages for Breach of Safe Port Warranty
Arbitration Commercial Law Shipping Law Chain of Charterparties Recoverability of Costs as Damages Interpretation of Arbitral Awards Functus Officio Damages for Breach of Safe Port Warranty

Case Brief

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Parties

Occidental Chartering Inc

Claimant/disponent Owners

Progress Bulk Carriers Ltd

Defendant/charterers

Procedural Posture

Commercial Arbitration Appeal / Judgment on Section 69 Arbitration Act 1996 Appeal

Legal Issues

  1. 1 Whether OCI can recover as damages from PBC the costs awarded against OSC in the head arbitration with the registered owners
  2. 2 Proper construction of paragraph D of the Amending Award and whether it reserved jurisdiction for such a claim
  3. 3 Whether a gap in the chain of charterparties or references precludes recovery of costs as damages

Ratio Decidendi

OCI is entitled to recover as damages from PBC the costs awarded against OSC in the head arbitration, as the chain of charterparties was back-to-back, OSC and OCI were treated as one for purposes of passing liability, and paragraph D of the Amending Award reserved jurisdiction for such a claim. There is no requirement for an arbitration award between OSC and OCI to establish liability if it is plain from the charter terms. The arbitrators erred in construing a gap in the chain as fatal to the claim.

Court Disposition

Appeal allowed; Award varied in favour of OCI

Orders

  • OCI entitled to recover US$164,352.04 (registered owners' costs in head arbitration)
  • OCI entitled to recover £5,500 (costs of the Award in head arbitration)