Dainford Navigation Inc. v PDVSA Petroleo S.A. "Moscow Stars" [2017] EWHC 2150 (Comm) (02 August 2017)

Dainford Navigation Inc. v PDVSA Petroleo S.A. "Moscow Stars" [2017] EWHC 2150 (Comm) (02 August 2017)

The court has power under section 44(2)(d) Arbitration Act 1996 to order sale of the cargo because the exercise of a contractual lien creates a sufficient nexus between the cargo and the arbitration proceedings; there is overwhelming good reason for a quick sale due to prolonged detention, accruing costs, and lack of viable alternatives.

Citation
[2017] EWHC 2150 (Comm)
Parties
Claimant/owner: Dainford Navigation Inc.; Defendant/charterer: PDVSA Petroleo S.A ('MOSCOW STARS')
Jurisdiction
England and Wales
Judgment Date
02 August 2017
Procedural Posture
Arbitration Related Application / Application for Interim Relief (order for Sale of Cargo)
Outcome
Application granted
Legal Topics
Interim Relief Under Arbitration Act 1996, Lien Over Cargo, Sale of Goods Pending Arbitration, Contractual Disputes in Shipping
Arbitration Commercial Law Shipping Law Interim Relief Under Arbitration Act 1996 Lien Over Cargo Sale of Goods Pending Arbitration Contractual Disputes in Shipping

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Parties

Dainford Navigation Inc.

Claimant/owner

PDVSA Petroleo S.A ('MOSCOW STARS')

Defendant/charterer

Procedural Posture

Arbitration Related Application / Application for Interim Relief (order for Sale of Cargo)

Legal Issues

  1. 1 Whether the court has power under section 44(2)(d) Arbitration Act 1996 to order sale of cargo not directly the subject of arbitration
  2. 2 Whether there is 'good reason' to order a quick sale under CPR 25.1(c)(v)
  3. 3 Appropriateness of exercising discretion to order sale depriving owner of goods

Ratio Decidendi

The court has power under section 44(2)(d) Arbitration Act 1996 to order sale of the cargo because the exercise of a contractual lien creates a sufficient nexus between the cargo and the arbitration proceedings; there is overwhelming good reason for a quick sale due to prolonged detention, accruing costs, and lack of viable alternatives.

Court Disposition

Application granted

Orders

  • Order for sale of the cargo on board 'MOSCOW STARS' pursuant to section 44 Arbitration Act 1996
  • Defendant directed to sign any sale contract as seller if required