BTC Bulk Transport Corporation v Glencore International AG [2006] EWHC 1957 (Comm)

[2006] EWHC 1957 (Comm)Case No. 2006 folio 155
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of JusticeDate Friday, 16 th June 2006
Before
MR. JUSTICE COOKEB E T W E E N:
Between
BTC BULK TRANSPORT CORPORATIONClaimantGLENCORE INTERNATIONAL AGDefendant
Transcribed by BEVERLEY F. NUNNERY & COOfficial Shorthand Writers and Tape TranscribersQuality House, Quality Court, Chancery Lane, London WC2A 1HPTel: 020 7831 5627 Fax: 020 7831 7737
MR. N. COOPER (instructed by Barlow Lyde & Gilbert) appeared for Claimant.MR. R. ASWANI (instructed by Swinnerton & Moore) appeared for Defendant.

J U D G M E N T (As approved by the Judge)

[1]This is an application for an order under s.68 of the Arbitration Act 1996, to which I shall refer as “the 1996 Act”. It is an application for the second final arbitration award of Mr. Alan Burbidge and Mr. William Packard, dated 2nd February 2006, to be set aside and/or remitted to the arbitrators for reconsideration. There was originally an application for permission to appeal under s.69 of the 1996 Act but that is no longer pursued because it is recognised that in circumstances, to which I shall refer later, open reasons were not asked for by either of the parties from the arbitrators and, by virtue of the LMAA rules, were therefore not given. This has the result that under s.69(1) of the 1996 Act the court’s jurisdiction to determine an appeal on a point of law arising out of the award is excluded.[2]As is, or at least was, the common practice at one time, the award itself contains no reasons but in a separate document reasons were given for the benefit of the parties. The note at the head reads thus:
“These reasons are confidential to the parties and do not form part of the award. They are issued after its publication and given on the understanding that no use shall be made of them in any proceedings which may be taken on or in connection with the award”
. There is, however, authority that reference to such reasons can be made so far as a s.68 application is concerned in order to determine whether or not there has been a serious irregularity within the meaning of that section.[3]The essence of the allegation under s.68 of the 1996 Act is that there was a serious irregularity in these arbitration proceedings inasmuch as the arbitrators acted in breach of the duty placed upon them under s.33 of the 1996 Act. What is said is that the arbitrators proceeded to a final award, determining the respondent’s (that is Glencore) counterclaim when the only application before them was the claimant’s (that is BTC) application to dismiss the counterclaim on the ground that Glencore had indicated that it intended to submit no further evidence in support of that counterclaim and that the evidence submitted was insufficient to enable Glencore to succeed upon it. Alternatively it is said that BTC had informed the arbitrators in correspondence that if the arbitrators dismissed BTC’s application then BTC would wish to adduce further evidence and make further submissions, whether in writing or orally, in support of its defence to the counterclaim. As a further alternative it is said that the arbitrators failed to inform BTC that they would be proceeding to a final determination of the counterclaim or to give BTC an opportunity to put in further evidence or to make further submissions to them.[4]For the sake of completeness I refer to the terms of s.33 of the 1996 Act, which provides that the tribunal shall:
“(a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and (b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined”
. In ss.(2) of s.33 the following appears:
“The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it”. (2). Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant”
. Amongst the various subsections, (a) provides for a failure by the tribunal to comply with s.33 referred to as the “general duty of the tribunal”.[5]There are a number of authorities in which the application of s.68 has been the subject of discussion. In ‘The Petro Ranger’ [2001] 2 Lloyd’s Reports 348 Mr. Justice Cresswell, at p.351, said that s.68 is designed as a longstop only available in extreme cases where the tribunal has gone so wrong in its conduct of the arbitration in one of the respects listed in s.68 that justice calls out for it to be corrected. I bear that very much in mind in the context of this application.[6]In order to determine the issues before me it is necessary to set out the history of the matter, so far as the proceedings before the arbitrators are concerned. This was an arbitration which proceeded on the basis of documents alone and there were a large number of written submissions made by the parties to the arbitrators, as is not uncommon in matters of this kind. Original claim, defence and reply submissions were made to the arbitrators which led to a first interim award in relation to a freight claim made by BTC, who were disponent owners, against their charterers, Glencore. Because of the terms of the freight clause there was room for deduction in respect of despatch claims and the arbitrators made an interim award in respect of what they saw as undisputed freight, taking into account the claims made in relation to despatch which were disputed. That interim award was made on 15th January 2005. Shortly thereafter, on 21st March 2005, BTC put in a reply and defence to a counterclaim which had been made by Glencore prior to the interim award. That was then followed, on 6th April, by Glencore’s reply to the defence to the counterclaim. The counterclaim in large part related to a settlement which Glencore had made with their buyers, which was alleged to be the result of BTC’s breach of charter in providing an unseaworthy ship. This, it was said, had led to delays on the voyage and to various problems in relation to the cargo, to congestion at the discharging port and to discharging difficulties which gave rise to a claim on the part of Glencore’s buyers of the cargo, which Glencore then settled. Glencore had contracted with its buyers on a C and F free out basis in relation to the cargo of wheat in question.[7]On 1st June 2005 two things happened. First of all, the tribunal wrote to both Glencore and BTC’s solicitors saying that unless they heard anything further from BTC’s solicitors, the tribunal would consider itself to be free to proceed to a final award in the matter. On the same date BTC’s solicitors pointed out to the tribunal, and to Glencore’s solicitors, that Glencore’s counterclaim was for the comparatively substantial sum, as they described it, of $175,000 and that when preparing and serving their submissions, it had been assumed that when submissions were closed the parties would proceed to exchange further relevant documents and any necessary witness or expert evidence before the dispute was determined, following an oral hearing before the tribunal, or perhaps on the basis of documents alone. The letter purported to reserve BTC’s right to produce further evidence and to make further submissions in due course. The letter stated that not only were such rights reserved but that in an attempt to avoid incurring unnecessary further costs “we first wish to request an award from the tribunal on a summary basis striking out Glencore’s counterclaim as they have failed to meet even the most basic burden of proof”. The point taken was, that whatever the position with regard to unseaworthiness and lack of due diligence, even if found liable in principle to Glencore, Glencore could only succeed with the counterclaim against BTC if it could also prove on the balance of probabilities that it had a liability to its buyer as a consequence of BTC’s breaches and that it had reasonably mitigated its loss by settling the claim for $175,000. In order to have any prospect of satisfying that burden of proof it was submitted that Glencore would have to produce evidence of the contractual obligations owed to its buyers and details of how the claim arose against Glencore from those buyers.[8]Having made various points about the inadequacy of the evidence produced in support of the settlement, BTC went on to say that it would be unreasonable and unnecessary to require BTC to incur further cost defending a counterclaim which had no prospect of success. It was then said: “We therefore respectfully request the tribunal to issue an interim final award dismissing Glencore’s counterclaim and ordering Glencore to pay BTC’s costs to be assessed by the tribunal if not agreed. We reserve BTC’s right to make further submissions in support of the outstanding balance of their claim for freight if they wish to do so when this application has been determined by the tribunal. As mentioned above, we also reserve BTC’s right to produce further evidence and to make further submissions in the event that the tribunal does not consider it appropriate to dismiss the counterclaim at this stage”.[9]The response of Glencore, through its solicitors, on 3rd June was to say that it would be opposing the application to strike out the counterclaim. However, in the light of the submissions that had been made, it was said that it had asked its clients to investigate whether there were any further documents and that it was therefore hoped to revert to the tribunal in the near future. This was followed, some six weeks or so later, on 18th July 2005 with Glencore’s further submissions. It is clear from para.2 of those submissions that Glencore considered that it was then dealing with a “no case to answer” application made by BTC. There are various matters in those submissions to which I shall later make reference, but one of the main points taken was that Glencore had been liable to its buyer under s.32(2) of the Sale of Goods Act in as much as it had not made a contract which was reasonable in the circumstances. It was said that a charter party should have been concluded for a vessel which could, having loaded a full cargo, sail direct from the load port to the discharge port, rather than engage on a stop/start series of passages taking an inordinate length of time to complete the voyage, which is actually what happened. It was submitted, at para.3.7, that in fixing a defective carrying vessel Glencore had been in breach of its duty to its buyer and had therefore settled the matter reasonably, and that “liability” was established in relation to BTC who had provided an unseaworthy ship.[10]The next stage in the saga was the service by BTC of further submissions on 13th September. These submissions were “in support of BTC’s application for an interim final award dismissing Glencore’s counterclaim”. In those submissions the first paragraph refers to them as submissions in response to Glencore’s submissions opposing the application contained in BTC’s solicitor’s fax of 1st June 2005 for an interim final award dismissing Glencore’s counterclaim. In the last paragraph, there was once again a reservation of BTC’s rights to make further submissions in support of the outstanding balance of the claim for freight and the right to produce further evidence and make further submissions in the event that the tribunal did not consider it appropriate to dismiss the counterclaim at that stage.[11]On 19th September Glencore’s solicitors sent their reply submissions and maintained that it had been in breach of s.32(2) of the Sale of Goods Act. In the covering letter Glencore’s solicitors said that there should be no further submissions thereafter and that the matter should “proceed to the award of the tribunal”. The tribunal, on 20th September, then wrote to both parties’ solicitors stating that no new issues had been raised in Glencore’s solicitor’s latest message, so that the tribunal considered submissions to be closed. They then continued with these words:
“We will proceed to our award in this reference as soon as possible and advise the parties once our award has been published and is available for collection”
. Reliance is placed upon these words by Glencore on the basis that anyone reading them ought to have appreciated that the reference to “an award in this reference” was unlikely to be a reference to an interim award of the kind which BTC was seeking, but was plainly a reference to a final award on all the matters which were in dispute between the parties and which were the subject of the arbitration.[12]There was then some debate between the parties’ solicitors as to who should have the last word by way of submissions to the tribunal. On 20th September BTC’s solicitors made various points about this and expressly referred to their client’s application for an interim final award dismissing the counterclaim as made in their original request to the tribunal of 1st June. It was said, therefore, that, because it was BTC’s application, BTC should have the last word. There then, in fact, followed more submissions from BTC and from Glencore, BTC’s submissions once again making it plain that these were “brief final submissions” in support of its application for an interim final award dismissing Glencore’s counterclaim, whilst Glencore’s submissions, on 4th October, were written in response to that and maintained that as claimants on the counterclaim Glencore was entitled to the last word. In a letter to the tribunal of 4th October, Glencore’s solicitors asked for a direction that there be no further submissions and that the tribunal should proceed to their award. The arbitrators then wrote to both sets of solicitors confirming safe receipt of that letter of 4th October and the closing submissions on behalf of Glencore, and said that it would now proceed to its award and advise the parties as soon as it was published. I should have said that on 21st September the tribunal had previously ordered that each party should have its “final say” but that BTC should have its final say by 26th September with closing words from Glencore as soon as possible thereafter. The arbitrators’ award was issued on 2nd February 2006.[13]With that background, Glencore argues that there has been no irregularity, certainly no serious irregularity, and no substantial injustice. What is said first is that there was no order for directions or order of the kind that is made in a case management conference, saying that the tribunal would accede to the request for a summary judgment application of the kind which BTC wished to pursue. Secondly, it is said that Glencore always maintained that there was no need to deal with the counterclaim on a summary relief basis and objected to the tribunal proceeding in that manner. Thirdly, it is said that after BTC had made its application, Glencore investigated questions of further evidence and obtained further evidence and made further submissions. That is undoubtedly true. It resulted in the production of the sales agreement between Glencore and its buyers and two statements from representatives of Glencore justifying the settlement which had been reached. Fourthly, it is said that the issue relating to who should have the last word was a clear pointer that the arbitrators had decided that the full merits of the counterclaim would be dealt with finally, rather than simply the application to dismiss it. If they had been dealing simply with an application on behalf of BTC to dismiss Glencore’s counterclaim then it is obvious, says Glencore, that BTC would have been given the last word whereas in fact the last word was given to Glencore. Lastly, but with I think less force than any of these other points, it was submitted that the scale of the fees and the process of collection of the award, gave some indication that the award could not have been limited to summary judgment in the manner which BTC says it contemplated.[14]I have had the benefit of two witness statements from Mr. Flaherty, on behalf of BTC, and one from Mr. Moore on behalf of Glencore. From the evidence and the documents which have been exhibited, the following is clear: First, BTC asked for its application to dismiss the counterclaim to be determined; second, it reserved the right to produce more evidence should that be determined against it and to make further submissions in relation to the counterclaim which was being pursued by Glencore; third, the responses from Glencore, when read objectively, show no clear invitation to the tribunal to decide the counterclaim once and for all, and to ignore the application made for dismissal of that counterclaim on a summary basis; fourthly, more importantly, the tribunal never said that they would determine the counterclaim finally; fifthly, the tribunal, in my judgment, on the basis of all those exchanges, should have been aware that BTC was proceeding on the basis outlined in its application of 1st June. The tribunal never told BTC to put forward all its evidence and submissions once and for all for the purposes of the award that they were about to make. Sixthly, whilst it is true to say that the tribunal decided that Glencore should have the last word, and some of the language used by them carried more of the flavour of moving to a final award than an interim final award, the tenor of the correspondence from BTC clearly shows its understanding that it was to be, in one sense, a “no lose” application from its standpoint. What it thought was being decided, and it is plain from the correspondence that this is what it thought was going to be decided, was the determination whether the counterclaim stood an arguable chance of success or should be dismissed at that stage without further evidence and submissions on its part. If it was found that the counterclaim stood an arguable chance of success then BTC would have considered the matter further and addressed further argument and perhaps obtained further evidence in relation to the points at issue, particularly in relation to the settlement between Glencore and its buyers.[15]I am satisfied that there was an irregularity, and indeed a serious irregularity, inasmuch as the tribunal were in breach of s.33 of the 1996 Act and did not proceed in a fair manner in these circumstances. That is a matter which falls fairly and squarely within s.68 and, in my judgment, it was not only an irregularity but a serious irregularity.[16]The notion of serious irregularity is, in fact, connected with the question of substantial injustice. Serious irregularity means an irregularity which has caused or will cause substantial injustice as s.68(2) of the 1996 Act sets out. Once again I make reference to ‘The Petro Ranger’ and in this case to para.4 at p.351, where in quoting from the Departmental Advisory Committee on Arbitration Laws Report on the Arbitration Bill, Mr. Justice Cresswell states that the test of substantial injustice is intended to be applied by way of support for the arbitral process and not by way of interference with the process. Thus it is only in those cases where it can be said that what has happened is so far removed from what could reasonably be expected of the arbitral process that the court will take action. It is, in my judgment, the position here that what did take place was so far removed from what could be expected of the arbitral process that the court should interfere. Where one party is expecting a hearing to take place on one basis and that expectation and understanding is, or should have been, clear to the tribunal and to the solicitors on the other side, it is a substantial injustice for the hearing to take place on an altogether different basis.[17]I was referred to a number of other authorities, including Lesotho Highlands Development Authority v Impregilo SPA [2006] 1 AC 221 and to the high threshold which has to be satisfied in relation to s.68 applications as set out by their Lordships, and in particular by Lord Steyn. I was also referred to Vee Networks v Econet Wireless International Ltd [2005] 1 Lloyd’s Reports 192 and, in particular, to paras.88-90 where Mr. Justice Colman dealt with the question of irregularity of procedure. In so doing he said this:
“Where there has been an irregularity of procedure, it is enough if it is shown that it caused the arbitrator to reach a conclusion unfavourable to the applicant which, but for the irregularity, he might well never have reached, provided always that the opposite conclusion is at least reasonably arguable. Above all it is not normally appropriate for the court to try the material issue in order to ascertain whether a substantial injustice has been caused. To do so would be an entirely inappropriate inroad into the autonomy of the arbitral process”
. My attention was drawn to a number of authorities which draw a clear distinction between the jurisdiction of the court under s.68 and that under s.69. A fair warning was given that I should not, in exercising my s.68 jurisdiction, encroach upon the points of law which might have given rise to a s.69 jurisdiction had that jurisdiction not been excluded for the reasons that I have already given.[18]Nonetheless, at paras.88-90 of Mr. Justice Colman’s decision he refers to the need for the establishment of substantial injustice to show that the position adopted by the applicant is at least reasonably arguable in the context of the underlying arguments which were being pursued. It cannot be said that a party has suffered substantial injustice if the effect of the procedural irregularity is only to deprive him of making a point which could on no basis ultimately succeed. Here Glencore says that there was no substantial injustice because the arguments which were advanced in the written submissions, which have been put before this court, being the submissions which were put before the arbitrators, are hopeless. In particular it is said that those arguments in relation to the lack of unseaworthiness of the vessel and the exercise of due diligence could not possibly have succeeded. In this context Glencore points to the absence of any material put forward by BTC as to what evidence or submissions it could have adduced or brought before the tribunal to counter the evidence that had been put before the arbitrators by Glencore. Glencore specifically refers to its evidence of unseaworthiness in the shape of a contemporaneous report of Tech Nautic and points out the difficulties in the way of BTC establishing due diligence in circumstances where it was a disponent owner. The history of work done and ordering of spare parts at the load port, some of which were delivered at intervening ports en route and gave rise to repair there, clearly demonstrates, it is said, the ultimate owner’s lack of such due diligence. Moreover, the ship has since been sold at least once and I think there is reference elsewhere to further on sales also.[19]Whilst I am inclined to think that there is a great deal of force in those points and I would not have given much for BTC’s prospects of doing anything further in relation to those areas of dispute, issues arise not on liability but on causation of damage, which, in my judgment, are not hopeless and which could have been the subject of a s.69 application if the court had jurisdiction to entertain it.[20]At para.17 of Mr. Flaherty’s second witness statement he says that:
“The claimant did not seek a reasoned award because it expected, and had been led to believe by the correspondence from the tribunal, that the award was only going to deal with its interlocutory strike out application”
. That evidence was not challenged and the logic of the position is clear, notwithstanding the attack made upon it by Glencore’s counsel. On what amounts to a summary judgment application in an arbitration, although reasons could be sought in relation to any point of law which arose in that context, a party who could not finally lose the arbitration on such an application is very unlikely to seek reasons or feel the need to reserve the possibility of appeal. In those circumstances that party considers that he is going to have a further bite at the cherry should his application before the arbitrators fail, because the matter will come back for a full hearing at a later date. It would then be possible to seek reasons and, if a point of law arose, to launch an application to the court for permission to appeal on that basis.[21]The substantial injustice caused here, in my judgment, takes two forms. First, BTC were deprived of the right to re-argue a point which arose in relation to s.32(2) of the Sale of Goods Act. If this had been merely an interim application which was dismissed BTC would have been able to ask the tribunal for the opportunity to address the tribunal on that issue at an oral hearing, if so required, and with counsel, if so required. That would have been an opportunity to persuade the arbitrators that their view of the section, as expressed in the reasons for the award, was manifestly wrong. Other matters in relation to the settlement might also have arisen and the possibility of cross- examining the two witnesses whose statements had been put before the tribunal would also have been available. The second area of injustice arises from the deprivation of BTC of its right to seek permission to appeal on the points which arose in relation to the settlement between Glencore and its buyers in relation to the s.32(2) argument. On the basis of Mr. Flaherty’s evidence, if BTC had been aware that the matter was proceeding to a final award without further opportunity for submissions or evidence, it would have sought reasons which would have enabled it to seek permission to appeal.[22]I need not go into the basis of the s.32(2) argument in any great detail. For these purposes it is sufficient merely to draw attention to the manner in which it arose. According to the reasons, Glencore claimed that the voyage should have been completed in about 21.5 days but in fact the duration of the voyage was 69.2 days thereby giving rise to a delay of some 47.7 days. In consequence of this, when the ship arrived at Buenaventura, the store facilities for receiving bulk grain were already full from a previous ship resulting in the cargo receivers, who were Glencore’s buyers, having to find alternative methods of discharge and storage of the cargo. In consequence they sought compensation from Glencore which led to the settlement of $175,000.[23]The validity of the settlement agreement reached by Glencore was contested by BTC on the ground that the payment was an ex gratia payment and that Glencore had no liability to their buyers at all for the vessel’s failures and therefore no basis for any settlement with them, whether to the tune of $175,000 or at all. Whether or not the ship was unseaworthy and there was lack of due diligence, it was said that there was simply no liability on the part of Glencore to their buyers and this was the basis upon which the application was made for summary dismissal of the counterclaim. In response to that Glencore submitted that all that had happened had arisen as a result of the lack of seaworthiness of the vessel and the lack of due diligence to make the vessel seaworthy and that, therefore, the need for the settlement which was concluded with their buyers was the result of BTC’s breach of charter. In so saying reliance was placed upon s.32(2) which essentially provides that the sellers must make a reasonable contract with the carrier on behalf of the buyer having regard to the nature of the goods. As explained in the tribunal’s reasons: “The ship’s performance of the voyage was so much below the standard to be expected under normal circumstances as to render the seller (Glencore) liable to the buyer for loss and/or damages. Put another way, the question is whether the eventual performance of this voyage could have been within the contemplation of the parties at the time of fixing the charter. Patently it could not have been within Glencore’s contemplation, for it is beyond normal expectation for a 21 day voyage to actually take 69 days, even for a ship that has experienced engine difficulties on the previous voyage. Whether or not it was within BTC’s contemplation is not the issue. They were responsible under the charter party to Glencore, even though the vessel’s head owners were in a better position to know the full extent of the existing defects and what/when replacement parts were needed, or indeed what further parts might be needed in case even further problems occurred, as they did. It seems to us that a charterer is, or should be, entitled to expect a ship chartered on a voyage basis to perform that voyage within a reasonable period of time, always allowing for possible delays due to unforeseeable circumstances such as bad weather which are beyond either party’s control … In our experience such delay was far from normal, even in the trading of bulk carriers where the delivery time of cargo is usually not so critical as, for example, container ships or reefer ships. It is our view, on the balance of probability, that Glencore were, because of BTC’s breach, themselves in breach towards the buyer because of the inordinately late arrival of the ship at Buenaventura, whereby storage facilities planned for middle March were no longer available, having been utilised by another vessel’s arrival in the meantime, and discharging facilities similarly strained. In the circumstances we are not persuaded that Glencore’s settlement agreement with their buyer was unreasonable or premature … The authorities referred to us by BTC were not particularly helpful, nor was their suggestion that the Sale of Goods Act 1979 applied to goods ‘lost or damaged’ and not to late delivery. It seemed to us that this case turned simply on what is made clear in Halsbury’s ‘Laws of England’, namely that the unseaworthiness of the ship (or lack of due diligence in this respect) resulted in Glencore’s contract with the carrier on behalf of the buyer becoming unreasonable having regard to the nature of the goods. Therefore we found that Glencore received a legitimate claim from their buyers, that the settlement agreement was reasonable, and that Glencore’s claim in this respect succeeds”.[24]BTC maintained that these paragraphs from the arbitrators’ reasons showed a misunderstanding of the effect of s.32(2). The arguments that BTC puts forward in this context appear in para.22-27 of the skeleton argument which was put before me and to which I make reference without setting out either the terms of it or the authorities upon which it relies. It is worth pointing out that in the arbitration there was no suggestion that either the terms or the nature of the charter were in any way unreasonable, that the charter was on a standard grain voyage charter form, and that bills of lading were issued in ordinary form, in the ordinary way, to safeguard the buyers’ rights against the head owners of the ship. Nor was there anything in the evidence to suggest that the choice made by Glencore of the carrier was an unreasonable choice, nor that the choice of the ship was unreasonable when it was made although there are some references in the documents to Glencore’s knowledge of prior problems with the vessel’s condition. In its own submissions of 18th July, at para.3.10 and 3.11, Glencore admitted that it had, prior to the fixture, chartered the vessel and that during the charter party the vessel’s performance had been poor. It also stated that any knowledge which it had about the poor condition of the vessel would have prejudiced its defence of a claim by the buyers but did not override the obligation of BTC to tender a vessel which was seaworthy or in respect of which BTC had the obligation to use due diligence to make it seaworthy.[25]In the arbitrators’ reasons the arbitrators said, in words that I have already recited, that it was not within Glencore’s contemplation for this voyage to take 69 days instead of 21 days. On the face of the reasons, it therefore appears that the arbitrators did not regard Glencore as having knowledge that the vessel was unseaworthy at the time of fixing the charter. Their conclusion appears to have been based upon the performance of the voyage rather than on the position as at the time when Glencore entered into the commitment to the charter.[26]The points made by BTC at paras.22-27 of their skeleton argument are not by any means hopeless. They have, in my judgment, real force. It is said that s.32(2) imposes a duty on the seller only to take the usual and ordinary precautions to secure the responsibility of the carrier to the buyer for the safe delivery of the goods, and that there is no basis for looking to later events after the contract had been concluded to make the contract an unreasonable contract. I have not had the benefit of full argument on those points and it would not be right for me to express any conclusion about it in the context of a s.68 application for all the reasons that I have already given. Nonetheless, as I say, it does fall to me to decide that the point is not hopeless and that is something that I do decide. Without the benefit of full argument, the points appear to have a considerable degree of force. I have little doubt that permission to appeal would have been given on this point if it had been open to the court to do so and a s.69 application had been pursued, which in the circumstances, and for the reasons given, because of the irregularity which I have found, it was not open to BTC to do.[27]For these reasons I therefore accept BTC’s application and order that the matter be remitted to the tribunal for reconsideration.

LATER:

[28]I have to determine the issue of costs in relation to the application that I have just heard. There were originally two applications, a s.68 application and a s.69 application, but the s.69 application was abandoned and Mr. Aswani has not therefore had to deal with it and indeed told me that he was not fully prepared to deal with it. Nonetheless there must be some element of wasted costs in relation to the s.69 application, whether on the part of Mr. Moore alone or indeed in some measure for Mr. Aswani.[29]In those circumstances it seems to me that there ought to be, as a matter of theory, some sum which would be recoverable by Glencore in relation to the s.69 application which has been abandoned, albeit that it had some relevance in relation to the s.68 application because of the argument about the hopelessness of the points to be raised by way of any potential appeal of which the irregularity deprived BTC. So I bear that in mind, but it is much more sensible in the context of a case like this, where a summary assessment of costs is being made, to come to a net figure in relation to the s.68 application, where BTC are entitled to their costs after a deduction of an appropriate amount in relation to the s.69 application where some sum must be due to Glencore.[30]Criticisms are made in relation to BTC’s bill. First, in relation to the amount of time spent by the various individuals engaged at Barlows. In particular, objection is taken to the time spent as attendance on opponents which is, I think, almost twice as much as the time which Mr. Moore contends was spent in such an activity. No objection is taken to the hourly rates but objection is taken to the overall time spent, to time in relation to bundles, which were put together back to front. I say that rather pejoratively but a number of the documents appeared in the wrong chronological order, starting with the earliest date at the back and the latest date at the front. There was also criticism made of two people being present at the hearing where one would have done. These are all matters that I take into account and, in particular, criticism was made, somewhat unusually in my experience, of counsel’s fees. There is a significant difference between the call dates of the two counsel involved. I would say at once that Mr. Aswani has done everything that could possibly be expected of him and is a snip at the price which has been charged for him. In truth it is not possible to make a comparison between his fee on the one hand and Mr. Cooper’s fee on the other, because I do regard Mr. Aswani’s fee as really very much too low for the work he has had to deal with.[31]Without making any division in respect of each individual criticism that has been advanced, and taking the broad brush approach which this court almost invariably does when faced with bills of this kind, and taking into account the amount to be deducted in respect of the s.69 application, which works the other way, the overall net figure which I will award to BTC in respect of costs of all these applications is a figure of £13,000.

Cited in 5 later judgments