14/03/2020

Midnight Marine Ltd & Another v Thomas Miller Speciality Underwriting Agency Ltd (The “Labhauler”)

Midnight Marine Ltd & Another v Thomas Miller Speciality Underwriting Agency Ltd (The “Labhauler”) [2018] EWHC 3431 [2019] 1 Lloyd’s Rep 399 [2018] 12 WLUK 157

Summary

The Court recommended additional procedures to dispose of hopeless arbitration applications:

• Applications for permission to appeal to the Court of Appeal in respect of paper refusals of s69 permission should be dealt with on paper by the Judge who refused permission.
• Where a s68 appeal is dismissed on paper, an oral hearing of an application to set aside that dismissal should be heard by the same Judge who dealt with the matter on paper, should be no more than 30 minutes, should not be attended by the respondent and should require only one succinct additional document to be served.

Background

The claimant’s s68 and s69 applications were dismissed on paper by Mr Justice Butcher. The Claimant sought (1) an oral hearing of its application to set aside the s68 dismissal and (2) permission to appeal to the Court of Appeal against the refusal of s69 permission.

An oral hearing took place before the then Mr Justice Males at which argument was as full as it would have been at the s68 application itself. The parties incurred costs of over £150,000.

Decision

The Judge recommended procedures to dispose of unmeritorious challenges quickly and cheaply; “The importance of arbitral finality is well known and the court is required by section 1(a) of the 1996 Act to have regard to the need to avoid unnecessary delay and expense.” [36]

The Judge clarified that CCG §O8.5 “is intended to be a summary procedure for identifying and disposing economically and promptly of hopeless applications” and should not lead to a major escalation in costs [3]. In a passage referred to – with implied approval – by the Court of Appeal (Minister of Finance v IPIC [2019] EWCA Civ 2080 at [41]), the Judge held that, in the general run, these hearings should be:

• No more than 30 minutes.
• Listed before the Judge who dismissed the application on paper.
• Preceded only by written submissions from the applicant which explain succinctly what was wrong with the Judge’s reasons for the dismissal.
• Attended only by the applicant.

Further, applications for leave to appeal to the Court of Appeal in s69 applications should be dealt with on paper by the judge who refused the application [40].

Comment

Arbitration applications are frequently mere attempts by the losing party to put off the day of reckoning. As Sir Jeremy Cooke, at §41 of Asset Management v Qatar National Bank [2018] EWHC 2218, pointed out, oral hearings ensure that a party’s position can be advanced and tested in a manner not always so readily achieved on paper. However, the requirement to determine challenges to awards promptly and economically means that limits should be placed on them. These robust new approaches are eminently sensible steps to keep the golden goose of London arbitration alive and in good feather.