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AA 1996, s 67—consolidating bills of lading arbitration clauses in a letter of undertaking (Lavender Shipmanagment v Ibrahima Sory Affretement Trading SA, M/V ‘Majesty’)

Published on: 22 December 2020
Published by: LexisPSL
  • AA 1996, s 67—consolidating bills of lading arbitration clauses in a letter of undertaking (Lavender Shipmanagment v Ibrahima Sory Affretement Trading SA, M/V ‘Majesty’)
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Arbitration analysis: In a challenge to an arbitral award on jurisdiction pursuant to section 67 of the Arbitration Act 1996 (AA 1996), Mr Justice Calver in the Commercial Court held that a letter of undertaking (LOU), issued to secure claims over a cargo of rice carried under five separate bills of lading, amounted to an agreement requiring a single arbitral tribunal to determine claims under all five bills in one reference. However, the arbitration clauses in the five bills of lading were not replaced entirely—since the LOU did not contain an exhaustive code or refer to any arbitration rules, the court held that it should be read as referring back to the arbitration rules contained in the bills. As such, the claimant’s AA 1996, s 67 challenge failed. The reasoning in this case will warrant close attention from any practitioner dealing with the commencement of cargo claims. Having found in the defendants’ favour on the LOU jurisdiction issue, the court proceeded to consider (and ultimately dismiss) the claimant’s application for permission to appeal the award on a point of law pursuant to AA 1996, s 69. Written by Tom Nixon, barrister at Quadrant Chambers. or take a trial to read the full analysis.

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