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’)

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...