Emirates Shipping Line DMCEST v Gold Star Line Ltd [2023] EWHC 880 (Comm)

Mrs Justice Dias has handed down judgment in this challenge to an arbitration award on jurisdiction under s.67 of the Arbitration Act 1996. Rebecca Jacobs acted (as sole counsel) for the successful defendant.

The “deceptively short” point on the application was whether the Claimant was party to a contract, the 2018 Memorandum of Understanding (the “2018 MOU”), such that it could rely upon the arbitration agreement contained within it. The tribunal had found that the Claimant had not established that it was a party to the 2018 MOU such that it had no jurisdiction. As is a topical issue, however, s.67 appeals presently proceed by way of a full rehearing rather than a review of the arbitrators’ decision. In this case, this meant that the Claimant advanced arguments that it did not advance before the tribunal; evidence was adduced that was not before the tribunal; and oral evidence was heard.

The 2018 MOU is a vessel sharing agreement by which several shipping lines operate a container service in India and the Far East. Each line that contributes a vessel to the service has, in turn, an allocation of slots on the other vessels in the service. Slots could also be chartered by third parties. At the time of the relevant events, the Claimant was a user of slots on a cycle of the service; it had also agreed that it would itself provide a vessel to the service from the next cycle. The Claimant was not a named party to the 2018 MOU, though it was a named party to a subsequent agreement, the 2020 MOU.

The Claimant argued that there was an express agreement between the parties that the Claimant be a party to the 2018 MOU; alternatively, that there was an implied contract on the terms of the 2018 MOU; alternatively, that the Defendant was estopped, by way of a promissory estoppel or an estoppel by convention or an equitable duty to speak, from denying that the Claimant was a party to the 2018 MOU.

The Defendant argued that there was no agreement that the Claimant be a party to the 2018 MOU. At the relevant time, the Claimant had simply purchased slots on the service as third party; it was agreed that the Claimant would join the MOU, but it was not to, and did not, do so until a future date. There was no intention that the terms of the 2018 MOU would apply to the slot purchase agreement, still less that the arbitration clause in the 2018 MOU would apply. As to estoppel, an estoppel was being used to create a cause of action, which was impermissible, but in any event the requirements of none of the species of estoppel relied upon were met.

Mrs Justice Dias accepted the Defendant’s submissions.  She held that, at the relevant time, the Claimant was not yet a party to the MOU: the contract between the parties, under which it had taken slots on the vessels in the service, was one for the purchase of slots by the Claimant as third party. That contract was not on the terms of the 2018 MOU, either expressly or impliedly, and there nothing to suggest that the parties intended the arbitration clause in the 2018 MOU to apply to it in circumstances where the 2018 MOU itself was not applicable.

As to estoppel, Mrs Justice Dias considered that the cause of action argument advanced by the Defendant was a “powerful” one, but she did not accept that an estoppel was being used to create a cause of action in this case. This did not matter, however, as none of the estoppels relied upon could be established: there was no relevant promise for the purposes of a promissory estoppel; there was no assumption of responsibility for the purposes of an estoppel by convention; there was no reliance or unconscionability; and no duty to speak arose in the context of this case.

Accordingly, the Tribunal had no jurisdiction and the Claimant’s s.67 application failed.

Rebecca was instructed by Andreas Welz and Holly Mayne of Mills & Co.

Please click here to view a copy of the Judgment.