Pioneer Shipping Ltd. v. B.T.P. Tioxide Ltd.

A.C. 724 (1982)

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Pioneer Shipping Ltd. v. B.T.P. Tioxide Ltd.

United Kingdom House of Lords
A.C. 724 (1982)

  • Written by Elizabeth Yingling, JD

Facts

The owners (defendants) of the ship Nema chartered the vessel for several voyages. The contract between the parties contained a provision regarding the divisibility of the contract as it related to voyages in different seasons. That provision was unique to contracts that typically contained standard terms. The charterers (plaintiffs) agreed to release the Nema back to the owners when a labor strike in Canada prevented the loading of the Nema for the second voyage. At the end of the second voyage, the labor strike was not resolved, and the owners refused to return the Nema to the charterers. The dispute was submitted to arbitration. The arbitrator ruled that the owners could retain the Nema because the contract’s purpose had been frustrated. Section 1 of the Arbitration Act of 1979 gave judges discretion to grant or refuse leave to appeal an arbitration award. On appeal, the High Court held the contract’s purpose had not been wholly frustrated and allowed the appeal. The Court of Appeal restored the arbitrator’s award and dismissed the appeal. The charterers appealed to the House of Lords.

Rule of Law

Issue

Holding and Reasoning (Diplock, J.)

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