Rederi Aktiebolaget Sally (Finland) v. S.R.L. Termarea (Italy)

4 Y.B. Comm. Arb. 294 (1979)

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Rederi Aktiebolaget Sally (Finland) v. S.R.L. Termarea (Italy)

Florence Court of Appeal
4 Y.B. Comm. Arb. 294 (1979)

Facts

Rederi Aktiebolaget Sally (Sally) (plaintiff) owned a ship and entered into a charter-party agreement with S.R.L. Termarea (defendant). The agreement named London, England, as the place of arbitration. Clause 24 of the agreement, the arbitration clause, required any disputes to be arbitrated by a panel of three arbitrators. Under Clause 24, each party would appoint an arbitrator, and the third arbitrator would be selected by the two appointed arbitrators. Sally initiated arbitration proceedings in London for damages. Sally and Termarea each appointed one arbitrator pursuant to Clause 24; however, the two appointed arbitrators never selected a third arbitrator. The arbitrators found Termarea liable and ordered it to pay damages to Sally. The arbitrators noted that § 9, paragraph 1 of England’s Arbitration Act 1950 (the act) instructed that any arbitration provision structured like Clause 24 would be understood to call for the appointment an umpire rather than a third arbitrator. The arbitrators stated that because they agreed on the award, the appointment of an umpire was not necessary under the act because the umpire would not have been called on. Termarea refused to pay, and Sally filed an action in Italy to enforce the award.

Rule of Law

Issue

Holding and Reasoning ()

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