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

1 W.L.R. 1320 (1979)

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

England and Wales High Court of Justice
1 W.L.R. 1320 (1979)

Facts

Termarea S.R.L. (plaintiff) chartered a ship from Rederi Aktiebolaget Sally (Sally) (defendant). Clause 24 of the charter-party agreement, which addressed arbitration, specifically stated that arbitration had to be conducted by a three-person panel. Clause 24 provided that each party would select an arbitrator, and the two selected arbitrators would then appoint the third arbitrator. Clause 24 also provided that a decision was binding if two of the three arbitrators agreed. The ship-charter form established that arbitration proceedings were to be conducted in London, England. Sally initiated arbitration proceedings and appointed J. L. Potter as an arbitrator. Pursuant to other provisions of Clause 24, Sally appointed Donald Davies on behalf of Termarea when Termarea did not meet the deadline for selection. Potter decided not to appoint a third arbitrator. After reviewing submissions from both parties, Potter and Davies issued an award in favor of Sally without ever appointing a third arbitrator. Sally received an ex parte order from the England and Wales High Court of Justice granting leave to enforce the arbitration award. Termarea moved the High Court to set aside the ex parte order on grounds including that the arbitrators lacked jurisdiction and that Potter and Davies did not appoint a third arbitrator.

Rule of Law

Issue

Holding and Reasoning (Mocatta, J.)

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