No Right to Declaratory Relief From Court Where Issues Fall Within Scope of Arbitration Agreement

Grimaldi Compagnia Di Navigazione Spa v Sekihyo Lines Ltd (QBD) (Commercial Court)), [1998]AllER 297

Commentary

The case essentially concerns the relationship between Sections 9 and 12 of the Arbitration Act 1996. One of the questions in issue between the parties was whether the time bar under Art. III r.6 of the Hague Rules applied or not. This question properly fell within the scope of the arbitration agreement and the jurisdiction of the arbitral tribunal. The court accordingly stayed the application for a declaration pursuant to Section 9 of the Arbitration Act 1996 but found that its authority to grant an extension of time under Section 12 of the Arbitration Act 1996 as and when necessary was preserved

Decision

The court held that, although there was jurisdiction under Section 12 to deal by way of declaration with the question whether the time bar applied, provided both parties agreed to the court determining an issue which otherwise fell within the jurisdiction of the arbitral tribunal, Section 9 had to be applied if one of the parties invoked the arbitration agreement. Whilst this meant that the application for a declaration had to be stayed, the court nevertheless retained its jurisdiction to grant an extension of time under Section 12 if and when this was appropriate.

Background

The applicant was the charterer of the respondent’s vessel. The contract contained an arbitration clause. In April 1992 the vessel sank and the applicant lost property on board the vessel. In October 1993 the applicant made a claim against the respondent. Correspondence between the parties ensued in 1994 and 1995. The respondent then relied for the first time on the time bar in the Hague Rules. The applicant applied to the court for a declaration that the Hague Rules did not apply or, alternatively, for an extension of time for the commencement of an arbitration.

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