Primetransport Ltd. v. UAB „Metruna“

At a glance

Parties

Primetransport Ltd. (Dubai, United Arab Emirates), applicant, v. UAB „Metruna“ (Lithuania), interested party

Case no.

Civil case No. e2T-18-370/2019 (court process No. 2-60-3-00006-2019-9)

Court

Lietuvos apeliacinis teismas (Court of Appeal of Lithuania), Civil Division

Underlying award(s)

London sole-arbitrator award of 20 November 2018 and additional award of 24 January 2019 (LMAA Terms)

Forum and rules

Recognition and enforcement under the 1958 New York Convention and the Lithuanian Law on Commercial Arbitration

Treaty

New York Convention, Article V(1)(d) and V(2)(b)

Court

Danguolė Martinavičienė (presiding and rapporteur), Goda Ambrasaitė-Balynienė, Aldona Tilindienė

Sector

Maritime shipping; charter party

Outcome

Both awards recognised and declared enforceable in Lithuania (12 March 2019); all of Metruna's objections rejected.

Amount

Award: USD 118,822.41 plus 5% annual interest compounded quarterly from 1 September 2018, costs, and arbitration costs of GBP 3,750. Additional award: GBP 6,509 plus arbitration costs of GBP 1,750. The court awarded Primetransport EUR 2,100 in costs for the recognition proceedings.

The dispute

Primetransport Ltd. and UAB „Metruna“ signed a charter party on 1 June 2018. It was governed by English law and provided for arbitration in London under the terms of the London Maritime Arbitrators Association (LMAA). Metruna did not pay what it owed under the charter party. A sole arbitrator, A. O., ordered it to pay USD 118,822.41 with interest and costs (award of 20 November 2018) and later fixed the costs in an additional award (24 January 2019). Primetransport asked the Court of Appeal of Lithuania to recognise and enforce both awards. Metruna raised three objections: the sole arbitrator had been appointed unilaterally, in breach of paragraph 11 of the LMAA Terms (appointment by the LMAA President); the arbitrator's impartiality was doubtful; and the costs award breached Lithuanian public policy (Article 98(1) of the Code of Civil Procedure), because the costs were not itemised or supported by evidence.

Key holdings

1. Clause 36 of the charter party provided for three arbitrators. If the other party did not appoint its arbitrator within 14 days of notice, the claimant could appoint its own arbitrator as sole arbitrator. This follows paragraphs 8(b)(i) and 10 of the LMAA Terms and section 17 of the UK Arbitration Act 1996. Paragraph 11 of the LMAA Terms did not apply. The appointment therefore matched the parties' agreement, and the objection under Article V(1)(d) failed. ¶¶ 26–30
2. Section 17(3) of the Arbitration Act 1996 allowed Metruna to ask the English court to set aside the default appointment, and it did not do so. Having failed to appoint its own arbitrator, Metruna is deemed to have accepted the nominated arbitrator. ¶¶ 29, 31
3. A lack of impartiality can fall under Article V(1)(d) or Article V(2)(b). But Metruna offered no evidence for its doubts. The arbitrator also accepted the appointment under the LMAA Terms, whose paragraph 3 requires impartiality, and so declared himself impartial. ¶¶ 15, 32
4. Awarding costs on the basis of a summary statement from the lawyers does not breach public policy under Article V(2)(b). Reviewing the amount or allocation of legal costs would mean reviewing the award on its merits, which the court may not do. The court relied on Supreme Court ruling No. 3K-3-363/2014 of 27 June 2014. ¶¶ 33–35
5. The court found of its own motion no other ground under Article V(1) or V(2). It recognised and allowed enforcement of both awards and ordered Metruna to pay Primetransport EUR 2,100 in costs. ¶¶ 36–40, operative part

Procedural history

1. 1 June 2018Primetransport and Metruna sign the charter party, which provides for London arbitration under the LMAA Terms.
2. 11 September 2018Primetransport appoints A. O. as its arbitrator. It gives notice that he will become sole arbitrator unless Metruna appoints its own arbitrator within 14 days.
3. 4 October 2018Primetransport appoints A. O. as sole arbitrator under clause 36, after correspondence with Metruna over his qualifications.
4. 20 November 2018The sole arbitrator's award orders Metruna to pay USD 118,822.41 with interest and costs.
5. 24 January 2019Additional award on costs: GBP 6,509, plus arbitration costs of GBP 1,750.
6. 12 February 2019The Court of Appeal adjourns the hearing and asks Primetransport for written explanations on how the arbitrator was appointed.
7. 12 March 2019The Court of Appeal recognises both awards and declares them enforceable in Lithuania. A cassation appeal to the Supreme Court was possible within 30 days.

Tribunal, counsel and experts

Decided by

• Danguolė Martinavičienė Judge, Court of Appeal of Lithuania (presiding judge and rapporteur)
• Goda Ambrasaitė-Balynienė Judge, Court of Appeal of Lithuania
• Aldona Tilindienė Judge, Court of Appeal of Lithuania

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Keywords

• New York Convention
• recognition and enforcement
• Article V(1)(d)
• Article V(2)(b)
• public policy
• composition of arbitral tribunal
• sole arbitrator default appointment
• LMAA Terms
• Arbitration Act 1996 section 17
• charter party
• maritime arbitration
• arbitrator impartiality
• legal costs
• no review of merits
• Lithuania
• London arbitration

Summary generated with AI from the published documents — refer to the award for the authoritative text.