„Redwater“ N.V. v. JSC Murmansk Shipping Company

At a glance

Parties

„Redwater“ N.V. (applicant) v. JSC Murmansk Shipping Company (debtor/interested party)

Case no.

Civil case No. e2T-75-464/2019 (court process No. 2-60-3-00065-2019-4)

Court

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

Underlying award(s)

London arbitration award of 4 September 2018 (LMAA Terms)

Forum and rules

Recognition and enforcement under the 1958 New York Convention, Lithuanian Code of Civil Procedure (CPK) Arts. 809–813 and Law on Commercial Arbitration Art. 51

Treaty

New York Convention 1958

Court

Judges Marius Bajoras, Rasa Gudžiūnienė, Dalia Kačinskienė (presiding and rapporteur)

Sector

Maritime towage

Outcome

Award recognised and enforcement allowed in Lithuania (3 October 2019); request for legal costs refused.

Amount

Award enforced: GBP 264,519.53 with 5% annual interest compounded quarterly, plus GBP 16,130 costs of the award with interest. Applicant's claim for EUR 4,500 legal costs in the court case refused.

The dispute

„Redwater“ N.V. and JSC Murmansk Shipping Company signed an international towage contract on 19 September 2008. Clause 25 made English law applicable and referred disputes to London arbitration under the rules of the London Maritime Arbitrators Association. A London arbitral award of 4 September 2018 ordered Murmansk Shipping to pay Redwater costs arising from the dispute over improper performance of the contract. On 21 August 2019 Redwater applied to the Court of Appeal of Lithuania to recognise and enforce the award. The court papers were served on the master of a vessel in a Lithuanian seaport, as the debtor's representative. The debtor filed no response.

Key holdings

1. The New York Convention and Article 51 of the Law on Commercial Arbitration govern the application, because the United Kingdom is a party to the Convention. The applicant met Article IV: it filed a duly certified copy of the award and of the towage contract, with Lithuanian translations. ¶¶ 4–9
2. Clause 25 of the 19 September 2008 contract contains a written arbitration agreement within Article II of the Convention. ¶ 9
3. The court examined Article V(2) of its own motion and found no ground to refuse. A dispute between two legal entities over costs arising from a contract is not reserved to the courts and can be arbitrated. Recognising the award does not offend public policy. ¶¶ 10–12
4. The operative part of the award gave the amount in brackets in US dollars. The award's calculations, and arbitrator M. Hamsher's reply calling this an obvious typing error, show the currency is pounds sterling. The court therefore recognised the debt of GBP 264,519.53, not USD. ¶¶ 13–14
5. The court refused the EUR 4,500 claimed for legal costs. The lawyer's invoice had not been paid before the case was decided, so the costs were not real costs actually incurred, as CPK Arts. 88 and 98 and Supreme Court case law require. The applicant had enough time to pay the invoice before the hearing. ¶¶ 15–20

Procedural history

1. 19 September 2008The parties sign the international towage contract, with a London (LMAA) arbitration clause.
2. 4 September 2018The London arbitral award orders Murmansk Shipping to pay GBP 264,519.53 plus interest, and GBP 16,130 costs of the award.
3. 21 August 2019Redwater applies to the Court of Appeal of Lithuania for recognition and enforcement.
4. 28 August 2019The court accepts the application and sets a written hearing for 3 October 2019.
5. 3 September 2019A bailiff serves the court papers on the master of a vessel in a Lithuanian seaport.
6. 3 October 2019Ruling: the award is recognised and enforcement is allowed; the costs claim is refused. A cassation appeal to the Supreme Court is possible within 30 days.

Tribunal, counsel and experts

Decided by

• Dalia Kačinskienė Judge, Court of Appeal of Lithuania (presiding judge and rapporteur)
• Marius Bajoras Judge, Court of Appeal of Lithuania
• Rasa Gudžiūnienė Judge, Court of Appeal of Lithuania

For the claimant

G. Motiejūnienė

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Keywords

• New York Convention
• recognition and enforcement
• Lithuania
• Article V(2)
• public policy
• arbitrability
• Article IV formal requirements
• Article II arbitration agreement
• LMAA
• London arbitration
• towage contract
• maritime
• clerical error in award
• currency error
• legal costs
• Murmansk Shipping

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