Univers Acier Morocco v. PAO “Murmanskoje morskoje parochodstvo”

At a glance

Parties

Univers Acier Morocco (applicant; charterer) v. PAO "Murmanskoje morskoje parochodstvo" (interested party; shipowner)

Case no.

Civil case No. e2T-35-381/2020 (court process No. 2-60-3-00021-2020-8)

Court

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

Underlying award(s)

Partial award of 28 February 2020, London arbitration under the LMAA Terms (BIMCO/LMAA clause), made by two arbitrators

Forum and rules

Recognition and enforcement under the 1958 New York Convention, the Lithuanian Code of Civil Procedure and the Law on Commercial Arbitration (Article 51)

Treaty

New York Convention 1958 (Articles III, IV, V(1)(d), V(2)(b))

Court

Artūras Driukas (presiding and rapporteur), Dalia Kačinskienė, Danguolė Martinavičienė

Sector

Shipping; charterparty

Outcome

The partial award was recognised and declared enforceable in Lithuania (30 June 2020).

Amount

Award enforced: USD 4,100 and EUR 114,793.40 with 5% annual interest from 31 August 2018; 5% interest on USD 248,346.75 from 31 August 2018 to 8 November 2018; GBP 16,130 arbitration costs. Court costs: EUR 4,800 claimed, EUR 3,294 awarded.

The dispute

Univers Acier Morocco and the shipowner PAO "Murmanskoje morskoje parochodstvo" were parties to a charterparty dated 4 October 2018. The charterparty provided for London arbitration under the LMAA Terms and the BIMCO/LMAA clause. The shipowner started the arbitration on 30 January 2019, claiming demurrage and the costs of proceedings in Abidjan. The charterer counterclaimed for sums of money on 28 March 2019. In a partial award of 28 February 2020, two arbitrators dismissed the shipowner's claim, treating it as abandoned, and upheld the counterclaim. The charterer then asked the Lithuanian Court of Appeal to recognise and enforce the award so that it could reach undistributed proceeds from the auction sale of the shipowner's vessel "IVAN LOPATIN", held in a bailiff's deposit account in Lithuania. The shipowner made two objections. First, it argued that the tribunal was improperly constituted because two arbitrators decided the merits without appointing a third (Article V(1)(d)). Second, it argued that enforcement would breach public policy (Article V(2)(b)): it said it had not known of the arbitration, had been left unrepresented after its lawyers Brookes & Co withdrew, had not been properly served, and had never abandoned its claim.

Key holdings

1. The court will not review the award on the merits. The grounds in Article V of the New York Convention are exhaustive. The party resisting enforcement bears the burden of proof under Article V(1). The court examines Article V(2) ex officio. The dispute, which concerned obligations under a charterparty between businesses, is arbitrable. ¶¶ 7–11
2. Article V(1)(d) objection rejected. Under LMAA Terms clause 8(b)(ii) and (iv), the two party-appointed arbitrators may appoint a third arbitrator, but must do so only if they disagree. While they agree, they have power to make awards. The award records that the two arbitrators agreed, so no third arbitrator was needed. Neither party asked for a third arbitrator to be appointed, and the shipowner never objected to the tribunal's composition during the arbitration. ¶¶ 17–19
3. The shipowner knew of the arbitration. It had started the arbitration itself and appointed its own arbitrator. After Brookes & Co withdrew on 30 May 2019, it corresponded with the tribunal by e-mail. It also relied on the arbitration clause to have the Abidjan court decline jurisdiction. The court found its position contradictory: it said its lawyers had acted without authority, yet it denied that it had abandoned the claim they filed. ¶¶ 24–25
4. No breach of fair process. The tribunal asked the shipowner several times whether it would pursue its claim and issued a peremptory order. It dismissed the claim only after the shipowner failed to respond. The shipowner's own inaction caused this outcome. Its financial difficulties did not prevent it from taking part, because a party need not act through lawyers in arbitration. ¶¶ 26–27
5. Notice of the award was proper. Under LMAA Terms clause 25, the tribunal's e-mail of 28 February 2020 told the parties that the award was available once fees were paid. The public-policy ground under Article V(2)(b) was not proved. ¶¶ 28–29
6. The applicant filed certified copies and translations of the award and the charterparty, as Article IV requires. The award was recognised and declared enforceable. The applicant's claimed costs of EUR 4,800 were reduced to the maximum allowed under the Recommendations, EUR 3,294, and awarded against the shipowner. ¶¶ 30–36, operative part

Procedural history

1. 4 October 2018Charterparty concluded, with a clause for London arbitration under the LMAA Terms and the BIMCO/LMAA clause.
2. 30 January 2019The shipowner starts the London arbitration, claiming demurrage and the costs of the Abidjan proceedings.
3. 28 March 2019Univers Acier Morocco files its counterclaim.
4. 30 May 2019Brookes & Co tell the tribunal that they no longer represent the shipowner.
5. 21–29 October 2019The tribunal issues a peremptory order. The shipowner does not respond, and the tribunal treats its claim as abandoned.
6. 11 December 2019The tribunal closes the written submissions.
7. 28 February 2020Partial award in favour of Univers Acier Morocco.
8. 30 June 2020The Court of Appeal of Lithuania recognises the partial award and declares it enforceable. A cassation appeal to the Supreme Court of Lithuania is possible within 30 days.

Tribunal, counsel and experts

Decided by

• Artūras Driukas Judge, Lietuvos apeliacinis teismas (Court of Appeal of Lithuania) (presiding judge and rapporteur)
• Dalia Kačinskienė Judge, Lietuvos apeliacinis teismas (Court of Appeal of Lithuania)
• Danguolė Martinavičienė Judge, Lietuvos apeliacinis teismas (Court of Appeal of Lithuania)

For the respondent

Brookes & Co

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Keywords

• New York Convention
• recognition and enforcement
• Lithuania
• LMAA Terms 2017
• BIMCO/LMAA arbitration clause
• two-arbitrator tribunal
• third arbitrator
• composition of tribunal
• Article V(1)(d)
• public policy
• Article V(2)(b)
• due process
• abandonment of claim
• peremptory order
• charterparty
• demurrage
• Murmansk Shipping Company
• IVAN LOPATIN

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