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Primetransport Ltd. v. UAB „Metruna“

Case summary

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

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Keywords

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

Case ID
Lietuvos Apeliacinis Teismas (Court of Appeal of Lithuania), No. e2T-18-370/2019
Country
Claimant
Primetransport Ltd.
Respondent
UAB „Metruna“
Section

Court: Lithuania, Lietuvos Apeliacinis Teismas (Court of Appeal of Lithuania)
Date of decision: 12 March 2019
Case number: e2T-18-370/2019
New York Convention provisions: V | V(1) | V(1)(d) | V(2) | V(2)(b)
Source: New York Convention case law case database.