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England and Wales Court of Appeal (Civil Division) Decisions

You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corpn [1979] EWCA Civ 6 (23 November 1979)
Cite as: [1980] 1 Lloyd's Rep 255, [1980] 1 All ER 420, [1979] EWCA Civ 6, [1980] 2 WLR 905

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BAILII Citation Number: [1979] EWCA Civ 6


Royal Courts of Justice
London W2A 2LL
23 November 1979

B e f o r e :









Kenneth Rokison Q.C. and David Grace (instructed by Norton, Rose, Botterell & Roche) for the plaintiffs in the first action.
Gerald Butler Q.C. and Giles Caldin (instructed by Richards, Butler & Co) for the defendants in the first action.
Mark Waller (instructed by Herbert Smith & Co) for the plaintiffs in the second action.
Marcus Jones (instructed by Lovell, White & King) for the defendants in the second action.
Hearing dates:

October 15, 16, 17, 19, 22, 23, 24, 25, November 23 1979



Crown Copyright ©


    When I was young, a sandwich-man wearing a top-hat used to parade outside these courts with his boards back and front, proclaiming 'Arbitrate, don't litigate'. It was very good advice so long as arbitrations were conducted speedily: as many still are in the City of London. But it is not so good when arbitrations drag on for ever.

    These cases mark a new development in the law of arbitrations: parallel to the development 11 years ago when we started to strike out actions at law for want of prosecution. That development has had some beneficial results. It has taught practitioners that they must observe the time schedules provided by the rules of court. They must enter in their diaries the latest dates by which writs must be issued and served, pleadings delivered, discovery made, and cases set down for trial. They must keep those dates or get them extended by consent; else they may find themselves in serious trouble. The consequences have, I believe, been beneficial. Many actions are started as 'try-ons'. The plaintiff's claim is weak, but it is hoped that the defendants will pay up or settle. Where the try-on is unsuccessful, and the defendants resist it, the plaintiff or his advisers lose heart. Sooner or later they let things slide. At length the defendant applies to dismiss it for want of prosecution. The plaintiff's advisers then take fright, lest they be held responsible. But the court is adamant. The action is struck out. Other actions are much more genuine. The claim is well founded, but the plaintiff's advisers become busy with other things. They put this case on one side until they have more time to deal with it. Before long they forget about it altogether. This may be their own fault; or it may be the fault of the plaintiff himself for not reminding them; or for not doing what the advisers ask of him. But whatever it is, the time may come when the delay is so inordinate and so inexcusable that a fair trial is impossible. In that case too the court is strict. It strikes the action out. Not for want of sympathy with the plaintiff: but out of justice to the defendant. During the lapse of time, witnesses will have died, memories will have faded, documents will have been lost, all of which might have served him to defend himself against the plaintiff. It is not fair to the defendant to make him fight a case with his hands tied behind his back. So here too the plaintiff or his advisers have to take the consequences. The action is struck out for want of prosecution.

    Now in the year 1979 we are invited to make a like development in regard to arbitrations. Three recent cases now show that, in arbitrations, as well as in courts of law, cases may last 'so long as to turn justice sour'. They show, too, that an arbitrator has far less power than a judge. If the parties drag their feet, the arbitrator can do nothing to quicken them up. He cannot dismiss a claim for want of prosecution. He cannot strike out a dilatory plea which is put in just to gain time. He must abide the pleasure of the parties. He has no sanctions with which to enforce his orders. Seeing that he can do nothing, the question is: can the courts do anything about it?

    Just see what has happened in these three cases. In the first case it is 13 years since five big bulk carriers were built and delivered to the owners ('South India Shipping'). They have sailed the oceans ever since earning money for their owners. The owners now make claims for damages against the builders ('Bremer'). Starting modestly, the claims now come to a large figure. It is so large that you could buy two of the five ships with it. They say that the five ships were badly designed and badly built those 13 years ago. Most of the engineers who worked on them have died or retired. The arbitration was not started for over five years. The parties appointed Sir Gordon Willmer, who had recently retired from this court. They could not have picked anyone better. But that was nearly eight years ago, when he was 72. The parties have not been near him since. He is now 80. The arbitration has only got so far as points of claim. They cover 137 pages of foolscap with masses of detail. They go into all the alleged defects of 13 years ago and the damage said to result from them in the succeeding years. If the arbitration is to proceed, it will need several years more to prepare for the hearing. The arbitrator will have died, or got past it. A new arbitrator will have to be appointed. A fair trial is quite impossible. Much of the delay is due to the claimants, South India Shipping. They went to sleep off and on for months at a time. Not even a snore was heard. Time and again they said they were just about to deliver full points of claim. Eventually, after a whole year without a word, they delivered those portentous points of claim. The judge has held that their delay was inordinate and inexcusable, and that the builders, Bremer, had suffered serious prejudice from it. Is the arbitration to be allowed to go on?

    In the second case it is nine years since some shareholders called Gregg in a publishing company sold their holding to purchasers called Raytheon. The Greggs gave several assurances to Raytheon about the amount of business being done by the publishing company. The transaction was completed in 1970 those nine years ago when Raytheon took over the business. A few months later Raytheon complained that the business was not what it was represented to be. They claimed £500,000 as damages. The matter was referred to arbitration in accordance with the rules of the International Chamber of Commerce: but by agreement the arbitration was to be held in London. Over six years ago, in 1973, three arbitrators were appointed, all very suitable, Mr Desmond Miller QC, Mr Michael Mustill QC and Mr I A H Davison. Those arbitrators ordered pleadings and discovery. Over the years pleadings were delivered, but discovery was never complete. Time and time again the arbitrators fixed dates for hearing, but time and time again these were abandoned. The reason every time was because Raytheon had not given proper discovery. It was a case where full discovery was essential. Raytheon had bought the shares and were in control of the publishing company. They would have all the papers showing what business the publishing company did before and after the deal, showing whether the assurances were broken or not, and if so, what the damages were. They promised many a time to get the documents from the United States of America. Eventually, in July 1975, over four years ago, the three arbitrators adjourned the case generally with liberty to either party to restore. It never has been restored. The claimants Raytheon went silent for three whole years. When they bestirred themselves, two of the arbitrators had gone off and put on new suits. Mr Desmond Miller QC had left the Bar and become a man of business. Mr Michael Mustill QC had become a judge of the High Court. So it looks as if one or two new arbitrators will have to be appointed. It was only last November 1978, after three years of silence, that Raytheon's solicitor wrote offering inspection of thousands of documents. It will take a long time before these can be analysed and the case is ready to be heard. And then much will depend on oral conversations ten years before when the shares were sold. The judge held that the delay of Raytheon was inordinate and inexcusable and that the prejudice to Greggs would be most serious. Is the arbitration to be allowed to go on?

    The third case (André et Compagnie SA v Marine Transocean Ltd, The Splendid Sun (4 May 1979) unreported) is not before us, but it is so pertinent that I would mention it. In 1969, ten years ago, the Splendid Sun carried 10,400 tons of maize from Mexico to Venezuela. On arriving at the discharging port, she grounded and suffered damage of over $US200,000. The owners claimed damages from the charterers for not nominating a safe port. In that same year, 1969, two experienced commercial arbitrators in the City of London were appointed, Mr Cedric Barclay for the owners and Mr Lynn for the charterers. Nothing happened for eight whole years. Then on 3 January 1978 the owners delivered points of claim. By this time Mr Lynn had died, though Mr Barclay is still going strong. Lloyd J has held that the delay has been such as to frustrate the arbitration agreement. Is the arbitration to be allowed to go on? The case was decided by Lloyd J on 4 May 1979.

    We had a good deal of discussion about the facts in our two cases, especially whether there had been acquiescence by one party in the delay of the other. All I need say on this is that, so far as our court cases are concerned, even when there has been acquiescence up to a point, nevertheless, if the claimant is thereafter guilty of further delay, he does so at his peril: because on an application to dismiss for want of prosecution, the court can and should look at the whole of the case from beginning to end. If, owing to the claimant's inexcusable and inordinate delay, before and after the acquiescence, a fair trial is impossible, the case may be struck out for want of prosecution. I agree entirely with the observation of Donaldson J ([1979] 3 All ER 194 at 198) on this point. I do not think we need pause on the unreported cases of County & District Properties Ltd v Lyell or Murrayfield Real Estate Co Ltd v C Bryant & Son Ltd. They should be left in the oblivion to which the law reporters quite rightly consigned them.

    I see no reason to differ from the judge's assessment of the facts in these cases. So I turn to the law.

    The powers of an arbitrator

    One question is of importance: has an arbitrator any power to dismiss a claim for want of prosecution? If he has such a power, I should have thought that any application should be made to him rather than to the courts. At present, however, there are two conflicting decisions at first instance. In Crawford v A E A Prowting Ltd, Bridge J held that an arbitrator had no power to dismiss a claim for want of prosecution. In our present case of Bremer Vulkan Schiffbau v South India Shipping Corpn ([1979] 3 All ER 194 at 201, 204) Donaldson J has held that an arbitrator has the power.

    To decide between these two, I would say this: the powers of an arbitrator are derived from the agreement of the parties. In the ordinary way the parties agree simply to refer any matters in dispute to arbitration without saying what powers the arbitrator is to have. In this situation his powers are to be defined by the law itself. Scrutton J once said that he has 'inherent powers as a judicial officer': see Re an arbitration between Crighton and the Law Car and General Insurance Corpn Ltd ([1910] 2 KB 738 at 745). He also has the powers set out in s 8(1) of and Sch 1 to the Arbitration Act 1934, and repeated in s 12(6) of the Arbitration Act 1950. These require the parties to do 'all other things which, during the proceedings on the reference, the arbitrator or umpire may require' (Arbitration Act 1950, s 12(1)).

    Apart from previous authority, I would have been disposed to think that an arbitrator would have the power to do, and to require the parties to do, all the same things as a judicial officer could do. He could require the delivery of pleadings, and the disclosure of documents. He could allow or disallow the amendment of pleadings. He could fix a day for hearing, and so forth. If his orders were disobeyed, I should have thought that he could have imposed sanctions for non-compliance. But there is a decision going back for over 60 years now which says he has no power to inflict sanctions for disobedience. It is Re an arbitration between Unione Stearinerie Lanza and Weiner. An Italian buyer bought goods from an English seller. The contract contained an arbitration clause. The Italian buyer claimed damages in an arbitration here in London. The English seller asked the arbitrator to order the Italian buyer to put up security for costs. That would have been automatic in a court of law, because the claimant was resident abroad. But it was held that the arbitrator had no power to make an order for security for costs. The reason, as I see it, was because, implicit in such an order, there would be an implied sanction: namely, that unless security were given, the proceedings would be stayed. Viscount Reading CJ ([1917] 2 KB 558 at 561–562) said that 'the words in clause (f) [of Sch 1 to the Arbitration Act 1889] … do not give the power to order a stay of proceedings'.

    Likewise, suppose that an arbitrator made a peremptory order for delivery of points of claim adding that 'unless' they were delivered in seven days the proceedings would be stayed. Such an 'unless' order would be beyond the powers of the arbitrator, because in the words of Viscount Reading CJ ([1917] 2 KB 558 at 561–562), 'the words in clause (f) … do not give the power to order a stay of the proceedings'.

    This view of the law has been accepted by practitioners: and the parties at arbitrations have taken advantage of it. Especially defendants who want to get more time. They will instruct their arbitrator to delay as much as he can. They will say they are not ready. They will manufacture counterclaims or set-offs. They will get up to no end of tricks, such as were described by MacKinnon J in 1927 (Report of Committee on the Law of Arbitration (March 1927), Cmd 2817) and by me in Associated Bulk Carriers Ltd v Koch Shipping Inc, The Fuohsan Maru ([1978] 2 All ER 254 at 257, [1978] 1 Lloyd's Rep 24 at 26). In 1978 the Commercial Court Committee in their Report on Arbitration (Cmnd 7284 (July 1978), para 57) observed:

    'A favourite ploy by those who seek delay is to ignore the time table fixed by the arbitrator or to fail to comply with directions for the delivery of a defence or for discovery. Parties to an action in the Commercial Court who adopted similar tactics would receive short shrift, since the Court would strike out the claim or counterclaim or debar the defendants from defending.'

    In this situation I am afraid we must recognise that arbitrators are impotent. They can make all sorts of orders for pleadings, discovery and the like: but they are exhortatory only. Either party can cock a snook at the arbitrator. Either can disobey with impunity. It is only the court that can bring a party to book.

    Parliament has just given some remedy in s 5 of the Arbitration Act 1979; but it only applies to arbitrations stated after 1 August 1979 (Arbitration Act 1979 (Commencement) Order 1979, SI 1979 No 750).

    The powers of the court

    It is some confirmation of this view that Parliament has intervened to correct the position. It has set out some specific orders which the court can make in aid of an arbitration. In s 8 of the Arbitration Act 1934, as read with Sch 1 to that Act, now replaced by s 12(6) of the 1950 Act, it says that—

    'The … Court shall have, for the purpose of and in relation to a reference, the same power of making orders in respect of—(a) security for costs; (b) discovery of documents … as it has for the purpose of and in relation to an action or matter in the High Court.'

    In case, therefore, a party to an arbitration desires security for costs, or discovery, which the other refuses to give, he can apply to the court. Then the court can make an order and apply sanctions to enforce obsedience. It can make a peremptory order saying that 'unless' such and such is done within such and such a time, the proceedings in the arbitration shall be stayed. Just as it could stay proceedings in an action. So, although the arbitrator has no power to inflict sanctions, the court has the power.

    Some may say that s 12(6) of the 1950 Act is exhaustive: that the court can only intervene in the cases specified in paras (a) to (h) of that subsection, and in no others. I do not take that view. That section was enacted so as to make it clear that the courts can intervene in those cases at any rate, leaving it open to the courts to intervene in any other cases in which its inherent jurisdiction enables it so to do. We have recently held that the powers of the court are not to be found exclusively in the statute, but also in its inherent jurisdiction: see Japan Line Ltd v Aggeliki Charis Compania Maritima SA, The Angelic Grace.

    The inherent jurisdiction of the court

    There is a difference between the powers of the court after an award has been made and before it. It is quite clear that, after it has been made, the court can set it aside if the arbitrator has wholly or partially exceeded his jurisdiction, or if he has been guilty of misconduct, or if there is an error of law on the face of the award. Before any award is made, the court can restrain the parties and the arbitrator from proceeding further with it in these cases: first, where one party brings an action impeaching the supposed arbitration agreement, saying that there was no binding agreement (see Maunsell v Midland Great Western (Ireland) Railway Co and Kitts v Moore); and second, where the arbitrator has done something or other which shows him to be unfit or incompetent to continue with the arbitration (see Beddow v Beddow and Jackson v Barry Railway Co ([1893] 1 Ch 238 at 249, [1891–4] All ER Rep 661 at 666)).

    Counsel for Raytheon submitted that those two were the only cases where the courts would restrain an arbitrator from continuing. He said that there was no general jurisdiction in equity to prevent an arbitrator from continuing. He relied on North London Railway Co v Great Northern Railway Co. Two trains were in collision. One railway company said it was the fault of the other company's signalman. The other railway company said it was the fault of the first company's driver. One company started arbitration proceedings. The other company said the dispute was not within the arbitration clause, and started an action at law. The Court of Appeal refused to stay the arbitration pending the trial of the action. They realised that the arbitration might be futile, because the dispute might not be within the arbitration clause. Yet they allowed the arbitration to go on. Both the arbitration and the action went on together. Nowadays it is obvious that the two proceedings would not be allowed to continue side by side. Either the arbitration should be stayed, or the action should be stayed. The procedure of these courts has altered so much in the last 100 years that that case cannot, in my view, afford any guidance to us today.

    On the other side counsel for the Greggs referred us to a case in 1865 of Pickering v Cape Town Railway Co. There was a contract for the construction of a railway. It contained an arbitration clause, but instead of proceeding under it, the company took possession of the works. The company afterwards sought to insist on going to arbitration. Page Wood V-C restrained them. He said ((1865) LR 1 Eq 84 at 87–88) that if—

    'the Court should be of opinion that they have debarred themselves from exercising those rights [to take arbitration proceedings] by the course of conduct which they have adopted, there arises an equity, which prevents them from prosecuting proceedings, however they might otherwise be entitled to do so … '

    In the next edition of Russell on Arbitration (Russell on Arbitration (7th Edn, 1891) p 204) that case was cited as authority for this proposition: 'Parties, however, sometimes conduct themselves in such a manner as to induce the Court of Chancery to restrain them from proceeding in a reference.'

    That proposition was accepted in New South Wales in Sneddon v Kyle, and underlies a case in Ontario, Danforth Travel Centre Ltd v BOAC. In the text to a note in Halsbury's Laws of England (21 Halsbury's Laws (3rd Edn) p 406, para 852; 24 Halsbury's Laws (4th Edn) para 1038), it is said:

    'The court has jurisdiction to interfere in arbitration proceedings on equitable grounds where the parties have by their conduct excluded themselves from the benefit of their contract to arbitrate.'

    Following these persuasive authorities, I am of opinion that this court has an inherent jurisdiction to restrain arbitration proceedings where it would be right and just to do so: and it may be right and just when the claimant has been guilty of such inexcusable and inordinate delay that a fair hearing is impossible. In other words, the court can dismiss the claim for want of prosecution, just as it can an action.

    Frustrating delay

    There is, however, another way of reaching the same result. It must be remembered that the parties, having agreed to submit their differences to arbitration, are bound to pursue that method of proceeding. Co-operation by both is essential to its success. On the one hand it is the duty of the claimant to proceed with reasonable despatch so that the respondents are not prejudiced by delay. On the other hand it is the duty of the respondent not to baulk the claimant by devious manoeuvres.

    Those duties are, in my opinion, imposed by law; and not by any application of the Moorcock (The Moorcock (1889) 14 PD 64, [1886–90] All ER Rep 530) principle. They are imposed by more general considerations, such as Viscount Simonds remarked in Lister v Romford Ice & Cold Storage Co Ltd ([1957] 1 All ER 125 at 133, [1957] AC 555 at 576); and Lord Wilberforce and Lord Edmund-Davies approved in Liverpool City Council v Irwin ([1976] 2 All ER 39 at 44, 54–55, [1977] AC 239 at 254–255, 266–267); and I spelt out in Shell UK Ltd v Lostock Garage Ltd ([1977] 1 All ER 481 at 487, [1976] 1 WLR 1187 at 1196) (the first category of implied terms).

    So there is, in my opinion, a duty imposed by law on the claimant to use reasonable despatch. He may often break that duty with impunity. Delay often does no harm to the respondent. Even unreasonable delay may do no harm to anyone but the claimant himself. But sometimes the delay may reach such proportions as to frustrate the very object of the venture, the very purpose of the arbitration itself, so that there cannot be a fair hearing and the arbitrator cannot reach a just result. When the delay is as great as this, when it is so great as to frustrate the arbitration itself, the respondent is entitled to treat the contract of arbitration as at an end: see the cases collected by Devlin J in Universal Cargo Carriers Corp v Citati ([1957] 2 All ER 70 at 80–82, [1957] 2 QB 401 at 430–434). That was the approach favoured by Lloyd J in André et Compagnie SA v Marine Transocean Ltd, The Splendid Sun, when he said: '… the test should be the same as in other cases of delay, namely, such delay as would frustrate the arbitration agreement.'

    Frustrating delay in this sense is equivalent to a repudiation of the arbitration agreement, which the respondent can elect to accept, and, on doing so, can apply to dismiss the claim for want of prosecution. He can also claim as damages the cost to which he has been put in preparing for the arbitration thus rendered fruitless.

    International Chamber of Commerce rules

    Before us counsel for Raytheon raised a point which was not taken below. It only applies to the shares case where the arbitration was to be held 'in Geneva, Switzerland under the rules then prevailing of the International Chamber of Commerce'. By agreement London was substituted for Geneva. The proper law of the contract was governed by the laws of England and of the State of Delaware; but the procedure was governed by the law of England: see James Miller and Partners Ltd v Whitworth Street Estates ([1970] 1 All ER 796 at 809–810, [1970] AC 583 at 616) by Lord Wilberforce.

    Counsel for Raytheon took us through the rules of the ICC. He showed us that, in addition to the three arbitrators named by the parties, there was a 'Court of Arbitration' in Paris which exercised some kind of supervision over the arbitration proceedings. He submitted that, under the rules, the Court of Arbitration in Paris was the superior authority in matters of procedure: and that, if one of the parties was guilty of unreasonable delay, the remedy was to apply to the Court of Arbitration in Paris. He relied on the practice as set out in an affidavit by Dr Eisemann, at one time the head of the secretariat of the ICC; and also on art 31, which says that—

    'In any circumstances not specifically provided for above, the Court of Arbitration … shall act on the basis of these Rules and make their best efforts for the award to be enforceable at law.'

    I do not propose to go into the rules in detail. Suffice it to say that I do not find in them any power in the Court of Arbitration in Paris to inflict sanctions on a party, or to dismiss a claim for want of prosecution. There is a further difficulty in this case. No terms of reference were drawn up by the arbitrators so as to satisfy art 19. No hearing could be held until the terms of reference were drawn up.

    I regard the arbitration in London under the ICC rules as virtually equivalent to an ordinary English arbitration. The Court of Arbitration in Paris is a body with administrative functions only. It has no power to interfere in the judicial process of the arbitrators. If there is inordinate and inexcusable delay, the courts in England can take a hand, but no one else.

    I would reject, therefore, the point on the ICC.


    In the end I think we should make the new development which we are invited to make. We should develop the law as to arbitration on the same lines as we did 11 years ago for the law of actions. The judges in the courts below, Donaldson and Lloyd JJ, have pointed the way. Both are most experienced in the ways of arbitrations. By their opinions we set great store. They have struck out these three commercial claims for want of prosecution. I would do the same. In doing so, I do not overlook the further development which is foreshadowed. It may often happen that it is the respondents who cause the delays. They may put up one excuse after the other, so as to gain more time, or so as to avoid payment of a just demand. If the arbitrator has no power to bring them to book, can the courts intervene? If our decision today is correct, the principle underlying it may, I only say 'may', apply to respondents as much as to claimants. If the respondents to an arbitration are guilty of such wilful delay as to frustrate the arbitration agreement itself, they may be said to have broken the agreement and be liable in damages. The damages would be assessed according to the chance which the claimants had of succeeding in the arbitration. I throw that out only by the way because one has to look ahead as far as one can when new developments are made new law. There are exciting times ahead. But for the reasons I have given I would uphold the decision of Donaldson J in these two cases, and dismiss the appeal.


    These two appeals from decisions of Donaldson J dated 10 April 1979 raise, as the judge said at the outset of his judgment, questions of great importance relating to the conduct of arbitrations in this country and especially in relation to the conduct of those arbitrations to which s 5 of the Arbitration Act 1979 will not apply. Before us the appeal in Gregg v Raytheon Ltd was argued before the appeal in Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corpn, though before the judge the cases were apparently heard in the reverse order. I shall call the first appeal 'the Raytheon appeal' and the second 'the Bremer appeal'. In each action the judge has held that the appellants ('Raytheon' and 'South India Shipping'), who were the defendants in the two actions and the respective claimants in the two arbitrations, had been guilty of inordinate and inexcusable delay which had caused such prejudice to the plaintiffs in each of the two actions ('the Greggs' and 'Bremer'), who were the respective respondents in the two arbitrations and of course in these appeals, that had the appellants commenced these proceedings in the High Court by way of action instead of by arbitration in accordance with the arbitration clauses in the respective agreements under which the disputes concerned arose such proceedings would have been dismissed by the High Court for want of prosecution in accordance with the principles laid down in Birkett v James and Allen v Sir Alfred McAlpine & Sons Ltd. The judge ([1979] 3 All ER 194 at 197–198, [1979] 3 WLR 471 at 474–476) summarised those principles in six succinct paragraphs. Subject to what I say in the next sentences on the question of acquiescence (see para 5 of the judge's summary) I accept as correct and gratefully adopt the judge's summary without repetition. Counsel for South India Shipping argued that acquiescence was an absolute bar and that, once there was acquiescence in delay, the existence of that delay ceased to be relevant. Only further delay is relevant. Since I take the view, as did the judge, that there was no acquiescence in the Bremer case, this point does not arise for decision. But as at present advised, I think the argument of counsel for South India Shipping is inconsistent with what Salmon LJ said in Allen v Sir Alfred McAlpine & Sons Ltd ([1968] 1 All ER 543 at 563–564, [1968] 2 QB 229 at 272).

    The question for decision before Donaldson J was, and in this court is, whether those principles have any application to the conduct of arbitration in this country. Until the present cases no court has held that they have. But the judge has held first that an arbitrator (I include an umpire in that word) has power to dismiss for want of prosecution and to make an award to that effect. He has further held that in such a case the courts have power to intervene and prevent a dilatory claimant in an arbitration from further proceeding with his claim by granting an injunction restraining him from so doing. The judge based this conclusion on the view that unjustified delay by a claimant struck at the root of an agreement to arbitrate which a respondent might treat as repudiatory conduct and accept as such, thus bringing to an end the agreement to arbitrate, and enabling him to obtain an injunction and also, where appropriate, damages, eg for wasted expenditure.

    The judge's first conclusion that an arbitrator had power to dismiss for want of prosecution was contrary to an earlier decision of Bridge J in Crawford v A E A Prowting Ltd, where Bridge J had held that there was no such jurisdiction vested in an arbitrator. The argument that the court had power in effect to achieve the same result by an injunction was not and indeed could not have been advanced in that case, since the matter came before Bridge J by way of case stated by an arbitrator who had been invited to dismiss the claimants' claim in that arbitration for want of prosecution.

    Before us, counsel for Raytheon, the appellants in the Raytheon appeal, argued as almost his last submission that Donaldson J had reached the wrong conclusion on the facts of that case. Counsel for South Indian Shipping, the appellants in the Bremer appeal, devoted virtually the whole of his argument to a like submission and was content for the rest to adopt (with one exception) counsel's submissions for Raytheon on the other issues so far as relevant to the Bremer appeal. In neither appeal did this court find it necessary to call on counsel for the respondents to support the judge's conclusions on the facts of the case, for, notwithstanding the arguments of counsel for each of the appellants, I think the judge's conclusions on the facts in each case are quite unassailable. For my part I would in each case have unhesitatingly reached the same conclusion as did Donaldson J. But even if I had felt any doubt as to the correctness of either or both of his conclusions, which I do not, I would not have been willing to interfere with his exercise of his discretion on a matter of this kind, assuming, of course, he was right in applying to arbitrations the same principle as is now clearly established to apply to actions in the High Court.

    It follows that for the first time this court is asked to decide whether, first, arbitrators have power to dismiss for want of prosecution in such circumstances and make an award to that effect, and, secondly, whether or not they have such power, the court has power to interfere in such circumstances by injunction. It is convenient to mention at this juncture that since the instant decisions, in André et Compagnie SA v Marine Transocean Ltd, The Splendid Sun Lloyd J granted an injunction restraining claimants in an arbitration from proceeding with their claim. The question whether arbitrators had power to strike out did not arise for decision. The delays in that case were even worse than in the instant cases since the arbitration in question had been begun in 1969 and no steps had been taken thereafter for over eight years. Lloyd J stated that, as is the fact, until the instant cases, no court had granted an injunction such as Donaldson J granted.

    But following Donaldson J's decision Lloyd J granted such an injunction, resting his decision on the submission that the delay in question was such as would frustrate the agreement to arbitrate, a submission apparently not advanced before or considered by Donaldson J. As will later emerge, I think Lloyd J was right to rest his decision on this foundation rather than on that enunciated on this branch of the case by Donaldson J if, which still remains to be considered, the court has any power to interfere by injunction in the circumstances under consideration.

    It should be mentioned that neither of the two counsel for the respective respondents, who, as plaintiffs, obtained injunctions from Donaldson J, found it easy to support that part of the judge's judgment which held that arbitrators had power to dismiss for want of prosecution and to make an award to that effect. Counsel for the Greggs dealt with this question only towards the end of many submissions, while counsel for Bremer, whose help we had invited in order to make sure that no point favourable to the judge's view had inadvertently been overlooked, recognised his difficulty in supporting this part of the judgment.

    It is strange that if arbitrators have this power it has never been invoked, at any rate in such a way as to obtain a decision of the court on its existence. The inadequacy of the powers of arbitrators to deal with delays, often deliberate delays, has long been a matter of complaint. Many of the proposals of the powerful committee over which MacKinnon J presided 1927 (Cmd 2817) they were directed towards strengthening the Arbitration Act 1889 so as to avoid delays which by 1927 were already notorious. Those of the proposals which were ultimately adopted found their place on the statute book in the Arbitration Act 1934. As recently as 1978 the Commercial Court Committee, over which Donaldson J himself presided, in a report (Report on Arbitration (July 1978), Cmnd 7284) bewailed the constant delay and discussed the 'favourite ploy' by those seeking delay. Paragraph 57, which bears the rubric 'Sanctions in case of delay or failure to comply with the arbitrator's directions' merits quotation in full:

    'A favourite ploy by those who seek delay is to ignore the time table fixed by the arbitrator or to fail to comply with directions for the delivery of a defence or for discovery. Parties to an action in the Commercial Court who adopted similar tactics would receive short shrift since the Court would strike out the claim or counterclaim or debar the defendant from defending. In cases which fall within section 12(6) of the 1950 Act it is possible for parties to obtain an order from the High Court and for that Court to apply sanctions in the event of default. However, this is not widely known, does not cover all forms of foot-dragging and involves at least two attendances on the High Court—first to obtain an order and further attendances to invoke sanctions. What is required is power for the High Court to apply sanctions for disobedience of orders made by the arbitrator. This too is a suitable subject for the attention of an Arbitration Rules Committee.'

    That report was in part responsible for the passing of the Arbitration Act 1979, including s 5. But in neither the report of MacKinnon J's committee nor in this report of the Commercial Court Committee does one find any hint or suggestion that arbitrators have so readily to hand this lethal weapon which the judge in his judicial capacity has held to exist.

    On the other hand, it must be said that before Allen v Sir Alfred MacAlpine & Sons Ltd and the other related cases it had not readily occurred to practitioners that this weapon of striking out was available to dispose of personal injury and other actions of seemingly indefinite duration, and perhaps it is not surprising that the possibility of using this weapon had not occurred to those engaged in arbitrations rather than litigation. Nonetheless complaints of delays in arbitration have been of as long, or longer, standing as complaints of the law's delays, and it has at long last in 1979 been thought necessary to deal with this problem by legislation.

    In my view it is necessary to consider the correctness of the judge's view both as a matter of history and of principle. Until well into the last century the courts looked askance at arbitrations. The procedure was suspect as tending to oust the jurisdiction of the courts, and indeed one finds traces of this attitude in decided cases well into this century notwithstanding the passing, first, of the Common Law Procedure Act 1854 and, secondly, of the Arbitration Act 1889.

    As Lord Moulton pointed out in his speech in Bristol Corpn v John Aird & Co ([1913] AC 241 at 256–257, [1911–13] All ER Rep 1076 at 1080–1081), it was not until the Common Law Procedure Act 1854 that Parliament gave to the courts the limited power of stay which s 11 of that statute accorded in cases where the parties had agreed that existing or future differences should be referred to arbitration, provided, of course, the other conditions in that section were also satisfied. Until then if one of the parties to a submission refused to proceed to arbitration the other was left to a useless remedy in an action for damages (see also in this connection the judgment of this court in Re an intended arbitration between Smith & Service and Nelson & Sons, where it was held that the only remedy for unilateral revocation of a submission to arbitration, before s 1 of the Arbitration Act 1889 was enacted, lay in an action for damages for breach of contract). But the Common Law Procedure Act 1854 is singularly silent as to the powers as distinct from the duties of arbitrators; for example, s 15 provided that an arbitrator should, save in circumstances for which the section made provision, make his award within three months of his appointment. Those and other sections of the 1854 Act dealing with arbitrations were repealed by Sch 2 to the Arbitration Act 1889. That statute in s 4 re-enacted, in a somewhat different form, s 11 of the 1854 Act. By s 2 of and Sch 1 to the 1889 Act, nine provisions respectively lettered (a) to (i) were ordered to be implied into submissions to arbitration unless the parties had otherwise provided. The former s 15 found new and extended life in paras (c), (d) and (e) of that schedule, provisions which were castigated by the MacKinnon committee as of no practical value (see para 5 of that report Cmd 2817). It is to be observed that para (f) created an implied obligation on parties to give evidence and also discovery, but notwithstanding that provision no sanctions were provided for any failure so to do. Curiously enough, Sch 1 to the 1889 Act contained no express power to order pleadings or indeed to allow amendments to pleadings, nor was any power given to arbitrators to order a claimant to give security for costs in cases where in an action a court would order such security to be given.

    It is difficult to think that, if between 1889 and 1934, when some of the recommendations of the MacKinnon committee took effect in the Arbitration Act 1934, anyone had been bold enough to assert that an arbitrator had power to dismiss an arbitration for want of prosecution and to make an award to that effect without more ado, such a submission would have been favourably received in any court of law. That that is so is supported, I think, by two decisions in this period, especially the second, to neither of which was Donaldson J referred when this matter was before him. In Re an arbitration between Crighton and the Law Car and General Insurance Corpn Ltd, a Divisional Court which included Scrutton J held that an arbitrator had both inherent power and also power under para (f) of Sch 1 to the 1889 Act to order pleadings and to allow or to refuse amendments to them. No doubt it was this decision which made it unnecessary for the MacKinnon committee to recommend that this apparent gap in Sch 1 to the 1889 Act be filled by legislation. More important, in Re an arbitration between Unione Stearinerie Lanza and Weiner the Divisional Court held that an arbitrator had no power to order security for costs. That court declined to extend Scrutton J's reasoning in Re Crighton to the length necessary to enable security for costs to be ordered by an arbitrator. Viscount Reading CJ said ([1917] 2 KB 558 at 561):

    'I do not think Scrutton J. meant by those words to imply that an arbitrator under a submission by agreement was in the same position as and had all the powers of a judge. I think he meant that he had power to ascertain the facts and, under clause (f), power to order points of claim to be delivered, and, that that being so, he must have the power also, sitting as the person to decide the questions, to allow an amendment. I do not think he meant anything more than that.'

    This decision led to the recommendation of the MacKinnon committee that the court, not, be it noted, arbitrators, should be given power (inter alia) to order security for costs, a provision subsequently enacted in the 1934 Act and now finding its place in s 12(6)(a) of the Arbitration Act 1950.

    It was faintly suggested that we should overrule the Unione Stearinerie case. It would be completely wrong for us to do so even if I had any doubts (which I have not) as to its correctness. When a decision has been accepted for over 60 years and its consequences remedied by statute, though not so as to give arbitrators power to order security for costs, it would indeed be strange for the Court of Appeal to hold at this late stage that this latter power had always existed.

    I cannot but think that if the judge had been referred to this decision, and in particular to the passage I have just quoted from the judgment of Viscount Reading CJ, he would not have reached the conclusion that he did, namely that parties by their agreement to arbitrate impliedly clothed the arbitration tribunal with jurisdiction to give effect to their rights and remedies to the same extent and in the same manner as a court, subject only to certain well-recognised exceptions.

    The judge relied on the decision of this court in Chandris v Isbrandtsen-Moller Co Inc as supporting his view. With great respect, I do not think that that decision goes so far as the judge thought. An arbitrator may award interest on damages in a proper case for the reasons given by this court in the Chandris case. But that is not to say, as the judge sought to say, that an arbitrator has in all the circumstances all the powers of the court, subject only to the exceptions which he mentioned. I venture to think that the members of this court who decided the Chandris case would have been surprised to learn that they had impliedly held that an arbitrator had power to dismiss for want of prosecution and has also impliedly reversed the decision in the Unione Stearinerie case.

    So far I have dealt with the question only by considering the history of the relationship between the courts and arbitrators and what I conceive to be the principle which has to be applied in these cases. But we were referred to an ill-reported case, Wilson Sons & Co v Condé d'Eu Railway Co. This was a decision of the Divisional Court (Day and Wills JJ) in which it appears to have been held that an arbitrator, seemingly vested with all the powers of a judge at nisi prius, nonetheless had no power to strike out the claims that were before him, but that he must adjudicate on them (see the brief report of the successful argument of the then Attorney General and also of the judgment of the court). This decision was before the 1889 Act, but for what it is worth supports the conclusion at which I have independently arrived.

    One reason which Bridge J (In Crawford v A E A Prowting Ltd [1972] 1 All ER 1199 at 1203, [1973] 1 QB 1 at 7) gave for holding that there was no power in an arbitrator to dismiss for want of prosecution was what he suggested was the different position of a respondent in an arbitration from that of a defendant in an action. He described the position of a defendant in an action as 'relatively privileged', because such a defendant could sit back, do nothing, and then apply to dismiss the action against him for want of prosecution. In the case of an arbitration Bridge J thought there was an obligation on both parties to enable the matter to be prepared for trial. Donaldson J ([1979] 3 All ER 194 at 199, [1979] 3 WLR 471 at 477–478) disagreed with this view, suggesting that save in what he called 'look-sniff' arbitrations, arbitrations and actions were indistinguishable in principle in their adversarial characteristics.

    Counsel for Raytheon submitted that on this issue Donaldson J was wrong and Bridge J was right and that arbitrations were inquisitorial rather than adversarial in their character. He relied on what he claimed to be the duty of an arbitrator to make his award promptly and referred to the penalties for which provision is made in s 13 of the Arbitration Act 1950 for the removal of an arbitrator from office and deprivation of remuneration. I think, with respect, this submission is without foundation. The subsection is dealing with an arbitrator who will not go forward when everyone wishes him to do so. But an arbitrator who insisted on proceeding against the wishes of the parties and attempted to make an award when they were not ready to proceed might at least in some cases find himself accused of misconduct.

    With great respect to any view of Bridge J, I find it difficult to distinguish between litigation and arbitrations on the grounds which he suggested. Both to my mind are essentially adversarial. Even in a case where each party has appointed an arbitrator and the arbitrators meet and agree on their award before appointing an umpire I think the proceedings can properly be characterised as adversarial. If the commercial judge tries an action in the Commercial Court, it is by concession an adversarial process. If he is invited and agrees to hear precisely the same dispute as an arbitrator or umpire under s 4 of the Administration of Justice Act 1970, I find it difficult to see how or why the whole character and quality of the proceedings suddenly changes. Indeed an arbitrator or umpire who, in the absence of express agreement that he should do so, attempted to conduct an arbitration along inquisitorial lines might expose himself to criticism and possible removal.

    On this point, therefore, I respectfully prefer the reasoning of Donaldson J to that of Bridge J. I take the view that almost all arbitration proceedings and certainly the instant arbitration proceedings were essentially adversarial in their character. As will appear later in this judgment, I do not think that a respondent in an arbitration is in an in any way different position from a defendant in an action. Neither is under any obligation to stir his adversary into action. The dictum which Donaldson J ([1979] 3 All ER 194 at 198, [1979] 3 WLR 471 at 476) quoted in his judgment about sleeping dogs seems to me to apply equally to sleeping claimants in an arbitration as to sleeping plaintiffs in an action.

    If Donaldson J's view that arbitrators do, with certain exceptions, possess all the powers of a court, were right, one wonders why the express powers listed in s 12(6) of the 1950 Act were necessary, since an arbitrator would already have possessed the greater number of these powers pursuant to some inherent powers vested in him.

    In support of Raytheon's appeal counsel advanced two further arguments, neither of which, he frankly admitted, had been advanced by counsel appearing for Raytheon before Donaldson J.

    The first was that even if the criticism of the first part of the judge's judgment were well-founded his conclusion could be supported on the ground that the position was different in the case of what counsel for Raytheon called an 'institutional' arbitration, by which phrase I understood him to mean an arbitration conducted in accordance with the rules of and under the supervision of some organisation of arbitration such as, in the Raytheon appeal, the International Chamber of Commerce ('ICC'), or perhaps the Institute of Arbitrators in this country. The second was that even if the three arbitrators appointed by the parties under the ICC rules had no jurisdiction to dismiss for want of prosecution nonetheless under those rules the respondents' remedy was to apply to the ICC 'Court of Arbitration', a body for which their rules make provision, for an appropriate order which he claimed that court could make under the rules. He relied in this connection on an affidavit by Dr Eisemann, a former Secretary-General of the Court of Arbitration of the ICC. To this affidavit the respondents replied with an affidavit from Dr Mann whose experience in the field of international arbitration requires no endorsement from this court. We admitted these affidavits notwithstanding formal objection from counsel for the Greggs.

    The arbitration clause in the contract concerned in the Raytheon appeal, which was dated 2 June 1970, will be found in cl 11 of that contract. It reads thus:

    'In the event that any dispute or controversy shall arise between the parties hereto, the same shall be resolved by arbitration in Geneva, Switzerland under the rules then prevailing of the International Chamber of Commerce. The laws of England and the laws of the State of Delaware shall be deemed equally applicable to this agreement and in the event of conflict between the two bodies of law the Arbitrator shall be free to apply whichever of the said laws will in his opinion most equitably secure the results contemplated herein. The decision of the Arbitrator(s) shall be final and binding upon both parties and judgment thereon may be entered in any court of competent jurisdiction.'

    Thus the originally intended place of arbitration was Geneva. But this was later changed to London by agreement between the parties and with the consent of the ICC. It was argued that this change cannot have been intended to import into the agreement to arbitrate all the striking-out procedure applicable to English High Court actions. Since I take the view that by English law an arbitrator has no such power, the interesting discussion we had on the extent of the applicability of the lex fori to arbitrations which is elaborated in Dr Mann's affidavit and also in an article he wrote, 'Lex Facit Arbitrium' in a presentation Book of Essays, 'Liber Amicorum', requires no further consideration.

    But I find it difficult to accept the distinction suggested by counsel for Raytheon between institutional and non-institutional arbitration, for which he claimed some support in a textbook entitled 'Handbook of Institutional Arbitration in International Trade' Cohn, Domke and Eisemann (eds) (1977). No doubt institutions concerned with furthering arbitration as a means of disposal of disputes seek emancipation from control of the courts of the countries where such arbitrations take place, perhaps in the belief that such freedom facilitates expedition of decision. Dr Mann's affidavit shows the limited success of such attempts and this court recently had to consider similar problems in relation to ICC arbitrations in Dalmia Dairy Industries Ltd v National Bank of Pakistan, to which frequent reference was made during the arguments. For my part, I am unable to accept that there can be any logical distinction between arbitrations of one kind and the other according to whether some label such as 'institutional' can be attached. In each case the relevant question is: on what terms and conditions have the parties agreed to go to arbitration? That question must be answered without regard to any attachment of suggested labels.

    Ultimately counsel for Raytheon did not argue that the three named arbitrators had power to dismiss for want of prosecution. But he contended that the respondents had pursued the wrong remedy and that to achieve their objective they should have applied, not to the arbitrators, nor to the courts of this country, but to the ICC Court of Arbitration. To some extent this submission overlaps with the question whether or not the court has power to grant and, if it has power, should grant an injunction, for clearly if an alternative remedy existed an English court would be less willing to grant a discretionary remedy such as an injunction.

    I therefore turn to the ICC rules. We are concerned with the 1955 edition, which were those in force at the date of the relevant contract. I think it is clear that for the purpose of the present proceedings we must interpret those rules in accordance with English principles of construction. There is no evidence that the law of Delaware is any different from our own. Section B(1) of those rules deals with the Court of Arbitration and arbitrators and arts 6 and 7 set out the method of appointment of and the functions of the Court of Arbitration. Article 13 gives further powers to the Court of Arbitration. Article 26 reads:

    'Before completing the awards the arbitrator will submit the same to the Court of Arbitration. The Court may lay down modifications as to its form and, if need be, draw the arbitrator's attention even to the points connected with the merits of the case, but with due regard to the arbitrator's liberty of decision. No award shall under any circumstances be issued until approved as to its form by the Court of Arbitration.'

    Article 31, much relied on by counsel for Raytheon, reads:

    'General rule. In any circumstances not specifically provided for above the Court of Arbitration and the arbitrator shall act on the basis of these rules and make their best efforts for the award to be enforceable at law.'

    In addition I should refer to arts 1, 2, 3 and 4 of the Statutes of the Court of Arbitration set out in an appendix.

    In para 40 of his affidavit Dr Eisemann claims that ICC arbitrations are more expeditious than others. I do not stop to consider whether this assertion would be universally accepted. Paragraph 37 of his affidavit states:

    'If the claimant were merely stalling for time, no extension would be granted and the claimant would be warned by the ICC Secretariat or the arbitrators on behalf of the Court of Arbitration that unless he remedied his dilatory conduct within a specified time the Court of Arbitration would treat his Request for Arbitration as withdrawn, settle the fees of the arbitrators and reimburse the deposit paid by the Respondents.'

    It is true that Dr Mann does not contradict this statement. Accepting therefore for present purposes that this is what does or may happen in practice, but construing the rules as a matter of English law, I feel bound to say that I see nothing in those rules which justifies such a course of action as a matter of contract. I derive some comfort for this conclusion from an article in the Handbook on Institutional Arbitration, to which I have already referred. In a passage dealing with ICC arbitration under the most recent rules (we were told that art 13 of the most recent rules is virtually identical with art 19 of the rules with which we are concerned), the writer says (Cohn, Domke and Eisemann (eds), Handbook of Institutional Arbitration in International Trade (1977) p 24):

    'The first of the "anti-frustrating" measures provided by the Rules are those which enable the preliminaries to the proceedings to go ahead, once certain time limits have been reached. The second is that provided in Article 13, where a party fails to cooperate in the definition of the precise limits of the dispute, and of the points on which the arbitrators are to rule. This obviously does not mean that there is any default procedure, since no party can ever be deprived of its right to defend its interest.'

    This passage hardly supports the submissions of counsel for Raytheon or suggests that Dr Eisemann's para 37 is justified by the rules, whatever may happen in practice. Moreover to my mind para 37 suggests something more akin to action of an administrative nature than to action with any contractual force or effect behind it. I am of the clear view therefore that the respondents could not have found any satisfactory remedy by application to the Court of Arbitration.

    Thus far I have reached these conclusions:

    1. There is no power in an arbitrator to dismiss an arbitration for want of prosecution. In this I respectfully disagree with Donaldson J and agree with Bridge J, though for reasons which I fear differ from his.

    2. The submissions of counsel for Raytheon regarding the possible distinction between 'institutional' and other arbitrations and especially his submission on the ICC rules regarding an application to the Court of Arbitration fail.

    3. It must follow that unless the court can interfere by injunction, as the judge has held, an aggrieved respondent in an arbitration is without remedy save himself to press the proceedings forward, which as a defendant in an action he would be under no obligation to do and which in an arbitration might well not be in his interest.

    Underlying the view of the judge that the court had power to interfere by injunction was the undoubted fact that the relationship between the parties to an arbitration agreement was a contractual one. An agreement to arbitrate might, like any other contract, be broken or become incapable of performance. If the particular breach in question took the form of repudiatory conduct, then there was no difference in principle between conduct evincing an intention not to perform an agreement to arbitrate and such conduct evincing an intention not to perform any other type of contract. Such conduct could be accepted by the innocent party as a repudiation and a claim to rescind would follow coupled with a claim for damages and an injunction where either or both of these were the appropriate remedies. Such an injunction could then be granted in support of the innocent party's contractual right to cancel.

    The judge further took the view that terms could be implied into an agreement to arbitrate as into any other contract. In addition to the implication, which I have for the reasons already given felt unable to accept, that parties to an arbitration impliedly clothe the arbitrators with jurisdiction to give effect to their rights and remedies to the same extent and in the same manner as a court, the judge also held that it was 'implicit' in, by which he meant an implied term of, an agreement to arbitrate that each party would use his reasonable endeavours to bring the matter to a speedy conclusion. In the light of the judge's findings of fact, he held that each of the appellants had been guilty of repudiatory conduct by failing to proceed with reasonable despatch, repudiatory conduct which each of the respondents was entitled to accept as bringing the agreement to arbitrate to an end.

    Counsel for Raytheon was quick to attack the implied term theory both in principle and in its application to the facts of these cases. In principle, he said, there was no need to imply any such term as being both reasonable and necessary in order to make the agreement to arbitrate work. The Arbitration Act 1950, like its predecessors, in the absence of any contrary agreement imported by statute certain implied terms into a submission to arbitration, for example s 12(1). There was therefore no need in order to make the agreement to arbitrate work to imply any other terms and no justification for so doing. Moreover, whereas in the Raytheon appeal the complaint was of delay in giving discovery, the respondents had ready to hand a statutory remedy by application to the High Court under s 12(6)(b), a submission much relied on by counsel for Raytheon in his argument on the facts that the respondents were responsible for much, if not all, of the delay by failing to pursue their statutory rights under that provision, as indeed they had indicated in correspondence at one time that they intended to do.

    Counsel for Raytheon also contended that the judge's implied term imposed an equal obligation on both parties to proceed with due diligence. Whatever might be said against the appellants in this connection, the respondents had equally done nothing and therefore were equally in breach of their obligation vis-à-vis the appellants, as the appellants were to the respondents, if the judge's implied term were correctly imported into the agreement to arbitrate. Counsel for Raytheon further argued that if a respondent in an arbitration did nothing, it was for the arbitration tribunal itself to get the arbitration moving, and that if a respondent did nothing to galvanise that tribunal into action, the respondent was without more ado acquiescing in the delay.

    Counsel for South India Shipping, however, did not adopt this part of the argument of Raytheon's counsel, contenting himself with the submission that there was no duty on either party or on the arbitration tribunal to move an arbitration forward. In addition, counsel for Raytheon argued that the respondents' submission and the judge's view that an agreement to arbitrate could be repudiated for breach of the implied term which the judge held to exist involved that the innocent party was purporting to revoke his submission to arbitration, which, counsel for Raytheon argued, he was not entitled to do without the leave of the court, in view of the provisions to s 1 of the Arbitration Act 1950. This further argument had not been advanced before the judge and we therefore do not know whether, had he thought this submission well-founded, he would have granted the necessary leave under that section. Both respondents before us sought and obtained leave to amend their writs to seek such leave if it should prove necessary. For my part, in the light of the judge's reasoning in his judgment, I feel little doubt that he would, if he had thought it necessary so to do, have granted leave to revoke.

    The submission that a term such as that which the judge held must be implied into this agreement to arbitrate was in the court below based on what in lawyers' shorthand is known as the Moorcock principles. Those principles were recently restated by the majority of this court in Liverpool City Council v Irwin, in terms later unanimously approved by the House of Lords. Counsel for Raytheon devoted the greater part of his attack on the implication made by the judge to showing that it was neither reasonable nor necessary to imply such a term so as to make this agreement to arbitrate work. This is, however, not the only basis on which a court will imply a term into a contract. As the House of Lords held in Liverpool City Council v Irwin, there are certain classes of contracts to which a court will, in the absence of agreement to the contrary, attach an implied term as a matter of law. Thus in that case the House of Lords held that the particular implied term there in question attached to the contract concerned, which was a contract for the letting of a flat, as a legal incident of that contract (see per Lord Wilberforce and per Lord Edmund-Davies ([1976] 2 All ER 39 at 44, 54–55, [1977] AC 239 at 254–255, 266–267)). There are plenty of other examples of the operation of this principle in the law of contract. For example, ss 13 and 14 of the Sale of Goods Act 1893, and s 39 of the Marine Insurance Act 1906 attach certain implied conditions to contracts of the particular class with which those two statutes are respectively concerned, and each of those statutory provisions merely reproduces the relevant antecedent common law.

    Sale of goods law, landlord and tenant law and marine insurance law are all part of our general law of contract. To each as to other types of contract the law will or may attach certain particular implied terms as legal incidents of the relevant contract. I see no reason in principle why contracts to refer disputes to arbitration should not also be treated as part of our general law of contract, be governed by the same legal principles and have attached to them where appropriate one or more implied terms as incidents of those particular contracts, those implied terms if necessary being in addition to those other implied terms for which the relevant legislation makes statutory provision.

    Counsel for Raytheon's attack on the implication into the agreement to arbitrate which the judge held to be correct has to my mind considerable force. Counsel for the Greggs found difficulty in supporting the judge's implied term. Adroitly he rested this part of his submission on a different basis. Founding himself on the decision in Universal Cargo Carriers Corpn v Citati, he argued that following the reasoning of the House of Lords in Liverpool City Council v Irwin there attached to this agreement to arbitrate and to other similar agreements as a legal incident of such agreements a duty not to be guilty of such delay as would frustrate the whole purpose of the arbitration in question. In the Citati case the delay which was ultimately held to be frustrating delay of a repudiatory character was the charterer's failure to load the ship within such time as did not wholly destroy the commercial purpose of the adventure so that the shipowner thereupon became entitled to throw up the charterparty by reason of the charterer's repudiatory conduct.

    By parity of reasoning counsel for the Greggs argued that a claimant in an arbitration who, like a plaintiff in an action, has the conduct of the case and who is guilty of prejudicial delay of such a kind as would, in an action, lead to that action being struck out by the court was equally guilty of frustrating delay of a repudiatory character, thus enabling the innocent party, the respondents in the Raytheon appeal, to rescind the agreement to arbitrate.

    This is indeed a formidable submission. As I have already said, agreements to arbitrate are but part of the general law of contract. The Citati doctrine is of general application. It is not limited to contracts of particular types. This court recently applied that same principle in Unitramp v Garnac Grain co Inc, The Hermine, a decision against which I understand the House of Lords has recently refused leave to appeal.

    Counsel for Raytheon sought to meet this argument by submitting that the Arbitration Act 1950 was a complete code and that therefore there was no justification for attaching by implication to any agreement to arbitrate any further legal obligations beyond those for which the statute provided, that such an agreement to arbitrate was not inefficacious or futile without making the implication, especially as the aggreived party could always invoke his statutory remedies and, in particular, in the Raytheon appeal, a remedy under s 12(6) from the court.

    The short answer to this submission seems to me to lie in the fact that it presupposes, contrary to my view, that a respondent in an arbitration is under some obligation to galvanise a dilatory claimant into action, for example by an appropriate application to the High Court under s 12(6) of the 1950 Act. In my view, for the reasons already given, a respondent is under no such obligation. He can sit back and wait. If this conclusion be right, I see little or no difficulty in attaching to an agreement to arbitrate as a legal incident of such a contract an implied obligation in point of law on the claimant who, like a plaintiff in the action, has the conduct of the case not to be guilty of such dilatory conduct in the prosecution of his claim as will defeat the whole purpose of the agreement to arbitrate by making a fair hearing before the arbitration tribunal impossible because of the lapse of time involved. This is merely another way of saying that a claimant must in such circumstances not be guilty of frustrating delay of a repudiatory character and it is difficult to think of a better example of frustrating delay of a repudiatory character than delay of such a kind as would in an action cause the High Court to strike out the action in its entirety for want of prosecution.

    Thus far I accept the judge's view that a term can properly be implied into the agreement to arbitrate which reflects what I regard as the obligation of a claimant not to delay the prosecution of his claim. But I venture to think that the correct basis for implying such a term is that which I have just stated rather than that which the judge adopted and that the correct implication is also that just stated rather than that suggested by the judge.

    In this connection it should be mentioned, as counsel for Bremer told us, that the suggestion of implying a term originally emanated from the judge during the hearing of the Bremer action and not from counsel arguing that case. Counsel for Bremer frankly admitted to us that he displayed little enthusiasm for the judge's suggestion when the judge first made it and the judge thereupon appeared to drop the suggestion (we have been shown the relevant extract from the transcript which contains the interchange between the judge and counsel for Bremer on this topic). But, during the subsequent hearing of the Raytheon case, the judge seemingly revived the idea and ultimately it has formed the basis of this part of his judgment.

    Counsel for Raytheon also argued that before the innocent party can treat delay of a repudiatory character as giving him the right to rescind the contract he must given the guilty party notice making time of the essence. No doubt in certain classes of contract, for example where an innocent party has allowed a guilty party to think that a specific obligation as to timeous performance will not insisted on, such a notice making time of the essence would be required and a failure to comply with that notice established before rescission could successfully be sought for non-compliance. But in my judgment the present is not such a case. The whole basis of the reasoning in the Citati case is inconsistent with this submission. The guilty party remains under a continuing obligation to prosecute his claim and there will come a time, not always very easy to determine in point of fact, when the innocent party can say to the guilty party, 'enough and no more', and rescind without giving the guilty party any further locus penitentiae. In my view, therefore, this further submission fails.

    As to the submission on s 1 of the Arbitration Act 1950, the short answer is that the rescission with which we are concerned is of the agreement to arbitrate, and not of the appointment of the arbitrators. It is, however, clear that logically the latter appointments must disappear as an inevitable consequence of the rescission of the agreement to arbitrate. Section 1 is only concerned with revocation of the appointment of an arbitrator and not with an agreement to arbitrate. I do not think the dictum of Denning LJ in Frota Nacional de Petroleiros v Skibsaktielskapet Thorsholm is any authority for the contrary view. That was a case where the arbitration in question was continuing. There was no suggestion in that case of a repudiation of the agreement to arbitrate. But even if I be wrong in the views I have just expressed and leave is required under s 1, I would unhesitatingly give such leave, as I feel reasonably certain that the judge would have done had this issue been raised before him. finally, on this branch of the case, counsel for Raytheon argued that there was no clear acceptance of the repudiation by the respondents for he contended that the writ treated the arbitrators as still having power to strike out and that therefore the declaration sought in the writ affirmed the agreement to arbitrate. I do not think this submission is sound; at best it is certainly highly technical. The writ claims an injunction on the footing that the agreement to arbitrate was not subsisting. The claim for a declaration was really no more than a claim for an alternative remedy, namely striking out by the arbitrators consequently on the rescission of the agreement to arbitrate.

    I now turn to the question whether the court has power to grant an injunction restraining the appellants from proceeding with the arbitrations. I approach this question on the basis that the respondents have established a right to rescind owing to frustrating delay which the respondents have exercised. Counsel for Raytheon argued that before s 5 of the Arbitration Act 1979 was enacted the court had no such power.

    It is true that such a power, if it exists, has never, at least in recent times, been exercised to restrain the prosecution of an arbitration in support of a claim that the arbitration agreement has been rescinded by repudiatory conduct of one of the parties to that agreement. But if the main submission of Raytheon's counsel be right and I am right in disagreeing with the judge's views that the arbitration tribunal itself has no power to strike out, it follows that there is no power anywhere to prevent a dilatory claimant guilty of frustrating delay from ultimately proceeding with his claim notwithstanding the impossibility of the issues between him and the respondent being fairly tried. This of course gives the claimant a grossly unfair advantage.

    Counsel for Raytheon argued that the cases where injunctions had been granted in connection with the prosecution of arbitrations fell into two classes: first, misconduct of the arbitrators, and, secondly, where there was a dispute whether a particular party was or was not a party to the agreement to arbitrate. He claimed that the respondents by their submissions were trying to add a third class to these two.

    In support of the first part of his suggested dichotomy he relied on a recent decision of this court, Japan Lines Ltd v Aggeliki Charis Compania Maritima SA, The Angelic Grace, where it was stated by Lord Denning MR that the High Court had juridiction to supervise the conduct of arbitrators in order to make sure that they were not guilty of 'real misconduct'. In support of the second part of his suggested dischotomy counsel for Raytheon relied on the decision of this court in Kitts v Moore, where this court granted an injunction to a plaintiff who sought to impeach an alleged agreement to arbitrate by alleging that he was not bound by it: see the judgments of Lindley and A L Smith LJJ ([1895] 1 QB 253 at 259–260, 262).

    In the present case it was urged there was no 'impeaching' of the agreement to arbitrate since it was admitted that initially each of the respondents had been bound by it. There was no suggestion that either agreement to arbitrate was void or voidable on the ground of fraud or mistake. Counsel for Raytheon relied on Den of Airlie Steamship Co v Mitsui & Co Ltd and British Oil and Coke Mills Ltd, as illustrating a case where a court would not grant an injunction to restrain a defendant from proceeding with an arbitration, saying that there was in such a case no initial impeaching of the agreement to arbitrate.

    In answer to these submissions counsel for the Greggs demonstrated, as he submitted, the development of the relevant equitable jurisdiction before the passing of the Supreme Court of Judicature Act 1873 by taking us through many 19th century authorities, not all of which were referred to before the judge. I do not propose to examine all these cases, in some of which injunctions were granted and in others injunctions were refused. I think reference to three of the cases only will suffice. First and foremost is Pickering v Cape Town Railway Co, a decision of Page Wood V-C later varied by Lord Cranworth LC. The Pickering case has had a curious history and we are indebted to counsel for the Greggs and his learned junior for having traced this history through. It was treated in the seventh edition of Russell on Arbitration ((1891) p 204) as authority for the proposition that 'Parties, however, sometimes conduct themselves in such a manner as to induce the Court of Chancery to restrain them from proceeding in a reference'. That passage and the relevant reference to the Pickering case was, however, later dropped in subsequent editions of Russell on Arbitration and the case is not mentioned in the current (19th Edn (1977)) or indeed any recent edition of that work. It is however cited in Halsbury's Laws of England (24 Halsbury's Laws (4th Edn) para 1038) as authority for the proposition that—

    'The Court has jurisdiction to interfere in arbitration proceedings on equitable grounds where the parties have by their conduct excluded themselves from the benefit of their contract to arbitrate.'

    In Pickering's case there was a contract between the plaintiffs and the defendants for the building of a railway in the former Cape Colony. That contract contained an arbitration clause and a certain Mr Hawkshaw was appointed what was called 'standing referee'. Disputes arose and the defendants then resorted to the Supreme Court of the Cape Colony to eject the plaintiff from the site. Later the defendants sought to insist on their right to go to arbitration in respect of matters arising from the plaintiff's ejection from the site. The plaintiff sought and obtained from Page Wood V-C an injunction restraining the arbitrator from proceeding to make an award. Page Wood V-C stated the position thus (LR 1 Eq 84 at 87–88):

    'We have nothing in this Court in the nature of a writ of prohibition authorizing the Court to proceed against an arbitrator, and the only jurisdiction that exists to stop the proceedings before arbitration is founded upon the conduct of the parties. If, for example, Defendants are seeking to enforce certain rights which they conceive they are entitled to exercise under a deed for submission to a reference, and the Court should be of opinion that they have debarred themselves from exercising those rights by the course of conduct which they have adopted, there arises an equity, which prevents them from prosecuting proceedings, however they might otherwise be entitled to do so under the particular jurisdiction which is beyond the control of this Court.'

    Lord Cranworth LC subsequently discharged this injunction (LR 1 Eq 84 at 89–90). As I read the very brief report (LR 1 Eq 84 at 89–90) of Lord Cranworth LC's judgment, he discharged the injunction because it had in his opinion been premature to grant it before the relevant facts had been fully ascertained. It is important to note that Lord Cranworth LC is reported as having said ((1865) LR 1 Eq 84 at 89–90):

    'The Vice-Chancellor might have come to a correct conclusion as to the parties having by their conduct excluded themselves from the benefit of their contract to arbitrate, but his Lordship could not see his way to that conclusion until the cause was heard.'

    I do not read this passage as disagreeing with Page Wood V-C's statement of basic principle on which the Court of Chancery would proceed in granting relief to a plaintiff seeking to restrain a defendant from proceeding with an arbitration under an arbitration clause.

    Counsel for Raytheon strongly argued that the Pickering case (LR 1 Eq 84) was no authority for the proposition that the court could or would interfere with an arbitration because owing to delay a fair trial was no longer possible. Pickering (LR 1 Eq 84) was, he said, a case where the agreement to arbitrate had been impeached. He reinforced this submission that Pickering (LR 1 Eq 84) was no authority for the wider proposition by urging that nothing could be more unfair than an arbitrator whose award could be shown to have proceeded on a wrong view of either of the facts or the law or both. Yet there was ample authority in such cases that the court would not interfere. If, therefore, before 1979 the case did not come within s 12(6) of the 1950 Act, no one had power to interfere.

    I shall return to this submission later, but it will be convenient next to consider the two other principal cases. In Beddow v Beddow Jessel MR enjoined an arbitrator from acting because of his own unfitness. This case on its facts, of course, falls comfortably within counsel for Raytheon's first category. But Jessel MR said (9 Ch D 89 at 93):

    '… it appears to me that the only limit to my power of granting an injunction is whether I can properly do so. For that is what it amounts to. In my opinion, having regard to these two Acts of Parliament, I have unlimited power to grant an injunction in any case where it would be right or just to do so: and what is right or just must be decided, not by the caprice of the Judge, but according to sufficient legal reasons or on settled legal principles.'

    In the third and last of these cases, North London Railway Co v Great Northern Railway Co, this court refused to grant an injunction where the plaintiff asserted that the arbitrator had no jurisdiction to hear the dispute. The court, after considering the judgment of Jessel MR in Beddow v Beddow, held that it had no jurisdiction to grant the injunction sought because if there were no jurisdiction in the arbitrator to hear and determine the arbitration there would be no legal injury and no legal right in the plaintiff which he was entitled to protect by injunction (see the judgments of Brett and Cotton LJJ (11 QBD 30 at 35–36, 40–41)). Cotton LJ pointed out that Beddow v Beddow proceeded on the basis that the plaintiff had a legal and equitable right to protect by injunction.

    At the present day the problem to which North London Railway Co v Great Northern Railway Co gave rise could, and no doubt would, be swiftly solved by an action for a declaration that the arbitrator had no jurisdiction. The North London Railway case clearly troubled the judge. I do not think the North London Railway case decides more than, as is indeed clear law, that the court will not grant an injunction save in support of some legal or equitable right: see the recent restatement of this principle by Lord Diplock in The Siskina ([1977] 3 All ER 803 at 824, [1979] AC 210 at 256). Lord Diplock in that passage appears to treat this as the ratio decidendi of the North London Railway case. Curiously enough it does not seem to have been argued in that case that the plaintiffs had a legal or equitable right to be protected by injunction against wasted costs in an arbitration in which such costs would be irrecoverable if the arbitrator had no power to determine the dispute. He would indeed be a brave lawyer who, where a problem of this kind arises, advises his clients that they can safely stay away from such an arbitration and risk the arbitrator deciding the issue of jurisdiction against them merely in order to save costs which might prove to be irrecoverable.

    There is always a tendency where courts, whether of equity or of common law, possess some power whether equitable, at common law or by statute and over a long period of time can be shown to have exercised or refused to exercise that power in widely differing cases to seek to group those cases and to categorise them and then, having drawn up those categories, to limit the exercise of those powers to such cases and to contend that there is no wider power which may be exercised in other cases which do not fall within those categories. With respect, I think this is the basic fallacy which underlies counsel for Raytheon's suggested dichotomy. No doubt many of the cases I have referred to and others to which we wre referred in argument and which were also referred to by Donaldson J in his judgment can be grouped or categorised as counsel for Raytheon suggests. But to accept that grouping or categorisation is not to say that every future case must fall within such a group or category before such an injunction can be granted. Equity has never proceeded along tramlines. In the instant case, as already stated, the respondents have in my view a legal right to rescind the arbitration agreement. They also have a right, whether it be called an equitable right does not matter, to a fair hearing before the arbitration tribunal. The appellants' conduct has led to their having acquired this legal right to rescind. Their right to a fair hearing cannot now be fulfilled because of the appellants' conduct.

    Why then, when there is no other remedy available, should the court not interfere and protect both those rights by injunction? Without an injunction the appellants can go on with the hearing which ex hypothesi cannot be fair to the respondents.

    I think, therefore, that the judge was entirely right to grant the injunctions in both these cases. It would in my judgment be a lamentable gap in our jurisprudence were claimants in arbitration to be preferred to plaintiffs in litigation, as would be the case if the judge were wrong in that they can drag out arbitrations indefinitely, being arbitrations to which the 1979 Act does not apply, without any penalty being imposed on them.

    That leaves the question of damages. This only arises in the Raytheon appeal. The respondents claim as damages their wasted expenditure and the judge ordered the quantum of such damage to be assessed by a taxing master. Counsel for Raytheon argued that the respondents were not entitled to damages unless they could show that they would have, or at least had stood, a good chance of winning the arbitration. I do not think this submission is well founded. In some cases, for example, an action for negligence against solicitors may require proof of the prospect of success as an essential prerequisite of a successful claim for damages for what would have been gained in the action which the solicitors have negligently failed to bring is the measure of the plaintiff's loss in his action for negligence. But the question in the Raytheon appeal is: what loss or damage flows naturally and directly from the appellants' repudiatory conduct? My answer is that the damage which flows naturally and directly from their breach is the wasted expenditure which has been incurred by the appellants to no useful purpose because of the determination of the arbitration by rescission of the agreement to arbitrate and by the injunction. In reaching this conclusion I have not lost sight of the dictum of Lord Macmillan in Heyman v Darwins Ltd ([1942] 1 All ER 337 at 347, [1942] AC 356 at 374) that the remedy for breach of an agreement to arbitrate is enforcement and not damages. That statement, however, must be read in its context and not divorced from it. Lord Macmillan was not intending to override the earlier decisions to which I have already referred which emphasise the contractual character of an agreement to arbitrate, a breach of which can in certain circumstances give rise to a claim for damages. In my judgment, therefore, the respondents in the Raytheon appeal are entitled to damages on the basis determined by the judge.

    It remains to mention two other matters for the sake of completeness. The first is a submission which counsel for Raytheon sought to raise for the first time in this court. There were, he correctly pointed out, only three respondents in the Raytheon appeal who were the three plaintiffs in the original action. But when one looks at cl 9 of the agreement between the appellants and the respondents one finds that the indemnity on which the appellants sought to rely in the arbitration was jointly and severally given by four persons, the fourth being a Mr Teasdale. Mr Teasdale was not a plaintiff in the proceedings presently before the court and is not a respondent to this appeal. Therefore, argued counsel for Raytheon, the respondents' cause of action was incomplete without Mr Teasdale being joined either as a plaintiff or as a defendant. This became known as the 'Teasdale point'. Mr Teasdale unfortunately is an undischarged bankrupt. Naturally his trustee in bankruptcy is interested as to any terms on which leave to join Mr Teasdale might be granted. Since this was a new point taken for the first time in this court, counsel for Raytheon could only take it with leave and we were only prepared to grant such leave on terms which counsel for Raytheon declined to accept. The Teasdale point, therefore, disappears.

    The second matter was raised by counsel for South India Shipping. He sought to introduce for the first time in this court controversial evidence as to German law on the implication of terms into contracts of which German law is the proper law. Since it seemed to us that it would be impossible to resolve this issue even if it be relevant, as to which I express no opinion, without hearing the expert witnesses cross-examined, we declined to allow the matter to be raised for the first time before us. Clearly, if this were intended to be raised as an issue in these proceedings, the matter ought to have been investigated before Donaldson J so that he might make his findings of fact on the disputed questions of German law which would be available for us. We therefore declined to allow this matter to be raised.

    In the result, for the reasons which I have given, I would dismiss both appeals. I would venture to add this. In the addendum to this judgment Lord Denning MR has referred to the position of a respondent who was guilty of inordinate and frustrating delay as were the plaintiffs in the present two cases. I prefer to express no view as to the position which might arise in that event, which does not now arise for decision and was not presented in argument before us.


    I agree that both appeals should be dismissed on the grounds stated by Lord Denning MR and Roskill LJ. I take the same view as Roskill LJ of North London Railway Co v Great Northern Railway Co. The power to intervene by injunction only falls to be exercised in support of a legal or equitable right as stated by Lord Diplock in The Siskina ([1977] 3 All ER 803 at 824, [1979] AC 210 at 256), and the respondents in each case have established a legal right to accept the repudiation of the arbitration agreements arising from the repudiatory conduct of the appellants. The decision of Page Wood V-C in Pickering v Cape Town Railway Co is correctly stated in Halsbury's Laws of England (24 Halsbury's Laws (4th Edn) para 1038) as authority for the proposition quoted in the judgments which have just been delivered. The fact that the courts have not been asked before to intervene by injunction in a case of repudiatory delay is explained by the history of the procedural remedy of striking out an action at law for want of prosecution.

    A new chapter began with Allen v Sir Alfred McAlpine & Sons Ltd. The principles which were therein explained and applied are as relevant to proceedings taken pursuant to an agreement to arbitrate as to proceedings at law.

    Appeals dismissed. Leave to appeal to the House of Lords.

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