Section 44 of the Arbitration Act Does not Support Order for Inspection and Testing prior to Delivery of Goods

Tsakos Shipping and Trading SA v Orizon Tanker Co Ltd ('The Centaurus Mar'), QBD (Comm Ct),NLD 29th April 1998

Commentary

The decision appears to have been driven by two main considerations. Firstly, that the relief sought went beyond the preservation of evidence and that the evidence could just as well have been preserved after delivery and, secondly, that it affected the parties contractual rights.

Decision

The court found that the powers under Section 44 of the Arbitration Act 1996 did not go further than those available under RSC Ord 29 rules 1 and 2 and that the buyers could not refer the court to any instance of such a remedy having been granted in similar circumstances before. Granting the relief sought would in effect have amounted to a rewriting of the parties contract, which contained carefully balanced provisions for the inspection, dry-docking and condition on delivery of the vessel, with which the court should be slow to interfere, in particular on an ex parte basis.

Background

The parties entered into a contract for the sale of the vessel in a memorandum of agreement containing an arbitration clause. The buyers thought that the condition of the vessel’s engines did not comply with the terms of the memorandum of sale and obtained an order under Section 44 of the Arbitration Act 1996 permitting them to test and inspect the vessel in the presence of are presentative from the vessel’s classification society. The sellers applied inter partes seeking the discharge of the order.

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