KluwerArbitration
Document information
Publication
Yearbook Commercial
Arbitration 2002 - Volume
XXVII
Jurisdiction
Norway
Court
Court of Appeal of
Hålogaland
Case date
16 August 1999
Parties
Appellant, Charterer
Appellee, Shipowner
Key words
E mails do not constitute
arbitration agreement “in
writing”
requirement to submit
arbitration agreement not
satisfied by E mail
Applicable legislation
New York Convention, 1958
Articles
V(1)(a)
Commentary Cases
¶504
Publication Source
Stockholm Arbitration
Report (1999, no. 2) pp. 121
127 with note Gunnar
Nerdrum, pp. 127 129
Bibliographic reference
'Norway No. 1, Charterer v.
Shipowner, Hålogaland Court
of Appeal, 16 August 1999', in
Albert Jan van den Berg (ed),
© 2019 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
Norway No. 1, Charterer v. Shipowner, Hålogaland Court of
Appeal, 16 August 1999
Facts
Appellant, a Norwegian businessman, sought to charter a vessel to ship herring to Ukraine.
His broker in St. Petersburg contacted a broker in Limassol, Cyprus, who presented a vessel
belonging to the Russian owner. On 4 December 1997, the two brokers discussed various
relevant questions by E mail, using a GENCON charterparty as the basis of their
discussions. As far as the brokers were concerned, all questions were resolved by the end of
that day. The Norwegian charterer's broker wrote that evening to the owner's broker in
Limassol confirming acceptance of the last contested point and added:
“So we clean fixed. Awaiting C/P. Thank you for fixture.“
P 519
P 520
The owner”s broker replied:
“Thanks for confirmation as well. Suppose it's first one of ours which have done via E mail.
Just imagine how much we saved on tlsx/faxes!!!
“Although the C/P should be done by you (as per rules because you're chrs'brokers) but
keeping in mind that You have a lot of things to be done will do it tomorrow.”
A draft charterparty on the GENCON form had previously been set out with some omissions
and amendments. The shipowner's broker then issued a charterparty based on the draft,
incorporating the subsequent amendments from the E mail exchanges and signed it “on
behalf of the Owners“. Neither the charterer”s broker, nor the charterer produced a similar
signature.
A dispute arose between the shipowner and the charterer regarding the charter, and the
shipowner commenced arbitration in London according to the arbitration clause in the
GENCON charterparty. The charterer denied the jurisdiction of any arbitral body and did
not participate in the ensuing arbitration.
In his award, the arbitrator referred to the E mail exchange between the brokers, finding
that a contract containing an arbitration clause had been entered into. The fact that no
charterparty was signed on paper was unimportant as this was often the case when vessels
were chartered. He held that the charterer was in breach of the contract and awarded the
shipowner US$ 176,647.76, as claimed.
The shipowner sought to enforce the award in Norway at the District Court of Lofoten. The
charterer objected that there was no agreement “in writing” as he had not signed anything,
nor given instruction to the broker, nor given the broker a power of attorney.
The district court first found that the 1958 New York Convention applied and that it formed
the general basis for enforcement of an arbitral award as required by the Execution Act.
Both Norway and England had ratified the Convention. In applying the Convention, the
court found that Art. II of the Convention governs the question of which dispute resolution
body is to decide the dispute in first instance. Further, the requirement of the written form
in Art. II could not be used as an argument to deny enforcement of an arbitration
agreement. Once the arbitral tribunal had decided that an arbitration agreement existed
between the parties, it follows from Art. III of the Convention that a Contracting State
should recognize the award as binding and enforce it subject to the subsequent articles. In
P 520 the view of the district court, by producing the E mails and charterparty, which, according
P 521 to the arbitral award, constituted an agreement between them, the parties had fulfilled
the requirement of Art. IV to produce the arbitration agreement. The district court also
rejected respondent's argument to apply Art. V(1)(c) to the case where it was argued that no
agreed arbitration clause existed. Moreover, the ground for refusal of enforcement of lack
of proper notice stipulated in Art. V(1)(b) was not accepted as the respondent had been
notified many times of the proceedings and the arbitrator was entitled to make a default
award. Accordingly, there was no reason under the Convention to refuse to enforce the
award. Nor was there a ground under Sect. 4 2, first paragraph under (b) of the Execution
Act as the further objections were untimely and should have been raised in the arbitration.
The Hålogaland Court of Appeal reversed the decision of the lower court, finding that the
parties had not produced “the original agreement referred to in article II or a duly
certified copy thereof”. In doing so it reasoned that it was necessary to assess whether the
requirements of Art. II of the Convention had been complied with. This assessment was to
be done by the enforcement court and need not coincide with the question of the
jurisdiction of the arbitrator.
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Yearbook Commercial
Arbitration 2002 - Volume
XXVII, Yearbook Commercial
Arbitration, Volume 27
(© Kluwer Law International;
Kluwer Law International
2002) pp. 519 - 523
P 521
P 522 [4] “The English arbitrator was presented with a “draft copy” of a charterparty,
P 522
P 523 [7] “Consequently, there is no common basis for enforcement according to the
P 523
© 2019 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
Excerpt
[1] “According to the Civil Procedure Act, Sect. 168 in conjunction with Sect. 169, it can be
agreed by treaty with a foreign state that foreign arbitral awards on civil claims shall have
a binding effect in Norway, if recognition is not contrary to the public order or Norwegian
binding legal provisions. The said article is supplemented, e.g., by the Enforcement Act,
Sect. 4 1, letter f stating that a foreign arbitral award is to be considered a general basis of
enforcement in the event that, according to a treaty with a foreign state, it will be binding
and subject to enforcement in Norway.
[2] The New York Convention of 10 June 1958 on the recognition and enforcement of foreign
arbitral awards, is such a convention as is mentioned in the Execution Act, Sect. 4 1, letter
f, and has been ratified by Norway and England.
[3] “According to Art. II(1) of the Convention, each of the contracting states shall recognise
an agreement in writing where the parties have referred disputes which arose to
arbitration. With the expression “agreement in writing”, the Convention has in mind an
arbitration clause in a contract or an arbitration agreement, signed by the parties or
contained in an exchange of letters or telegrams.
unsigned,
and eleven E mail transcripts that had been exchanged between the brokers. The
arbitrator held that the companies acted as brokers on behalf of the parties during the
negotiations on the charterparty. On the basis of the available documentation, the
arbitrator held that arbitration shall take place in London, and that English law is to be
applied. The award further states that the respondent (appellant) received a number of
orders from the arbitrator to make observations on the merits, together with information
regarding the consequences of not giving an answer. The respondent (appellant) does not
dispute that these orders were effectively received, but respondent (appellant) has
nevertheless not reacted upon them.
[5] “The arbitrator has accordingly regarded himself competent to try the case, and after a
closer consideration of the merits of the case, come to the conclusion that a charterparty
really was entered into between the parties according to English law. This does not mean,
however, that the requirements of the Convention are satisfied. The arbitrator has not
assessed whether Art. II of the Convention is satisfied, and he has probably not had any
reason to do so. It follows from Art. IV(1)(b) that a party, who wants to enforce a foreign
arbitral award, shall produce “the original agreement referred to in article II or a duly
certified copy thereof”. The provision does not state expressly that the local enforcement
authority shall verify that the agreement satisfied the requirements of Art. II, but the Court
of Appeal is of the opinion that it should be interpreted this way. The requirements in Art.
IV(1)(b) in conjunction with Art. II relating to the form of the arbitral agreement, are
justified by basic considerations for legal protection. It should not be sufficient for
enforcement that the arbitral award is valid according to the law of the country in
question. Also the requirements of the Convention should be assessed to ensure they have
been complied with. This assessment is to be done by the local enforcement authority, and
it need not coincide with the question of the competence of the arbitrator according to his
domestic law.
[6] “In this case there is no express arbitral clause signed by the two parties. The Court of
Appeal expresses doubt regarding the issue as to whether the existing E mail transcripts
can be held to fall within the definition in Art. II(2), but under no circumstances can it be
asserted that these transcripts contain an agreed arbitration clause. The contents of the E
mails appear obscure and incomplete and reflect just fragments of an agreement. There is
no written power of attorney from the presumed principals either. The basic requirements
of legal protection set up by the Convention Art. II in conjunction with Art. IV(1)(b), for
recognition and enforcement are hereby not satisfied.
Execution
Act, Sect. 4 1, second paragraph, letter f, and the request for enforcement is therefore
dismissed.”
(....)
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© 2019 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.