Sopers Hole Corporation Ltd v Sandstorm (Virgin Islands Ltd)

• Jurisdiction: British Virgin Islands
• Court: Court of Appeal (British Virgin Islands)
• Judge: Robotham, J.A.
• Judgment Date: 08 October 1984
• Neutral Citation: VG 1984 CA 3
• Docket Number: Civil Appeal No. 3 of 1983
• Date: 08 October 1984

Court of Appeal

Berridge, C.J. (Actg.), Robotham, J.A. (Actg.)

Civil Appeal No. 3 of 1983

Sopers Hole Corp. Ltd.

and

Sandstorm (Virgin Islands Ltd.)

Appearances:-

F.S. Ramsahoye Q.C. and E.A.C. Hewlett for the appellant.

J.S. Archibald Q.C, and G. Farrara for the respondent.

Arbitration - Award — Amendment.

Arbitration - Award — Uncertainty.

Facts: There was an agreement between the parties that for a consideration the plaintiff company would undertake to carry out certain dredging works for the defendant company. It was further agreed to refer the dispute or difference as to rights, duties or obligations to arbitration in accordance with the Arbitration Ordinance, 1976. The parties agreed to submit certain matters to arbitration. An award was made by the arbitrators and umpire appointed by the parties. The award was delivered to the respondent company. The trial judge granted the respondent leave to enforce the award in reduced sum.

Facts: There was an agreement between the parties that for a consideration the plaintiff company would undertake to carry out certain dredging works for the defendant company. It was further agreed to refer the dispute or difference as to rights, duties or obligations to arbitration in accordance with Arbitration Ordinance, 1976. The parties agreed to submit certain matters to arbitration and appointed two arbitrators and an umpire. The arbitrations failed to agree on three of the four issues referred to them. No written notice of disagreement was served upon the umpire. The umpire signed the award jointly with arbitrators.

Held: The judge had no power to amend the award. Appeal allowed.

Held: The award was nullity. It was bad on its face for being a joint award, since the umpire was to enter upon a reference in lieu of the arbitrators. The award was uncertain and inconsistent. Appeal allowed.

Robotham, J.A.

1 This is an appeal brought by Sopers Hole Corporation Ltd. in respect of an arbitration award of $784,000.00 made against them in favour of the respondent, Sandstorm (Virgin Islands) Ltd., leave to enforce which was granted by a judge of the High Court in the reduced sum of $552,000.00 in accordance with section 28 of the Arbitration Ordinance of the British Virgin Islands No. 7 of 1976, hereinafter called the Ordinance.

2 Sopers Hole Corporation Ltd., a company incorporated in the Virgin Islands, was on May 21, 1979 granted by the Government of the British Virgin Islands dredging rights in reclaiming certain land from the sea at Sopers Hole. In the exercise of these rights, the Corporation entered into an agreement with the respondents Sandstorm Ltd., whereby they would undertake the actual dredging works.

The Agreements - Dredging - Arbitration

3 Under clause 1 of the dredging agreement, Sandstorm in consideration of the sum of $900,000.00 would dredge 300,000 cubic yards of dry measure sand from the prescribed area of the seabed and foreshore at Sopers Hole, in consideration of their being paid $3.00 per cubic yard. This work under clause 2 was to commence on July 1, 1981 and was to continue as continuously and expeditiously as possible, towards a completion date of February 28, 1982. Clauses 3 and 4 dealt with the method of payment. Clauses 5 and 6 contained covenants given by Sandstorm and Sopers Hole Corporation respectively.

4 It was expressly agreed and declared under clauses 7(b) and (c) that the quantification of the amount of sand to be dredged under the contract was based solely on engineering survey and data compiled by the Corporation, and that in the event of there being less than 300,000 cubic yards of send available for dredging, such a short fall would not constitute a breach of the contract to dredge. Rather, in such a case, it was further agreed under clause 7(c) that Sandstorm would be entitled to payment of the contract sum (which would be 300,000 $3 - $900,000.00) as if the dredging works had been carried out in full. A substantial part of this appeal is centered around these 2 clauses. For the purposes of this appeal, the next relevant clauses are 7(e) and 7(g). Under clause 7(e) the Corporation agreed that in the event of the dredge becoming idle due either to no area being made available by them to Sandstorm for dredging, or to any act or default on their part, then they would pay to Sandstorm, in addition to the contracted installment payments under clause 3 compensation at an agreed rate of $1,000.00 per day for each day the dredge remained idle. On the other hand under clause 7(g) in the event of Sandstorm failing to complete the dredging works as contracted for under clause. 2, then they would pay to Sopers Hole Corporation compensation at an agreed rate of $1,000.00 per day for each day the work remained uncompleted.

5 Clause 7(h) provided that the mount of sand dredged at any given time was to be computed dry measure determined by an independent person to be agreed between the parties.

6 A dispute having arisen between them, it was agreed to refer the matter to be determined by arbitration in accordance with clause 9. This clause stated that the matter should be determined “in accordance with the Arbitration Ordinance of the British Virgin Islands or any other arbitration law fox the time being in force in the British Virgin Islands. (This only meant that the matter fell to be determined in accordance with the Ordinance No. 7 of 1976.

7 Under the Arbitration Agreement dated August 26, 1982 Cyril Brantford Romney M.A., J.P., Clive A. Sears F.R.I.C.S., both of Road Town Tortola were appointed arbitrators, and Elihu Rhymer M.A. also of Road Town was appointed umpire:–

“Subject to the provisions of the Arbitration Ordinance 1976 (No. 7 of 1976) of the Laws of B.V.I. save in so far as they are varied by agreement.”

8 One of the matters which will fall to be considered is whether or not the arbitration agreement contained any such variation. Counsel for the respondent argued that there was, whereas counsel for the appellant submitted that it was a straight reference under section 10(2) of the Ordinance. It is therefore expedient at this stage to set out the clauses in the agreement from which it was being urged that such a variation was to be extracted. They follow immediately upon the appointment of the arbitrators and the umpire and read as follows:–

• (2) The said umpire shall be at liberty to sit with the said arbitrators and hear all the evidence in conjunction with there before the matters in dispute shall have been referred to him, and the said umpire mar base his award upon such evidence.

• (3) The said arbitrators OR the said umpire as the case may be shall make the award on or before the 30th day of September 1982 or within such extended time not exceeding fourteen days.

9 Counsel for the appellant centered his arguments around the fact that it was an unencumbered and simple reference under section 10(2) of the Ordinance, and this he submitted was in accordance with the agreement of the parties. Not only was it set out clearly in the arbitration reference, but it had previously been agreed under clause 9 of the dredging contract that any dispute was to be determined in accordance with the Ordinance. An express statutory provision of the Ordinance was breached he said when upon the arbitrators failing to agree on three of the four issues referred to them, the umpire entered upon the reference without any written notice of the disagreement being served upon him. The matter was further compounded by the umpire signing an award jointly with the arbitrators. These points will be further dealt with but for the moment, we should now look at the teams of Section 10(2).

10

(2) Unless a contrary intention is expressed therein every arbitration agreement shall, where such a provision is applicable to the reference be deemed to include a provision that if the Arbitrators have delivered to arty party to the arbitration agreement, or to the umpire, a notice in writing stating that they cannot agree, the umpire may forthwith enter upon the reference in lieu of the arbitrators, as if he were the sole arbitrator.

10 This provision is similar in every respect to section 8(2) of the English Arbitration Act, 1950, 14 Geo. 6 Chapter 27, save for the addition in the Ordinance of the final words “as if he were the sole arbitrator. (In my view however, these words amount to no more then words of emphasis. The position remains the same as under the English Act. It is that where after disagreement an umpire enters upon a reference in lieu of the arbitrators, all the matters referred fall to be decided by him and not merely those in respect of which the arbitrators have disagreed - ( Cerrito v. North Eastern Timber Importers (1952) 1 Lloyds Reports 330).

11 I will now turn to the terms of reference as set out in the arbitration agreement dated August 26, 1982. The ratters referred were recited in clauses 11912 13 and 14. These must be reproduced in full so as not to sacrifice clarity for the sake of brevity.

Clause 11 a reads:-

Sandstorm claims to have carried out the dredging works in full by dredging all the sand available for dredging under the Agreement, and as permitted by Sopers Hole Corporation through its Director Mr. Randolph Malone on site, and that the 300,000 cubic yards requirement in Clause 1 of the Agreement is satisfied in fact under clause 7(b) and 7(c) of the Agreement, and that it has therefore fulfilled all its obligations under the Agreement.

11(b):- Sopers Hale Corporation claims that Sandstorm has failed to dredge 300,000 cubic yards dry measure of sand under clause 1 of the agreement and is therefore in breach of its obligations under the Agreement.

Clause 12(a):-

Sopers Hale Corporation contends that Sandstorm has dredged no more: than 81, 362 cubic yards of sand according to the findings set forth in writing on April 22v 1982 by the...