[HOUSE OF LORDS]

AND

Arbitration - Arbitrator - Jurisdiction - Inordinate and inexcusable delay in prosecution of claim - Whether jurisdiction in arbitrator to dismiss claim for want of prosecution - Whether jurisdiction in court to restrain claimant from proceeding in arbitration - Parties' obligation to prevent inordinate delay - Duty to apply to arbitrator

Injunction - Jurisdiction to grant - Arbitration proceedings - Inordinate and inexcusable delay in prosecution of claim - Whether claimant under duty not to so delay - Court's jurisdiction to restrain party continuing with arbitration for repudiatory breach of arbitration agreement

The plaintiffs were respondents to an arbitration commenced by the defendants, in which they claimed to have been seriously prejudiced by the inordinate and inexcusable delay of the defendants in prosecuting the arbitration. The plaintiffs issued a writ seeking injunctions restraining the defendants from continuing with the arbitration and a declaration that the arbitrator had power to strike out the defendants' claims for want of prosecution. The judge found that delay in prosecuting the arbitrations by the defendants was such that had their claim been the subject matter of litigation the court would have dismissed them for want of prosecution, and he granted the injunction sought on the ground that such conduct constituted a repudiatory breach of the agreement to submit the dispute to arbitration. The judge further held that, unless the parties to an arbitration agreed to curtail the arbitrator's jurisdiction, an arbitrator had the same power as the court to dismiss a claim for want of prosecution.

The Court of Appeal, dismissing the defendants' appeal, held that the claimants in an arbitration were under a duty not to delay the presentation of their claim so as to frustrate the purpose of the arbitration, that the plaintiffs were entitled to treat the defendants' conduct as a repudiation of the arbitration agreement and, as they had elected to rescind it, the court should grant the injunction.

On appeal: -

Held, allowing the appeal, that the High Court had no inherent jurisdiction to supervise the conduct of arbitrators analogous to its power to control inferior tribunals, and its power to grant injunctions arose from the existence of a right to be enforced or protected, so that when there was a repudiatory breach of an arbitration agreement the innocent party, having elected to treat the contract as at an end, could obtain an injunction to restrain the party in default from proceeding with the arbitration; but (Lord Fraser of Tullybelton and Lord Scarman dissenting), since the parties were equally under an obligation to keep the procedure moving, both were under an obligation to apply to the arbitrator to prevent inordinate delay and, since the plaintiffs had made no such application, they were not entitled to rely on the defendants' breach as giving them the right to treat the agreement as at an end (post, pp. 978E-H, 979D-F, 980G - 981B, 982C-E, 986B-D,987G - 988A, A-B, 992F-G, 993B-C, H, 997B-C, F-G, G - 998A v,999F-H).

Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229, C.A. explained.

Decision of the Court of Appeal (post, p. 933E-F); [1980] 2 W.L.R. 905; [1980] 1 All E.R. 420 reversed.

The following cases are referred to in their Lordships' opinions in the House of Lords:

Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229; [1968] 2 W.L.R. 366; [1968] 1 All E.R. 543, C.A.

Beddow v. Beddow (1878) 9 Ch.D. 89.

Birkett v. James [1978] A.C. 297; [1977] 3 W.L.R. 38; [1977] 2 All E.R. 801, C.A. and H.L.(E.).

Congimex S.A.R.L. v. Continental Grain Export Corporation [1979] 2 Lloyd's Rep. 346, Donaldson J. and C.A.

Crawford v. A. E. A. Prowting Ltd. [1973] Q.B. 1; [1972] 2 W.L.R. 749; [1972] 1 All E.R. 1199.

Czarnikow v. Roth, Schmidt and Co. [1922] 2 K.B. 478, C.A.

Glasgow and South-Western Railway Co. v. Boyd & Forrest, 1918 S.C. (H.L.) 14, H.L.(Sc.).

Heyman v. Darwins Ltd. [1942] A.C. 356; [1942] 1 All E.R. 337, H.L.(E.).

Japan Line Ltd. v. Aggeliki Charis Compania Maritima S.A. (The Angelic Grace) [1980] 1 Lloyd's Rep. 288, Parker J. and C.A.

Kent v. Elstob (1802) 3 East. 18.

Kitts v. Moore [1895] 1 Q.B. 253, C.A.

Malmesbury Railway Co. v. Budd (1876) 2 Ch.D. 113.

Moorcock, The (1889) 14 P.D. 64, C.A.

North London Railway Co. v. Great Northern Railway Co. (1883) 11 Q.B.D. 30, C.A.

Photo Production Ltd. v. Securicor Transport Ltd. [1980] A.C. 827; [1980] 2 W.L.R. 283; [1980] 1 All E.R. 556, H.L.(E.).

Pickering v. Cape Town Railway Co. (1865) L.R. 1 Eq. 84; (1869) L.R. 7 Eq. 224.

Reg. v. National Joint Council for the Craft of Dental Technicians (Disputes Committee), Ex parte Neate [1953] 1 Q.B. 704; [1953] 2 W.L.R. 342; [1953] 1 All E.R. 327, D.C.

Rex v. Northumberland and Compensation Appeal Tribunal, Ex parte Shaw [1952] 1 K.B. 338; [1952] 1 All E.R. 122, C.A.

Scott v. Avery (1856) 5 H.L.Cas. 811, H.L.(E.).

Siskina (Owners of cargo lately laden on board) v. Distos Compania Naviera S.A. [1979] A.C. 210; [1977] 3 W.L.R. 818; [1977] 3 All E.R. 803, H.L.(E.).

Unione Stearinerie Lanza and Wiener, In re [1917] 2 K.B. 558. D.C.

The following additional cases were cited in argument in tile House Lords:

Andre et Compagnie S.A. v. Marine Transocean Ltd. (The Splendid Sun) [1981] 3 W.L.R. 43, C.A.

Ben & Co. Ltd. v. Pakistan Edible Oils Corporation Ltd., The Times, July 13, 1978, C.A.

Bloemen (F. J.) Pty. Ltd. v. City of Gold Coast Council [1973] A.C. 115; [1972] 3 W.L.R. 43; [1972] 3 All E.R. 357, P.C.

Bremer Oeltransport G.m.b.H. v. Drewry [1933] 1 K.B. 753, C.A.

Chandris v. Isbrandtsen-Moller Co. Inc. [1951] 1 K.B. 240; [1950] 1 All E.R. 768.

Crighton and Law Car and General Insurance Corporation Ltd., In re [1910] 2 K.B. 738, D.C.

Exormisis Shipping S.A. v. Oonsoo [1975] 1 Lloyd's Rep. 432.

Gulf Shipping Lines Ltd. v. Jadranska (unreported), [1981] 1 Lloyd's Rep. 31.

Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26, [1962] 2 W.L.R. 474; [1962] 1 All E.R. 474, C.A.

Jamshed Khodaram Irani v. Burjorji Dhunjibhai (1915) 32 T.L.R. 156, P.C.

Lep Air Services Ltd. v. Rolloswin Investments Ltd. [1973] A.C. 331: [1972] 2 W.L.R. 1175; [1972] 2 All E.R. 393, H.L.(E.).

Liverpool City Council v. Irwin [1977] A.C. 239; [1976] 2 W.L.R. 562: [1976] 2 All E.R. 39, H.L.(E.).

London and Blackwall Railway Co. v. Cross (1886) 31 Ch.D. 354, C.A.

Mareva Compania Naviera S.A. v. International Bulkcarriers S.A. [1975] 2 Lloyd's Rep. 509, C.A.

Miliangos v. George Frank (Textiles) Ltd. [1976] A.C. 443; [1975] 3 W.L.R. 758; [1975] 3 All E.R. 801, H.L.(E.).

Mylne v. Dickinson (1815) Coop.G. 195.

Powell v. Main Colliery Co. Ltd. [1900] A.C. 366, H.L.(E.).

Rasu Maritima S.A. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Government of the Republic of Indonesia intervening) (Pertamina) [1978] Q.B. 644; [1977] 3 W.L.R. 518; [1977] 3 All E.R. 324, C.A.

Rickards (Charles) Ltd. v. Oppenhaim [1950] 1 K.B. 616; [1950] 1 All E.R. 420, C.A.

Shell U.K. Ltd. v. Lostock Garage Ltd. [1976] 1 W.L.R. 1187; [1977] 1 All E.R. 481, C.A.

Star International Hong Kong (U.K.) Ltd. v. Bergbau-Handel G.m.b.H. [1966] 2 Lloyd's Rep. 16.

Stickney v. Keeble [1915] A.C. 386, H.L.(E.).

Succula Ltd. v. Harland and Wolff Ltd. [1980] 2 Lloyd's Rep. 381.

Universal Cargo Carriers Corporation v. Citati [1957] 2 Q.B. 401; [1957] 2 W.L.R. 713; [1957] 2 All E.R. 70.

The following cases are referred to in the judgment of Donaldson J.:

Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229; [1968] 2 W.L.R. 366; [1968] 1 All E.R. 543, C.A.

Beddow v. Beddow (1878) 9 Ch.D. 89.

Ben & Co. Ltd. v. Pakistan Edible Oils Corporation Ltd., The Times, July 13, 1978, C.A.

Birkett v. James [1978] A.C. 297; [1977] 3 W.L.R. 38; [1977] 2 All E.R. 801, C.A. and H.L.(E.).

Chandris v. Isbrandtsen-Moller Co. Inc. [1951] 1 K.B. 240; [1950] 1 All E.R. 768.

Compagnie Francaise de TŽlŽvision v. Thorn Consumer Electronics Ltd. [1978] R.P.C. 735, C.A.

County & District Properties Ltd. v. Lyell, July 12, 1977; Court of Appeal (Civil Division) Transcript No. 314 of 1977, C.A.

Crawford v. A. E. A. Prowting Ltd. [1973] Q.B. 1; [1972] 2 W.L.R. 749; [1972] 1 All E.R. 1199.

Den of Airlie S.S. Co. Ltd. v. Mitsui & Co. Ltd. (1912) 17 Com.Cas. 116, C.A.

Exormisis Shipping S.A. v. Oonsoo [1975] 1 Lloyd's Rep. 432; [1975] 2 Lloyd's Rep. 402.

Gouriet v. Union of Post Office Workers [1978] A.C. 435; [1977] 3 W.L.R. 300; [1977] 3 All E.R. 70, H.L.(E.).

Government of Gibraltar v. Kenney [1956] 2 Q.B. 410; [1956] 3 W.L.R. 466; [1956] 3 All E.R. 22.

Kitts v. Moore [1895] 1 Q.B. 253, C.A.

London and Blackwall Railway Co. v. Cross (1886) 31 Ch.D. 354, C.A.

Malmesbury Railway Co. v. Budd (1876) 2 Ch.D. 113.

Miliangos v. George Frank (Textiles) Ltd. [1975] Q.B. 487; [1975] 2 W.L.R. 555; [1975] 1 All E.R. 1076, C.A.; [1976] A.C. 443; [1975] 3 W.L.R. 758; [1975] 3 All E.R. 801, H.L.(E.).

Montgomery v. Montgomery [1965] P. 46; [1964] 2 W.L.R. 1036; [1964] 2 All E.R. 22.

North London Railway Co. v. Great Northern Railway Co. (1883) 11 Q.B.D. 30, C.A.

President of India v. John Shaw & Sons (Salford) Ltd., The Times, October 28, 1977, C.A.

Rasu Maritima S.A. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Government of the Republic of Indonesia intervening) (Pertamina) [1978] Q.B. 644; [1977] 3 W.L.R. 518; [1977] 3 All E.R. 324, C.A.

Siskina (Owners of cargo lately laden on board) v. Distos Compania Naviera S.A. [1979] A.C. 210; [1977] 3 W.L.R. 818; [1977] 3 All E.R. 803, H.L.(E.).

Sociedade Portuguesa de Navios Tanques Limitada v. Hvalfangerselskapet Polaris A/S [1952] 1 Lloyd's Rep. 407, C.A.

The following additional cases were cited in argument before Donaldson J.:

Biss v. Lambeth, Southwark and Lewisham Area Health Authority (Teaching) [1978] 1 W.L.R. 382; [1978] 2 All E.R. 125, C.A.

Mehta v. Adams, May 26, 1978; Court of Appeal (Civil Division) Transcript No. 348 of 1978, C.A.

Sayers v. Collyer (1884) 28 Ch.D. 103, C.A.

Thorne v. British Broadcasting Corporation [1967] 1 W.L.R. 1104; [1967] 2 All E.R. 1225, C.A.

The following cases are referred to in the judgments in the Court of Appeal:

Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229; [1968] 2 W.L.R. 366; [1968] 1 All E.R. 543, C.A.

Andre et Compagnie S.A. v. Marine Transocean Ltd. (The Splendid Sun) [1980] 1 Lloyd's Rep. 333.

Associated Bulk Carriers Ltd. v. Koch Shipping Inc. [1978] 1 Lloyd's Rep. 24, C.A.

Beddow v. Beddow (1878) 9 Ch.D. 89.

Birkett v. James [1978] A.C. 297; [1977] 3 W.L.R. 38; [1977] 2 All E.R. 801, H.L.(E.).

Bristol Corporation v. John Aird & Co. [1913] A.C. 241, H.L.(E.).

Chandris v. Isbrandtsen-Moller Co. Inc. [1951] 1 K.B. 240; [1950] 1 All E.R. 768.

County & District Properties Ltd. v. Lyell (unreported), July 12, 1977; Court of Appeal (Civil Division) Transcript No. 314 of 1977, C.A.

Crawford v. A. E. A. Prowting Ltd. [1973] Q.B. 1; [1972] 2 W.L.R. 749; [1972] 1 All E.R. 1199.

Crighton and Law Car and General Insurance Corporation Ltd., In re [1910] 2 K.B. 738, D.C.

Dalmia Dairy Industries Ltd. v. National Bank of Pakistan [1978] 2 Lloyd's Rep. 223, Kerr J. and C.A.

Danforth Travel Centre Ltd. v. British Overseas Airways Corporation (1972) 29 D.L.R. (3d) 141.

Den of Airlie S.S. Co. Ltd. v. Mitsui & Co. Ltd. (1912) 17 Com.Cas. 116, C.A.

Frota Nacional de Petroleirus v. Skibsaktieselskabet Thorsholm [1957] 1 Lloyd's Rep. 1, C.A.

Heyman v. Darwins Ltd. [1942] A.C. 356; [1942] 1 All E.R. 337, H.L.(E.).

Jackson v. Barry Railway Co. [1893] 1 Ch. 238, C.A.

Japan Line Ltd. v. Aggeliki Charis Compania Maritima S.A. (The Angelic Grace) [1980] 1 Lloyd's Rep. 288, Parker J. and C.A.

Kitts v. Moore [1895] 1 Q.B. 253, C.A.

Lister v. Romford Ice and Cold Storage Co. Ltd. [1957] A.C. 555; [1957] 2 W.L.R. 158; [1957] 1 All E.R. 125, H.L.(E.).

Liverpool City Council v. Irwin [1976] Q.B. 319; [1975] 3 W.L.R. 663; [1975] 3 All E.R. 658, C.A.; [1977] A.C. 239; [1976] 2 W.L.R. 562; [1976] 2 All E.R. 39, H.L.(E.).

Maunsell v. Midland Great Western (Ireland) Railway Co. (1863) 1 H. & M. 130.

Murrayfield Real Estate Co. Ltd. v. C. Bryant & Son Ltd. (unreported), July 20, 1978; Court of Appeal (Civil Division) Transcript No. 473 of 1978, C.A.

North London Railway Co. v. Great Northern Railway Co. (1883) 11 Q.B.D. 30, C.A.

Pickering v. Cape Town Railway Co. (1865) L.R. 1 Eq. 84.

Shell U.K. Ltd. v. Lostock Garage Ltd. [1976] 1 W.L.R. 1187; [1977] 1 All E.R. 481, C.A.

Siskina (Owners of cargo lately laden on board) v. Distos Compania Naviera S.A. [1979] A.C. 210; [1977] 3 W.L.R. 818; [1977] 3 All E.R. 803, H.L.(E.).

Smith & Service and Nelson & Sons, In re (1890) 25 Q.B.D. 545, C.A.

Sneddon v. Kyle (1902) 2 S.R.(N.S.W.)Eq. 112.

Unione Stearinerie Lanza and Wiener, In re [1917] 2 K.B. 558, D.C.

Unitramp v. Garnac Grain Co. Inc. [1979] 1 Lloyd's Rep. 212, C.A.

Universal Cargo Carriers Corporation v. Citati [1957] 2 Q.B. 401; [1957] 2 W.L.R. 713; [1957] 2 All E.R. 70.

Whitworth Street Estates (Manchester) Ltd. v. James Miller Partners Ltd. [1970] A.C. 583; [1970] 2 W.L.R. 728; [1970] 1 All E.R. 796, H.L.(E.)

Wilson, Sons & Co. v. Conde d'Eu Railway Co. (1887) 51 J.P. 230, D.C.

The following additional cases were cited in argument in the Court ot Appeal in Gregg v. Raytheon Ltd.:

Carron Iron Co. v. Maclaren (1855) 5 H.L.Cas. 416, H.L.(E.).

Connolly Bros. Ltd., In re [1911] 1 Ch. 731, C.A.

Curtis v. Potts (1814) 3 M. & S. 145.

Doleman & Sons v. Ossett Corporation [1912] 3 K.B. 257, C.A.

Exormisis Shipping S.A. v. Oonsoo [1975] 1 Lloyd's Rep. 432.

Farrar v. Cooper (1890) 44 Ch.D. 323.

Gibraltar (Government of) v. Kenney [1956] 2 Q.B. 410; [1956] 3 W.L.R 466; [1956] 3 All E.R. 22.

Giddings v. Giddings (1847) 10 Beav. 29.

Hodgkinson v. Fernie (1857) 3 C.B.N.S. 189.

London and Blackwall Railway Co. v. Cross (1886) 31 Ch.D. 354, C.A.

London Export Corporation Ltd. v. Jubilee Coffee Roasting Co. Ltd. [1958] 1 W.L.R. 271; [1958] 1 All E.R. 494.

Malmesbury Railway Co. v. Budd (1876) 2 Ch.D. 113.

Mylne v. Dickinson (1815) Coop.G. 195.

Myron, The [1970] 1 Q.B. 527; [1969] 3 W.L.R. 292; [1969] 2 All E.R. 1263.

Reg. v. Leyland Justices, Ex parte Hawthorn [1979] Q.B. 283; [1979] 2 W.L.R. 28; [1979] 1 All E.R. 209, D.C.

Reg. v. National Joint Council for the Craft of Dental Technicians (Disputes Committee), Ex parte Neate [1953] 1 Q.B. 704; [1953] 2 W.L.R. 342; [1953] 1 All E.R. 327, D.C.

Rex v. Wandsworth Justices, Ex parte Read [1942] 1 K.B. 281; [1942] 1 All E.R. 56, D.C.

Wood v. Leake (1806) 12 Ves.Jun. 412.

The following additional cases were cited in argument in the Court of Appeal in Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corporation:

Giddings v. Giddings (1847) 10 Beav. 29.

Gouriet v. Union of Post Office Workers [1978] A.C. 435, [1977] 3 W.L.R. 300; [1977] 3 All E.R. 70, H.L.(E.).

Halfdan Grieg & Co. A/S v. Sterling Coal & Navigation Corporation [1973] Q.B. 843; [1973] 2 W.L.R. 904; [1973] 2 All E.R. 1073, C.A.

Rasu Maritima S.A. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Government of the Republic of Indonesia intervening) (Pertamina) [1978] Q.B. 644; [1977] 3 W.L.R. 518; [1977] 3 All E.R. 324. C.A.

ACTIONS

By a writ dated April 25, 1977, the plaintiffs in the first action, Bremer Vulkan Schiffbau und Maschinenfabrik (a body corporate), sought an

injunction restraining the defendants, South India Shipping Corporation Ltd., by themselves or their agents from proceeding with, pursuing or taking any further step in a reference to arbitration, wherein the defendants were claimants and the plaintiffs were respondents, commenced pursuant to an arbitration clause in a contract between the parties dated August 6, 1964. Alternatively, they sought a declaration that the arbitrator had power to make and issue a final award in the reference dismissing the claim on the grounds only that the defendants had failed to prosecute their claims in the reference with diligence and had been guilty of gross and inexcusable delay causing serious prejudice to the plaintiffs and/or that the dispute could not fairly be tried at the likely time of hearing.

In the second action, by a writ dated December 1, 1978, the plaintiffs, Newton Gregg, Lucile Gregg and Malcolm Kelly, sought an injunction against the continuance of an arbitration commenced by the defendants, Raytheon Ltd., against the plaintiffs and which concerned disputes arising out of a contract between the plaintiffs and the defendants dated June 2, 1970, by reason of the defendants' inordinate and inexcusable delay in prosecuting the arbitration, and for a declaration that the arbitrators in the arbitration had power to strike out the defendants' claim therein for want of prosecution.

The facts are stated in the judgment.

Kenneth Rokison Q.C. and David Grace for the plaintiffs in the first action.

Gerald Butler Q.C. and Giles Caldin for the defendants in the first action.

Mark Waller for the plaintiffs in the second action.

Marcus Jones for the defendants in the second action.

APRIL 10.DONALDSON J. gave the following written judgment. These two actions raise issues of fundamental importance to English arbitration. In each case the plaintiffs are the respondents in arbitrations initiated by the defendants. The plaintiffs contend that the conduct of the defendants has been such that had their claims been the subject matter of litigation, the court would have dismissed the claims for want of prosecution. They further contend that in such circumstances the court can and should enjoin the defendants from further proceeding with the arbitrations. Further or alternatively, they seek a declaration that the arbitrators have power to issue a final award dismissing the defendants' claims. So far as I or counsel know, the claim for an injunction is completely novel and the contention that arbitrators have power to dismiss claims for want of prosecution has only once been considered by the courts. This occurred in Crawford v. A. E. A. Prowting Ltd. [1973] Q.B. 1, when Bridge J. held that arbitrators had no such power.

I mention this dearth of authority not as casting doubt upon the validity of the plaintiffs' submissions, but as showing their importance. The novelty of submissions must always cause a court to consider with

particular care whether (a) the contention is so obviously correct that no one has ever seen fit to challenge it, (b) it is so obviously wrong that no one has ever before thought to put it forward or (c) it has surfaced for the first time because the law is in one of its evolutionary stages But it has no other significance. In the present case I have little doubt that the explanation is that in this, amongst other fields, the law is in a state of active evolution responding to the changing needs of the times.

Let me start by considering the law as it applies to litigation. It has developed considerably in the last 12 years and the guidelines which are to be applied are now mainly to be found in two cases: Birkett v. James [1978] A.C. 297 and Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229. However, assistance is also obtained from County & District Properties Ltd. v. Lyell, July 12, 1977; Court of Appeal (Civil Division) Transcript No. 314 of 1977 and President of India v. John Shaw & Sons (Salford) Ltd, The Times, October 28, 1977. These guidelines can, I think, be summarised as follows:

1. The power to dismiss for want of prosecution should be exercised only where the court is satisfied either that:

A. the default has been intentional and contumelious, e.g., disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court;

OR B. (i) there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (ii) such delay (a) either will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action, (b) or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party.

2. Only in exceptional cases should an action be dismissed before the relevant limitation period has expired, at least if it is likely that the plaintiff will issue a new writ.

3. As Parliament has conferred a legal right on plaintiffs to institute proceedings at any time within the relevant limitation period, the action of a plaintiff in delaying for almost all or any part of that period cannot be relied upon as constituting inordinate or inexcusable delay. Nor, without more, can the defendant rely upon this delay as having caused him prejudice or as giving rise to a risk that there can be no fair trial. But such delay is far from being irrelevant. It will have an important bearing on the degree of expedition which is required of the plaintiff once the proceedings have been instituted, although again he will be entitled to the benefit of the time table provided by the Rules of the Supreme Court. Delay in the course of the proceedings which would have been acceptable if they had been begun promptly, may become inordinate and inexcusable if it occurs after a late start. Similarly, whilst the defendant must show prejudice flowing from delay in the course of the proceedings, the degree of prejudice created by any given period of delay may be greatly heightened if proceedings were not begun promptly. Contrary to legend, it was not the last straw which broke

the camel's back. It was the addition of that straw. The defendant must show that straws of the appropriate kinds were heaped upon his back during the course of the proceedings, but the court must have regard to the load which he was already carrying when the proceedings began.

4. Prejudice to the defendant can take many forms. Lapse of time may affect the ability of the defendant to marshal the evidence which would have been available to him at an earlier time. Thus witnesses may die, become untraceable or their recollections may dim. Again they may retire or leave the defendant's employment, depriving them of the personal interest which they might otherwise have had in the proceedings and tending to reduce the enthusiasm with which they search their recollections. But prejudice is not limited to matters of recollection and evidence. The very fact of having a large unquantified claim hanging over the head of the defendant for a long period may itself be highly prejudicial.

5. The defendant will lose his right to have the action dismissed if he induces in the plaintiff a reasonable belief that, notwithstanding the delay, he is willing for the action to proceed and, in consequence, the plaintiff does work or incurs expense in the further prosecution of the action. But the right may be revived by further delay. As Diplock L.J. said in Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229, 260, in such circumstances the defendant cannot obtain dismissal of the action "unless the plaintiff has thereafter been guilty of further unreasonable delay." Salmon L.J. in the same case at p. 272 said that the defendant "will be precluded from relying on the previous delay by itself as a ground for dismissing the action." This has led to an interesting discussion in the present case on whether, following acquiescence in the plaintiff's delay, the defendant can rely upon that delay for any purpose. The extreme view is that he cannot. He must show inordinate and inexcusable delay following the acquiescence and must further show prejudice following from that delay. I do not think that this is right.

Much will turn upon the nature of the acquiescence. For example, if the defendant by words or conduct leads the plaintiff to believe that he is content that matters shall drift on unless and until he indicates that he wishes the dispute to be brought to trial, the plaintiff will be entitled to take his time. It will not then be open to the defendant to complain of subsequent delay until he has given notice to the plaintiff that time is of the essence and thereafter further delay has occurred. But a more usual situation is one in which the defendant shows that he is prepared to overlook previous inordinate and inexcusable delay and any prejudice caused thereby, if the plaintiff will now bring the matter to trial with expedition. If the plaintiff still drags his feet, it may be said that the condition upon which the acquiescence is based has not been fulfilled and that the defendant is entitled to rely upon all delay and prejudice, whether occurring before or after the acquiescence. An alternative view is that in such circumstances the defendant must show some delay and prejudice following the aquiescence, but that the extent of delay and prejudice which will give rise to a fresh right to have the

action dismissed will be influenced greatly by events prior to the acquiescence.

I doubt whether it is possible to lay down any rule of general application. Acquiescence in delay is not a permanent bar to a subsequent successful application for an order dismissing the action for failure to prosecute it. Each case will have to be considered in the light of its own particular facts, the court asking itself the question: "Bearing in mind the conduct of the defendant, is it just and equitable in all the circumstances that the plaintiff shall be denied a trial of his action on its merits?"

6. Mere inactivity upon the part of a defendant is not to be construed as acquiescence in delay by the plaintiff. "... sleeping dogs, in the form of sleeping plaintiffs, need not be aroused by defendants from their slumbers;": see per Roskill L.J. in Compagnie Francaise de TŽlŽvision v. Thorn Consumer Electronics Ltd. [1978] R.P.C. 735, 739. The reasons underlying this attitude by the courts were discussed by Diplock L.J. in Allen v. Sir Alfred McAlpine and Sons Ltd. [1968] 2 Q.B. 229, 257- 258. His conclusion was that it was inherent in an adversary system of litigation, which relied exclusively upon the parties to an action to take whatever procedural steps appeared to them to be expedient to advance their own case, that a defendant could, with propriety, refrain from spurring the plaintiff to proceed to trial and then, if the facts otherwise justified such a course, apply to have the action struck out for want of prosecution.

I now turn to consider whether these guidelines have any application in the control of arbitration. Whether an arbitrator had power to dismiss a claim for want of prosecution was considered by Bridge J. in Crawford v. A. E. A. Prowting Ltd. [1973] Q.B. 1. It was a small building dispute. The contract to build the house was made in 1960, points of claim were served in May 1966 and discovery was completed in October 1966. The builders sought further and better particulars of the claim, but in vain. In January 1968, there was an appointment for directions, but the arbitrator "made no order and it was left to the parties to arrange a fresh appointment to fix a date for the hearing." Neither party arranged a fresh appointment and in November 1970, the builders applied to the arbitrator to dismiss the claim for want of prosecution. The arbitrator refused this application and stated a case for the opinion of the court. That special case was in many respects inadequate, but it was sufficient to raise the issue of principle.

Bridge J. held that arbitrators had no power to dismiss claims for want of prosecution. He said, at p. 7, that the argument to the contrary rested upon the assumption

"... that in an arbitration, as in proceedings in court, and apart from any express obligation being put upon him, there is a duty upon the claimant to the exclusion of the respondent to promote the progress of the arbitration and correspondingly it is assumed, as the basis of Mr. Scott's argument, that the respondent to the arbitration can sit by and do nothing, letting the sleeping claimant dog lie until he

is ready to wake him up with his application to dismiss for want of prosecution."

The judge then referred to the remarks of Diplock L.J. in Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229 and having said (no doubt correctly) that the court in that case did not have the conduct of arbitrations in contemplation, expressed the view:

"... there is a fundamental difference between the nature of the duties upon the parties in relation to interlocutory progress in an action on the one hand and in an arbitration on the other."

He supported this conclusion by contrasting the position under the Rules of the Supreme Court, which he said put the onus of keeping the litigation moving fairly and squarely on the plaintiff, with the position in arbitration where, although there may be a heavier duty on the claimant to pursue his claim than on the respondent to take steps for his part:

"... nevertheless it is for both parties, having agreed that the arbitrator shall resolve their differences, to obtain from the arbitrator such interlocutory directions as are appropriate to enable the matter to be prepared for trial."

He concluded that the respondents' remedy lay in seeking an interlocutory order from the arbitrator requiring the claimant to take some step, such as delivering points of claim, and in default of compliance, seeking an ex parte hearing of the claim.

This decision is not binding upon me and, with all respect to Bridge J., I do not think that it is right. Arbitrations vary greatly in their character from major proceedings which are wholly indistinguishable from a heavy High Court action to disputes on the quality of commodities (the "look-sniff" arbitration). But so do actions. Actions prosecuted under the small claims procedures in the county courts are indistinguishable from similar claims determined by arbitration under the auspices of the motor, building or travel industries or by so-called small claims courts, which are in fact not courts but arbitral bodies. With the sole exception of the look-sniff arbitration, all employ the adversary system. In saying this, I am not overlooking the fact that section 12 (1) of the Arbitration Act 1950 gives the arbitrator power to examine the parties on oath or affirmation. This power is essential in any proceedings in which the parties may be unrepresented and a similar power is, in effect, exercised by judges in the county court every day of the week. Nor is it to be thought that a court is powerless to take the initiative itself in order to ensure that proceedings make progress. The National Industrial Relations Court did so frequently and I have recently threatened to list a case of my own motion, because it is being incorrectly reported in the press that this court is dragging its feet in fixing a date for the hearing. The only real difference between litigation and arbitration is that, in the case of litigation, rules of court provide a basic time table for taking interlocutory steps. In the case of arbitration, there is no such basic time table unless it is provided by relevant arbitration rules, by agreement of the parties or by order of the arbitrator. But this does not mean that

there is no obligation upon the claimant to pursue his claim with reasonable dispatch. Indeed, in so far as one of the advantages claimed for arbitration is that it leads to a speedier resolution of disputes, there may well be a heavier onus on the parties to arbitration to use expedition than there is upon parties to litigation. And I say "parties" rather than "plaintiffs and claimants," because it is not correct that the onus in litigation is always on the plaintiff. There are times, for example, after delivery of a statement of claim, when the onus is upon the defendant. The same is true of arbitration.

The suggestion that the respondents' remedy in arbitration lies in obtaining an order for the delivery of points of claim and, in default, seeking an ex parte hearing of the claim seems to me to require careful examination. If there has been inordinate and inexcusable delay which causes serious prejudice to the respondent and a fortiori if it has been such as to render a fair trial impossible, any requirement that before an order is made summarily terminating the proceedings the arbitrator must first make an interlocutory order, such as to deliver points of claim, with which the claimant can comply would, in the words of Salmon L.J. in Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229, 270 "be an encouragement to the careless and lethargic." And what happens if the claimant does not comply with the order? It is clear law that the arbitrator can proceed ex parte if one of the parties, having been duly summoned, does not attend: see Wood v. Leake (1806) 12 Ves. Jun. 412. But what if he does attend and wishes to present his case. Can the arbitrator refuse to allow him to do so? Unless there is power to dismiss the claim for want of prosecution I do not think that he could. And if he could not, the respondent would be at a hopeless disadvantage.

The power of the courts derives from statute and their inherent jurisdiction. The power of arbitrators derives from statute and from a consensual conferment of jurisdiction by the parties when agreeing to submit disputes to arbitration. There are at present no statutory provisions which are directly material. The question is therefore what jurisdiction is impliedly conferred by the parties on the arbitrator. This was considered by the Court of Appeal in the context of a power to award interest on damages in Chandris v. Isbrandtsen-Moller Co. Inc. [1951] 1 K.B. 240. The headnote to the report reads:

"... the power of an arbitrator to award interest was derived from the submission to him, which impliedly gave him power to decide 'all matters in difference' according to the existing law of contract, exercising every right and discretionary remedy given to a court of law;..."

Although the decision is in terms limited to the power to award interest, I think that the generality of this part of the headnote is justified. Thus Tucker L.J. said, at pp. 251-262:

"For myself, I cannot see why any distinction should be drawn between the duty of an arbitrator to give effect to such statutes as the Statute of Limitations and his jurisdiction to give effect in his

discretion to the award of interest. After all, an award of interest is only a part of the damages recoverable, and, to adapt the words of Lord Salvesen in the Ramkissendass case [1929] W.N. 27 which were approved by Lord Maugham, they would read as follows: 'Although the Law Reform (Miscellaneous Provisions) Act 1934 does not in terms apply to arbitrations, I think that in mercantile references of the kind in question it is an implied term of the contract that the arbitrator must decide the dispute according to the existing law of contract, and that every right and discretionary remedy given to a court of law can be exercised by him.' To that there are, of course, certain well-known exceptions, such as the right to grant an injunction, which stand on a different footing; one of the reasons why an arbitrator cannot give an injunction is, of course. that he has no power to enforce it; but such an objection does not apply to the award of interest."

Whilst it is always open to the parties to agree to curtail the arbitrator's jurisdiction, other than his power to state an award in the form of a special case for the opinion of the High Court or in any other respects which are contrary to law, if this is not done I think that an arbitrator has the same power as do the courts to make peremptory orders which provide that, in default of compliance, the claim will be dismissed or, as the case may be, the respondent will be debarred from defending and also of making orders dismissing a claim for want of prosecution. Courts and arbitrators are in the same business, namely, the administration of justice. The only difference is that the courts are in the public and arbitrators are in the private sector of the industry. Their problems are the same and so should be the solutions which they adopt. In my judgment, parties who submit disputes to 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, subject only to the well-known exception in relation to injunctive orders and the grant of a remedy, such as rectification, which would indirectly extend their own jurisdiction.

The next question is whether the courts can intervene and enjoin a claimant from further proceeding with an arbitration in a situation in which, if the problem arose in litigation, they would dismiss the claim for want of prosecution. The supervisory jurisdiction of the courts in respect of arbitration is limited. In appropriate cases they can and will require an arbitrator to state a question of law arising in the course of a reference or an award or part of an award for their decision under section 21 (1) of the Act of 1950. They can and will remit an award for further consideration by the arbitrator or set it aside under sections 22 or 23 of the Act. They can and will give leave to a party to revoke the authority of the arbitrator under section 24 of the Act. But they will not substitute their discretion for that of the arbitrator, by ordering him to allow amendments to pleadings of otherwise reversing his interlocutory orders: Exormisis Shipping S.A. v. Oonsoo [1975] 1 Lloyd's Rep. 432.

But there is another class of case in which the courts will intervene

in arbitration proceedings. Although they may appear to be exercising a supervisory jurisdiction, that is not in fact the case. I refer to the jurisdiction to intervene by injunction to prevent a party proceeding with an arbitration where the agreement to refer is itself being impeached. The leading case is Kitts v. Moore [1895] 1 Q.B. 253, in which the plaintiff was denying that he had ever entered into an arbitration agreement hut the principle applies wherever the agreement is impeached, whether on grounds of fraud, mistake or otherwise: see Malmesbury Railway Co. v. Budd (1876) 2 Ch.D. 113 and Beddow v. Beddow (1878) 9 Ch.D. 89. And it is not infrequently exercised in the commercial court to this day when, for example, a plaintiff alleges that the agent who purported to commit him to a purchase of a commodity under a contract containing an arbitration clause had no authority to act on his behalf or where it is alleged that there is no agreement to arbitrate because the parties were not ad idem on the terms of the alleged contract which contains the arbitration clause: see Sociedade Portuguesa de Navios Tanques Limitada v. Hvalfangerselskapet Polaris A/S [1952] 1 Lloyd's Rep. 407, and also Russell on Arbitration, 18th ed. (1970), pp. 79-80.

It has been objected in the present case that this is contrary to the decisions of the Court of Appeal in North London Railway Co. v. Great Northern Railway Co. (1883) 11 Q.B.D. 30, which was followed in London and Blackwall Railway Co. v. Cross (1886) 31 Ch.D. 354. I confess that I find these cases difficult to understand, although, for what they may decide, this does not render them any less binding upon me.

In the earlier case of Beddow v. Beddow, 9 Ch.D. 89, 93, Sir George Jessel M.R. granted an injunction restraining an arbitrator from proceeding with the arbitration upon the grounds that he was unfit or incompetent to act. He considered the limits of the court's jurisdiction under section 25 of the Judicature Act 1873 and held that he had:

"... 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 doing so he was affirming his earlier expression of opinion in Malmesbury Railway Co. v. Budd, 2 Ch.D. 113. Both those decisions were considered in the North London Railway case, 11 Q.B.D. 30. Brett L.J. held that the section did no more than extend the jurisdiction of any division of the High Court to all divisions. The position had previously been and remained that no court could issue an injunction where there was "no legal right on the one side or no legal liability on the other at law or in equity." He agreed with Sir George Jessel M.R.'s decisions, because prior to the Judicature Act the common law courts would have removed an arbitrator in such circumstances and the grant of an injunction produced the same result. Cotton L.J. expressed the same view. I would only comment that it is in the highest degree inconvenient if judges exercising jurisdiction in 1979 have to try to find out what was the extent of the jurisdiction of their predecessors over a century ago.

The next case is London and Blackwall Railway Co. v. Cross, 31 Ch.D. 354. Mr. Cross instituted arbitration proceedings under the Lands Clauses Consolidation Act 1845 against the railway company using the name of the Poplar and Greenwich Ferry Co. The railway company sought an injunction to restrain him from carrying on these proceedings on the grounds that he had no authority to use the ferry company's name. Chitty J. granted the injunction, but his decision was reversed on appeal. Lindley L.J. at p. 368 held himself bound by the North London Railway case, but added that it only decided that the settled practice of the courts as to when injunctions would be granted had not been altered by the Judicature Acts and that there was still no right or jurisdiction to restrain a person from proceeding for compensation under the Lands Clauses Consolidation Act on the ground that he was not entitled to compensation. He added, at p. 368:

"The case does not decide that in no case is it right to restrain persons from proceeding to arbitration; there are cases in which it is quite right to do so. One of such cases came before Vice-Chancellor Wood, Maunsell v. Midland Great Western (Ireland) Railway Co., 1 H. & M. 130. It was an action by a shareholder on behalf of himself and the other shareholders in the company, against the company and its directors and another company, to restrain them from proceeding to arbitration under an agreement in respect of breaches of clauses which were ultra vires. That case, and cases of that kind, are wholly unaffected by the decision to which I am alluding. The case must not be supposed to go this length, that there is no authority whatever in the Court of Chancery to restrain proceedings before an arbitrator, but I think it goes this length, that in all cases under the Lands Clauses Act the practice is that the question of right or no right to compensation is to be tried by an action on the award, and not by an action for an injunction in the earlier stage of the proceedings. One can easily see that there are conveniences on the one side and on the other, but in my opinion the balance of convenience is in favour of declining to interfere by injunction."

This brings me to Kitts v. Moore [1895] 1 Q.B. 253. Lindley L.J. said that before the Judicature Acts, courts of equity had granted injunctions to stay references upon the ground that the agreement containing the arbitration clause was impeached. In the North London Railway case there was no impeaching of the arbitration agreement and no more ground for stopping the arbitration than for stopping an action because it was a frivolous one. That decision in no way reduced the power of the courts to continue to grant injunctions, where the arbitration clause was impeached.

So far as I know, nothing more was heard of the North London Railway case until 1912 when it was considered in Den of Airlie S.S. Co. Ltd. v. Mitsui & Co. Ltd. (1912) 17 Com.Cas. 116. There the Court of Appeal affirmed its headnote, namely:

"... the High Court has no jurisdiction to issue an injunction to

restrain a party from proceeding with an arbitration in a matter beyond the agreement to refer, although such arbitration proceeding may be futile and vexatious."

It was two world wars later before this troublesome case re-appeared. It was then resurrected (to my personal discomfiture as counsel, because I had failed to find it) in Government of Gibraltar v. Kenney [1956] 2 Q.B. 410. Sellers J. clearly shared my lack of enthusiasm for the decision and also my inability to overrule it. However, he held, obiter, that it did not restrict the power of the court to grant a declaration. Since then it has been cited in Montgomery v. Montgomery [1956] P. 46 for the unexceptionable proposition that the High Court can enforce any legal right which was capable of being enforced either at law or equity prior to 1873; in Siskina (Owners of Cargo lately laden on board) v. Distos Compania Naviera S.A. [1979] A.C. 210 for the equally unexceptionable proposition that the High Court has no power to grant an interlocutory injunction except in protection or assertion of some legal or equitable right which it has jurisdiction to enforce by legal judgment; in Rasu Maritima S.A. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Government of the Republic of Indonesia intervening) (Pertamina) [1978] Q.B. 644 in which Lord Denning M.R. at p. 600 and Orr L.J. at p. 664 seem to have considered that the decision was not binding in so far as it purported to fetter the discretion of the court to grant injunctions "in any case where it would be right or just to do so"; in Ben & Co. Ltd. v. Pakistan Edible Oils Corporation Ltd., The Times, July 13, 1978, where Lord Denning M.R. held that to allege that there was no arbitration agreement was to impeach the alleged agreement and that accordingly the court had jurisdiction to grant an injunction; and in Gouriet v. Union of Post Office Workers [1978] A.C. 435, 516, by Lord Edmund-Davies for the proposition that it was not "just" to grant an injunction, save in defence of a legal right recognisable by the courts.

Accordingly, on the authorities, the courts can issue an injunction in cases in which the respondent to an arbitration alleges that there never was an agreement to arbitrate or that the agreement has ceased to bind him, but not where he alleges that the arbitrator is about to exceed his jurisdiction or that whilst he agreed to arbitrate with the claimant, the person using the claimant's name is not authorized to do so. However, in all these cases the courts can give a declaration. This seems to me to be very strange, but that is a matter for the House of Lords and not for me to consider.

I have already said that in my judgment an arbitrator has power in an appropriate case to make an award dismissing a claim for want of prosecution. But I further think that conduct by the claimant which justifies such an order also constitutes a repudiatory breach of the agreement to submit disputes to arbitration. It is implicit in such an agreement that each party will use reasonable endeavours to bring the matter to a speedy conclusion. Any unjustified delay will constitute a breach of that agreement, but one which is inordinate and inexcusable and which further causes serious prejudice to the defendant or is likely to give

rise to a substantial risk that it will not be possible to have a fair trial seems to me to be more than a simple breach of contract - it strikes at the root of it. In such a situation the respondent has a choice. He can affirm the agreement to arbitrate by carrying on with the arbitration either generally or in the form of an application to the arbitrator to make an award dismissing the claim for want of prosecution. Alternatively, he can accept the claimant's conduct as a repudiation, thus, if he is right, terminating the agreement to refer and can then apply to the court for injunctive relief. It will be within the court's power to grant such relief, because the issue between the parties will involve the impeachment of the arbitration agreement.

Having considered the matter in terms of general principle, and without regard to the Arbitration Act 1979, which received the Royal Assent on April 4 and is not yet in force, I now have to apply those principles to the facts of these two actions.

The shipbuilding dispute

The plaintiffs, Bremer Vulkan Schiffbau und Maschinenfabrik, are, as their name implies, German shipbuilders. Equally self-evidently the defendants, South India Shipping Corporation Ltd. are shipowners. In August 1964, the plaintiffs agreed to build five bulk carriers for the defendants. They were duly built and delivered between November 4, 1965, and December 3, 1966.

The shipbuilding contract was governed by German law, but it also provided that any disputes should be referred to arbitration in London pursuant to the Arbitration Act 1950. The contract contained a clause whereby the plaintiffs agreed to rectify defects appearing within 12 months of delivery and reserved the right to keep a guarantee engineer on board during this period. This right was exercised. The guarantee periods expired between November 4, 1965, and December 3, 1967. The plaintiffs have been advised that, subject to any agreement to the contrary, all claims under the contract would become time barred as a matter of substantive German law six months after the end of the guarantee period. On this basis the last date for beginning an arbitration would have been May 3, 1967. This view of German law is not accepted by the defendants and, for present purposes, I have to assume that they are right and that the relevant law is English.

The arbitration proceedings in fact began in January 1972, over five years after the last vessel was delivered. Points of claim were served in April 1976, over 9 years after that delivery. These proceedings, which were begun a year later in April 1977, have only been heard in March 1979, over 12 years from the delivery of the last vessel and nearly 15 years from the time when the contract was concluded. Clearly some explanation is called for, not only from the parties, but also from the court.

The court's responsibility could not begin until the writ was issued in April 1977 but the nature of the proceedings was such that I should have expected that they would have been heard and determined before

the end of July in that year. If one party is alleging that there has been intolerable delay, it is clearly of the greatest importance that no time be wasted in deciding whether or not the proceedings shall be allowed to continue. I was, therefore, concerned to find out whether the delay was the responsibility of the court or of the parties. The facts, I think, speak for themselves.

Although the writ was issued in April 1977, it was not until June 1978 that the matter was brought to the attention of the court. There was then an application to fix a date for the hearing and a date in November 1978 was allocated. Taking account of the fact that a five-day hearing was involved and that the long vacation was approaching, this was, I think, an excusable delay, although I should have preferred it to have been less. The next event was an application by the parties to vacate the November date. This was done and the case was refixed for December 1978. Unfortunately - and exceptionally - the court itself had to vacate this date, because of unexpected congestion in the list. The parties were asked when it would be convenient to fix a new hearing date and they agreed upon March 1979. They could have had an earlier date had they wished.

Let me now turn to the chronology which is relevant to my decision in these proceedings. If the relevant limitation period is to be found in English law, the defendants had a period of six years from the accrual of the various causes of action in which to begin arbitration proceedings. Sir Gordon Wilmer accepted appointment as sole arbitrator in January 1972. Some complaints relate to the first vessel which was delivered in November 1965. This does not mean that these complaints are time barred, because there may well be a separate cause of action based upon a failure to remedy the defects during or shortly after the expiration of the guarantee period for that vessel in November 1966. Complaints in respect of the other vessels would have arisen later, but the guarantee period on the last vessel to be delivered expired in December 1967, four years before the arbitration proceedings began.

The fact that the arbitration only began in January 1972 cannot be a matter for complaint. The defendants were entitled to take as much time as they wished before beginning proceedings, provided only that they did not allow the statutory limitation period to supervene. But their exercise of this right has some bearing on the degree of expedition which they should have shown after the proceedings began.

[His Lordship considered the facts, referred to letters written by the parties' solicitors and continued:] The first matter which I have to consider is whether the delay following the institution of the arbitration proceedings was inordinate and inexcusable. Notice of arbitration had been given in April 1971 and the appointment of the arbitrator was perfected by January 1972. The ships had been delivered between November 1965 and December 1966, and the last guarantee period had ended in December 1967. Consulting surveyors had been appointed by the defendants in November 1967. Having had so long to consider and prepare their claim before the arbitration proceedings were begun, the delay thereafter was prima facie inordinate and inexcusable.

Two different explanations are offered. The first rests upon the complexity of the claim, the difficulty in arranging meetings with the plaintiffs to discuss a settlement, the other commitments of the defendants' solicitors and the limited number of counsel capable of handling such claims. The second rests upon an allegation that the plaintiffs led the defendants to conclude that there was no hurry.

I entirely accept that this was a very heavy claim and that it presented problems both to busy solicitors and to busy counsel. I also accept that, in litigation of this type, solicitors, having once instructed counsel, would find it difficult to "change horses," especially as there are a very limited number of counsel who are familiar with this sort of work. But counsel were only instructed to settle the points of claim in November 1972 and there was throughout not the slightest sign of any sense of urgency.

This lack of a sense of urgency is virtually admitted and forms the basis of the second explanation. Thus, it is said that the points of claim could have been served at latest by early 1975, if the plaintiffs or their solicitors had given any indication at any stage that they were concerned that they might be prejudiced by the delay in settling the points of claim. This is the "sleeping dogs" explanation and I do not accept it. As early as May 1973, the defendants' solicitors were saying that the points of claim would be served "shortly" and the plaintiffs' solicitors were talking of "inordinate" delay saying that they had rather assumed that the proceedings had been abandoned. A year later, in March 1974, the points of claim were to be served "in the very near future." After another year, "one or two points on the figures were still outstanding." The only conceivable encouragement which the plaintiffs' solicitors gave to the defendants was in April 1975, when they agreed to the explosion claim being included. They could well have refused and made the present application at that stage. No doubt in fact they applied their minds not to the current arbitration, but to whether the plaintiffs ought to insist upon separate proceedings in respect of the explosion claim, which incidentally has still not been included. If the points of claim had been delivered shortly thereafter, it might have been said that there was acquiescence, but nothing which was said or done by the plaintiffs or their solicitors could have led the defendants to think that they could delay delivery of the points of claim for a further year. That delay is said to have been caused by the decision in Miliangos v. George Frank (Textiles) Ltd. [1975] Q.B. 487; [1976] A.C. 443 and the new possibility of making a claim in German marks. But this possibility existed in relation to arbitrations long before then and, in any event, the points of claim could have been delivered and subsequently amended.

I am therefore driven to conclude that the delay in delivering the points of claim was both inordinate and inexcusable and, further, that no significant part of the delay was induced by the conduct of the plaintiffs.

The plaintiffs claim that they have thereby suffered serious prejudice in three ways. Two of these I accept.

Destruction of documents

The plaintiffs say that under German law records do not have to be preserved after seven years and that some may have been destroyed. German law does not appear to require the destruction of documents and, if they have been destroyed, the plaintiffs have no one to blame but themselves.

Witnesses

Sixteen senior employees engaged in the design and building of these vessels are now dead, retired or have left the plaintiffs' employment. In addition, one of the five guarantee engineers is dead and three left the plaintiffs' employment many years ago. The defendants say that statements should have been taken from them. There is something in this, but such statements would have been of limited value unless related to the points of claim. The defendants also say that in so far as the witnesses are dead, they died before the proceedings could have been heard even if there had been no delay and, further, that in so far as recollections have dimmed, again, they would have dimmed before the hearing in any event. I accept that the hearing might not have taken place before September 1973, when Herr Erlinwein died and would not have taken place before Herr Hofman died in June 1971. But Herr Hofman was an assistant manager in the electric lay-out department and his death made the recollection of Herr Leo, the head of the department, all the more vital. He died in February 1977.

Nature of the defence

The defendants' claims are based upon repair costs, replacement items, port expenses and damages for delay over a period stretching back to 1965-66, including many ship repair firms and many ports. The yard had no opportunity of checking many of them before the points of claim were received and it was then far too late to do so. In addition, and perhaps even more important, assuming that the various breakdowns are proved, the arbitrator will have to decide whether the cause was something for which the plaintiffs were responsible or was due to poor seamanship, bad maintenance and abuse of the vessel's machinery. If, and to the extent that, they were not the fault of the plaintiffs, I do not see how the plaintiffs can hope at this stage to collect the necessary evidence to ensure that justice is done.

I am satisfied that if the proceedings had been pursued by action, I should have dismissed them for want of prosecution. It follows that the defendants' inaction was repudiatory and that, the plaintiffs having accepted it as terminating the arbitration agreement, I should grant them an injunction restraining the defendants from proceeding further with the arbitration agreement.

The share deal dispute

In June 1970, the plaintiffs and others agreed to sell their shareholdings in Gregg International Publishers Ltd. The purchaser was Raytheon Ltd., the defendants. The contract contained the usual warranties as

to the balance sheet, stock valuation, taxation, book debts, litigation, and so on. By clause 11 it was provided:

"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 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."

Disputes arose after completion and on April 28, 1971, the defendants wrote to the plaintiffs and to Mr. Teesdale who was another vendor claiming indemnity for losses consequent upon alleged breaches of the warranties. The total amount claimed was about £500,000 and it was advanced under a number of different heads. The plaintiffs' solicitors sent a detailed reply denying liability in a letter dated October 21, 1971, and asked for further details of the claim which were provided in November and December 1971. Correspondence continued between the parties and on April 14, 1972, the defendants' solicitor, Mr. Leslie Wainstead, asked that the dispute be referred to arbitration. A formal application for arbitration was made to the International Chamber of Commerce by the defendants in June 1972.

The defendants had suggested that the venue be changed from Geneva to London and in July 1972, the I.C.C. confirmed this change and also called upon each party to pay a deposit of U.S. $15,000 to secure the arbitrator's fees and the administration charge. The plaintiffs failed to pay their deposit and in Febuary 1973, the defendants paid it in order to get the proceedings under way. This default by the plaintiffs was a constant source of irritation to the defendants, but does not seem to have had any causal connection with the delays which were later to occur. Exercising hindsight, a more serious problem was created by the change of venue because Mr. Wainstead took the view, which he still maintains, that, save in so far as the arbitral procedure was prescribed by the I.C.C. rules, the law of Geneva and not the Arbitration Act 1950 would apply.

The plaintiffs complain of delay during the winter of 1972-73, but I do not think that this was of any importance. By May 1973, Mr. Desmond Miller Q.C., Mr. Michael Mustill Q.C. and Mr. I. F. H. Davison had been appointed as arbitrators. On May 2, 1973, there was a meeting for directions. An order was made that points of claim be delivered within 21 days, unless the defendants wished to rely upon their letters which had already outlined their claims. In fact, the defendants relied upon the letters. Points of defence were to be delivered 21 days thereafter and in fact a detailed pleading was delivered on June 14, 1973. Points of reply were ordered for 14 days thereafter with discovery 21

days after the close of pleadings and inspection 21 days after discovery. The arbitrators also fixed December 3, 1973, as the date for the hearing.

In July 1973, the defendants asked for and were granted an extension of time for filing points of reply. On October 5, 1973, the plaintiffs' solicitors complained of lack of progress and, in particular, of the fact that discovery would be time consuming and could not begin before pleadings were closed. They, therefore, suggested that the date for the hearing would have to be vacated. On November 20, 1973, the points of reply were delivered and the arbitrators (a) ordered discovery within a little under four months and (b) fixed a new date for the hearing in June or July 1974.

Lists of documents were exchanged in May 1974 and at the same time the defendants applied for a further short adjournment of the hearing date until August 1974, on the grounds that two witnesses in the United States were not available in June or July. The plaintiffs for their part complained that discovery by the defendants was wholly inadequate.

This led to yet another meeting for directions on June 4, 1974. The second date for hearing was vacated by consent, but there was considerable discussion about discovery. On the evidence it is quite clear that Mr. Wainstead gave an undertaking to give specific discovery as set out in a form which appears in the bundle of correspondence, subject to two minor qualifications contained in a letter from him dated June 18, 1974. The arbitrators directed that discovery should be completed by the end of August 1974, notwithstanding that Mr. Wainstead had said that in view of "the formidable nature of the task" he might not be able to give discovery within this period, although he was making every effort to do so.

On October 1, 1974, the parties once again appeared before the arbitrators. Mr. Wainstead said that he had a further 1,000 relevant documents in his possession and that he had been unable to comply with the time table. A list would be delivered within a week. In addition two further files had come to light each containing about 100 documents and a list would be delivered within two weeks. The arbitrators took the view that no further order could profitably be made until they were satisfied that discovery was complete and they adjourned until November 15, 1974.

During October two further lists of documents were served by Mr. Wainstead, but by November 15 discovery was still not complete. Various other matters were dealt with by the arbitrators on that day and in particular, the hearing was re-fixed for September 29, 1975. This was the third date which had been fixed.

In December 1974 eleven supplementary lists of documents were served by Mr. Wainstead. The plaintiffs' solicitors complained in March 1975 that they had been unable to relate the lists to the documents disclosed and further complained that there still had not been full compliance with Mr. Wainstead's own undertaking of June 1974.

On July 3, 1975, the arbitrators met yet again and considered the problem of discovery. Mr. Wainstead said that he had given full disclosure of all documents under his direct control and that he had asked

the defendants in the U.S.A. to make an additional search for any documents relevant to discovery as understood in English law. He also undertook to verify discovery by affidavit. The September hearing date was abandoned and the arbitrators suggested that they should meet again later in the month to give further directions. However, after discussions between the plaintiffs' solicitors and Mr. Wainstead, the former decided to seek an order from the High Court concerning discovery and also the provision by the defendants of security for costs. Accordingly, by a letter dated July 22, 1975, they invited the arbitrators to adjourn the proceedings generally with liberty to either party to restore. The arbitrators made an order accordingly.

On October 9, 1975, before any application had been made to the High Court, Mr. Wainstead told the plaintiffs' solicitors that a bundle of documents was on its way to him from the defendants in the U.S.A. The plaintiffs' solicitors replied by letter dated October 15, 1975, that in the circumstances they would wait for the defendants' next (and sixteenth) list of documents before taking the matter any further. They also asked that any new documents should be identified as such. The documents in fact arrived from the U.S.A. on or about October 23, 1975.

Apart from a "without prejudice" meeting in December 1975, it was over three years before the plaintiffs' solicitors heard anything more from the defendants or from Mr. Wainstead. On November 16, 1978, they received a letter from Mr. Wainstead offering inspection of a report by Cooper & Lybrand and of several thousand invoices on which the report was based. This was apparently relevant to one item of claim - the slow moving stock item. Mr. Wainstead also said that he was preparing a comprehensive substitute list of documents. This was in fact delivered on December 13, 1978, but meanwhile the plaintiffs' solicitors had notified him that they had proposed to institute the present proceedings. This was done by a writ issued on December 1, 1978.

Mr. Wainstead has two answers to the plaintiffs' complaint of inordinate and inexcusable delay. The first is that he is a single-handed practitioner and that early on in the proceedings it had become apparent to him that he could entrust the task of discovery to no one else. Accordingly, he could only get on with it "at such times as I could spare from any other work." I am sure everyone sympathises with the plight of the one-man firm. But the short answer is that they should not take on work which they cannot handle. The second answer is that there was an agreement that the arbitration should stand adjourned until after an application had been made to the High Court by the plaintiffs in relation to discovery and security for costs. He says that the plaintiffs never made any such application and that, therefore, the arbitration still stands adjourned by consent. This explanation ignores the sensible letter from the plaintiffs' solicitors dated October 15, 1975, telling Mr. Wainstead that they would take no further steps until the defendants' next list of documents was served. I say "sensible" because that list might have resolved the whole problem of discovery. Security for costs was a quite separate matter, which might not have been worth pursuing by

itself, bearing in mind the likelihood of the court taking account of the plaintiffs' failure to contribute their half of the I.C.C. deposit. Furthermore, Mr. Wainstead has never suggested that the plaintiffs' failure to seek an order on discovery caused him to abate his efforts to comply with his undertaking given in June 1974. His astonishing lack of progress with discovery was in no way attributable to anything said or done by the plaintiffs' solicitors and, in the light of their letter of October 15, he had not the slightest reason to think and did not think that the plaintiffs were content that he should do other than comply promptly with his own undertaking.

On these facts I have no doubt that the defendants' delay in prosecuting the proceedings generally, and in particular in relation to discovery, would, if it had occurred in litigation, have rightly been characterised as inordinate and inexcusable.

I now have to consider whether the plaintiffs have been prejudiced by the delay. As a result of that delay I doubt whether it would have been possible to have arranged for a hearing before the summer of 1979. This would have been nearly nine years after the transaction. Mr. Marcus Jones, appearing for the defendants, submits that recollections will be irrelevant and that the claim falls to be determined on the basis of contemporary documents and, in particular, the company's accounts. The conflict between the parties will, he says, be as to matters of law and accountancy practice. No doubt he is right, working at the matter from the point of view of the defendants. Indeed, this is an important feature of the case. As Mr. Mark Waller, appearing for the plaintiffs, pointed out, delay usually prejudices the claimant as much or more than the respondent. But in this case the defendants as claimants will have no problem.

But the matter is quite otherwise from the point of view of the plaintiffs as respondents in the arbitration. Their defence rests in most cases upon allegations that the matters relied upon as constituting breaches of warranty were fully explained to the defendants at or about the time when the contract was concluded. These explanations were all oral. Furthermore, in the case of one head of claim, there is an issue as to whether a particular document is a forgery. Personal recollections will be vital to sustain these defences. It may well be that those concerned prepared proofs of evidence when the hearing was first fixed for December 1973, but at that time they had had no discovery. They will now have to check their recollections against discovery (which may still not be complete) and this will be extremely difficult.

The prejudice which the plaintiffs have suffered as a result of the defendants' delays is, in my judgment, most serious.

In these circumstances, I have no doubt that if the dispute between the parties had been the subject matter of an action, I should have made an order dismissing the defendants' claim for want of prosecution. On the view which I take of the law, the plaintiffs could have asked the arbitrators to make an award in similar terms. Instead they have issued their writ and elected to treat the defendants' conduct as repudiatory. I think on the facts they were entitled so to do. This terminated

the arbitration agreement. As the defendants do not accept that this is the position, I am entitled to order them to desist from taking any further action in purported pursuance of the arbitration agreement.

Solicitors: Norton Rose, Botterell & Roche; Richards, Butler & Co.; Herbert Smith & Co.; Leslie Wainstead.

[Reported by MRS. CLARE BARSBY, Barrister-at-Law]

The defendants appealed to the Court of Appeal.

The second appeal was heard first.

Mark Saville Q.C., V. V. Veeder and Brian McClure for Raytheon Ltd.

Mark Waller Q.C. and Julian Chichester for the Greggs and Kelly.

Gerald Butler Q.C. and Giles Caldin for South India Shipping Corporation.

Kenneth Rokison Q.C. and David Grace for Bremer Vulkan Schiffbau und Maschinenfabrik.

November 23. The following judgments were read.

LORD DENNING M.R. 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 defendant will pay up or settle. Where the try-on is unsuccessful - and the defendant resists 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 the defendant 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 these courts do anything about it?

Just see what has happened in these three cases. In the first case (the second appeal) it is 13 years since five big bulk carriers were built and delivered to the owners. They have sailed the oceans ever since earning money for their owners. The owners now make claims for damages against the builders. Starting modestly, the claims now come to a large figure. It is so large 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 as 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. 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 - the claimants delivered those portentous points of claim. The judge has held that their

delay was inordinate and inexcusable, and that the builders had suffered serious prejudice from it. Is the arbitration to be allowed to go on?

In the second case (the first appeal) it is nine years since some shareholders called Gregg in a publishing company sold their holding to Raytheon Ltd. 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 Q.C., Mr. Michael Mustill Q.C. and Mr. I. A. H. Davison. The 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 the claimants, Raytheon Ltd., had not given proper discovery. It was a case where full discovery was essential. The claimants 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 U.S.A. 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 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 Q.C. had left the bar and become a man of business. Mr. Michael Mustill Q.C. 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 the claimants' solicitor wrote offering inspection of thousands of documents. It will take a long time before these can be analysed and the case ready to be heard. And then much will depend on oral conversations 10 years before when the shares were sold. The judge held that the delay of the claimants was inordinate and inexcusable and that the prejudice to the respondents would be most serious. Is the arbitration to be allowed to go on?

The third case is not before us, but it is so pertinent that I would mention it. In 1969, 10 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 in over $200,000. 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 January 3, 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 Andre et Compagnie S.A. v. Marine Transocean Ltd. (The Splendid Sun) [1980] 1 Lloyd's Rep. 333.

We had a good deal of discussion about the facts in our two cases: especially as to 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 court cases are concerned, even when there has been acquiescence up to a point, nevertheless if the plaintiff 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 plaintiff'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. ante, pp. 917 - 918, on this point. I do not think we need pause on the unreported cases of County & District Properties Ltd. v. Lyell (unreported), July 12, 1977, Court of Appeal (Civil Division) Transcript No. 314 of 1977, C.A.; Murrayfield Real Estate Co. Ltd. v. C. Bryant & Sons Ltd. (unreported), July 20, 1978, Court of Appeal (Civil Division) Transcript No. 473 of 1978, C.A. 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. [1973] Q.B. 1, Bridge J. held that an arbitrator had no power to dismiss a claim for want of prosecution. In the present cases Donaldson J. ante, pp. 915 - 925, has held that an arbitrator has the power.

To decide between those 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 In re Crighton and Law Car and General Insurance Corporation Ltd. [1910] 2 K.B. 738, 745. He also has the powers set out in paragraph f of Schedule 1 to the Arbitration Act 1889, and repeated in section 12 (1) of the Arbitration Act 1950. These require the parties to do "all other things which during the proceedings on the reference the arbitrator... may require."

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 In re Unione Stearinerie Lanza and Wiener [1917] 2 K.B. 558. 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 C.J. said, at p. 561: "The words in clause (f) [of Schedule 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 Lord Reading C.J. "the words in clause (f)... do not give the power to order a stay of proceedings..."

This view of the law has been accepted by practitioners: and the parties at arbitrations have taken advantage of it. Especially respondents 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 the Report of Committee on the Law of Arbitration (1927) (Cmd. 2817) and by myself in Associated Bulk Carriers Ltd. v. Koch Shipping Inc. [1978] 1 Lloyd's Rep. 24, 26. In 1978 the Commercial Court Committee in their Report on Arbitration (1978) (Cmnd. 7284) observed, at para. 57:

"A favourite ploy by those who seek delay is to ignore the timetable 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 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 section 5 of the Arbitration Act 1979, but it only applies to arbitrations started after August 1, 1979.

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 section 8 of the Arbitration Act 1934, now replaced by section 12 (6) of the Arbitration Act 1950, which provides:

"The High 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 obedience. 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 section 12 (6) is exhaustive: that the court can only intervene in the cases specified in (a) to (b) 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 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 S.A. (The Angelic Grace) [1980] 1 Lloyd's Rep. 288.

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 the following 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. (1863) 1 H. & M. 130; Kitts v. Moore [1895] 1 Q.B. 253. 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 (1878) 9 Ch.D. 89; Jackson v. Barry Railway Co. [1893] 1 Ch. 238, 249.

Mr. Saville 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. (1883) 11 Q.B.D. 30. 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 Mr. Waller referred us to a case in 1865: Pickering v. Cape Town Railway Co. (1865) L.R. 1 Eq. 84. 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, saying, at pp. 87-88:

"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, 7th ed. (1891), that case was cited as authority for this proposition, at p. 204:

"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 (1902) 2 S.R. (N.S.W.) Eq. 112 and underlies a case in Ontario Danforth Travel Centre Ltd. v. British Overseas Airways Corporation (1972) 29 D.L.R. (3d) 141. In Halsbury's Laws of England, 3rd ed. vol. 21 (1957), p. 406, 4th ed., vol. 24 (1979), 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 respondent is not prejudiced by delay. On the other had, 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 principle. They are imposed by more general considerations, such as Viscount Simonds remarked in Lister v. Romford Ice and Cold Storage Co. Ltd. [1957] A.C. 555, 576; and Lord Wilberforce and Lord Edmund-Davies approved in Liverpool City Council v. Irwin [1977] A.C. 239, 255, 266-267; and I spelt out in Shell U.K. Ltd. v. Lostock Garage Ltd. [1976] 1 W.L.R. 1187, 1196 (first category).

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 Corporation v. Citati [1957] 2 Q.B. 401, 430-434. That was the approach favoured by Lloyd J. in The Splendid Sun [1980] 1 Lloyd's Rep. 333, 335, when he said: "The rest 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

Before us Mr. Saville raised a point which was not taken below. It only applies to the shares case, Gregg v. Raytheon Ltd., 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 Whitworth Street Estates (Manchester) Ltd. v. James Miller & Partners Ltd. [1970] A.C. 583, 616, per Lord Wilberforce.

Mr. Saville took us through the rules of the I.C.C. 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 I.C.C., and also on article 31 of the I.C.C. rules:

"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."

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 article 19. No hearing could be held until the terms of reference were drawn up.

I regard the arbitration in London under the I.C.C. 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 I.C.C.

Conclusion

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 J. and Lloyd J. - 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 claimant 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. We are in for some exciting times. But for the reasons I have given I would uphold the decision of Donaldson J. in these two cases, and dismiss the appeals.

ROSKILL L.J. These two appeals from decisions of Donaldson J. dated April 10, 1979, raise, as the judge said at the outset of his judgment,

ante, p. 915E-F, 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 section 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 Corporation Ltd., 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, 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, 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 [1978] A.C. 297 and Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229. The judge summarised those principles in six succinct paragraphs, ante, pp. 916 - 918. Subject to what I say in the next sentences on the question of acquiescence - see paragraph 5 of the judge's summary - I accept as correct and gratefully adopt the judge's summary without repetition. Mr. Butler 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 Mr. Butler's argument is inconsistent with what Salmon L.J. said in Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229, 232.

The question for decision before him was, and in this court is, whether those principles have any application to the conduct of arbitrations 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: ante, p. 921D-F. He has further held, at pp. 482-483, 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 upon 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, e.g. 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. [1973] Q.B. 1, where he 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 claimant's claim in that arbitration for want of prosecution.

Before us Mr. Saville, for the appellants in the Raytheon appeal, argued as almost his last submission that the judge had reached the wrong conclusion upon the facts of that case. Mr. Butler, for 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) Mr. Saville's submissions on the other issues so far as relevant to the Bremer appeal. In neither appeal did this court find it necessary to call upon counsel for the respondents to support the judge's conclusions upon the facts of the case for, notwithstanding the arguments of counsel for each of the appellants, I think the judge's conclusions upon 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, first, whether 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, whether the court has power to interfere in such circumstances by injunction. It is convenient to mention at this juncture that since the instant decisions, Lloyd J. in The Splendid Sun [1980] 1 Lloyd's Rep. 333, 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 decisions Lloyd J. granted such an injunction, resting his decision upon 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 upon this foundation rather than upon 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 Mr. Waller nor Mr. Rokison, for the respective respondents, who as the 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. Mr. Waller dealt with this question only towards the end of many submissions, while Mr. Rokison, 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 upon 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 in 1927 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 upon 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 on Arbitration (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 a 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 section 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 McAlpine & Sons Ltd. [1968] 2 Q.B. 229 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 Bristol Corporation v. John Aird & Co. [1913] A.C. 241, 256, it was not until the Common Law Procedure Act 1854 that Parliament gave to the courts the limited power of stay which section 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 In re Smith & Service and Nelson & Sons (1890) 25 Q.B.D. 545, where it was held that the only remedy for unilateral revocation of a submission to arbitration before section 1 of the Arbitration Act 1889 was enacted lay in an action for damages for breach of contract. But the Act of 1854 is singularly silent as to the powers as distinct from the duties of arbitrators - for example, section 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 Act of 1854 dealing with arbitrations were repealed by Schedule 2 to the Arbitration Act 1889. That statute in section 4 re-enacted in a somewhat different form section 11 of the Act of 1854. By section 2 of and Schedule 1 to the Act of 1889 nine provisions respectively lettered a to i were ordered to be implied into submissions to arbitration unless the parties had otherwise provided. The former section 15 found new and extended life in paragraphs c, d and e of that schedule, provisions which were castigated by the MacKinnon Committee as of no practical value: see paragraph 5 of that report. It is to be observed that paragraph fcreated 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, Schedule 1 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 the judge referred when this matter was before him. In In re Crighton and Law Car and General Insurance Corporation Ltd. [1910] 2 K.B. 738 a Divisional Court which included Scrutton J. held that an arbitrator had both inherent power and also power under paragraph f of Schedule 1 to the Act of 1889 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 Schedule 1 be filled by legislation. More important, in In re Unione Stearinerie Lanza and Weiner [1917] 2 K.B. 558, 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 In re Crighton [1910] 2 K.B. 738 to the length necessary to enable security for costs to be ordered by an arbitrator. Viscount Reading C.J. said, at p. 561:

"I do not think that 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 Act of 1934 and now finding its place in section 12 (6) (a) of the Arbitration Act 1950.

It was faintly suggested that we should overrule the Unione case [1917] 2 K.B. 558. 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 C.J., 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: see ante, p. 921E-F

The judge relied on the decision of this court in Chandris v. Isbrandtsen-Moller Co. Inc. [1951] 1 K.B. 240 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 had also impliedly reversed the decision in the Unione case [1917] 2 K.B. 558.

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. Conde d'Eu Railway Co. (1887) 51 J.P. 230. That 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 nisi prius judge, nonetheless had no power to strike out the claims that were before him, but that he must adjudicate upon them: see the brief report of the successful argument of the then Attorney-General and also of the judgment of the court. That decision was before the Act of 1889, but for what it is worth supports the conclusion at which I have independently arrived.

One reason which Bridge J. gave in the Crawford case [1973] Q.B. 1 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 the judge thought there was an obligation on both parties to enable the matter to be prepared for trial: see Donaldson J. ante, pp. 918 - 920 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.

Mr. Saville 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 upon 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 section 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 section 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 upon 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 section 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, attempting 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 are 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. quoted, at p. 476, 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 section 12 (6) of the Act of 1950 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 the Raytheon appeal Mr. Saville advanced two further arguments, neither of which, he frankly admitted, had been advanced by counsel appearing for the claimants in that case before the judge.

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 Mr. Saville 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 ("I.C.C."), or perhaps the Institute of Arbitrators in this country. The second was that even if the three arbitrators appointed by the parties under the I.C.C. rules had no jurisdiction to dismiss for want of prosecution, nonetheless under those rules the respondents' remedy was to apply to the I.C.C. Court of Arbitration, a body for which their rules make provision, for an appropriate order which Mr. Saville 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 I.C.C. 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 Mr. Waller.

The arbitration clause in the contract concerned in the Raytheon appeal, which was dated June 2, 1970, is found in clause 11 of that contract and reads:

"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 I.C.C. 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 Arbitrum" in a presentation book of essays, Liber Amicorum, requires no further consideration.

But I find it difficult to accept Mr. Saville's suggested distinction between institutional and non-institutional arbitration, for which he claimed some support in a textbook entitled Handbook of Institutional Arbitration in International Trade (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 I.C.C. arbitrations in Dalmia Dairy Industries Ltd. v. National Bank of Pakistan [1978] 2 Lloyd's Rep. 223, 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 Mr. Saville 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 I.C.C. 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 I.C.C. 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 articles 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 award, the arbitrator shall 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 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 upon by Mr. Saville, reads:

"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 articles 1, 2, 3 and 4 of the statutes of the Court of Arbitration.

In paragraph 40 of his affidavit Dr. Eisemann claims that I.C.C. 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 was merely stalling for time, no extension would be granted; and the claimant would be warned by the I.C.C. 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 of Institutional Arbitration in International Trade, to which I have already referred. In a passage dealing with I.C.C. arbitration under the most recent rules (we were told that article 13 of the most recent rules is virtually identical with article 19 of the rules with which we are concerned), the writer says, at 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 rights to defend its interest."

This passage hardly supports Mr. Saville's submissions or suggests that Dr. Eisemann's paragraph 37 is justified by the rules, whatever may happen in practice. Moreover, to my mind paragraph 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) Mr. Saville's submissions regarding the possible distinction between "institutional" and other arbitrations and especially his submission on the I.C.C. 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 (ante, p. 921), the judge also held, at p. 924, 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 the claimants in each case 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.

Mr. Saville 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, section 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 section 12 (6) (b), a submission much relied upon by Mr. Saville 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 paragraph, as indeed they had indicated in correspondence at one time that they intended to do.

Mr. Saville 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 claimants in this connection, the respondents had equally done nothing and therefore were equally in breach of their obligation vis-ˆ-vis the claimants, as the claimants were to the respondents, if the judge's implied term were correctly imported into the agreement to arbitrate. Mr. Saville 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.

Mr. Butler, however, did not adopt this part of Mr. Saville's argument, 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 Mr. Saville 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, Mr. Saville argued, he was not entitled to do without the leave of the court in view of the provisions of section I 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 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

upon 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 [1976] Q.B. 319, in terms later unanimously approved by the House of Lords [1977] A.C. 239. Mr. Saville devoted the greater part of his attack upon 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 upon which a court will imply a term into a contract. As their Lordships held in Liverpool City Council v. Irwin, there are certain classes of contract 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 their Lordships 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 at pp. 254-255 and per Lord Edmund-Davies at pp. 266-267. There are plenty of other examples of the operation of this principle in the law of contract. For example, sections 13 and 14 of the Sale of Goods Act 1893, and section 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.

Mr. Saville's attack upon the implication into the agreement to arbitrate which the judge held to be correct has, to my mind, considerable force. Mr. Waller 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 Corporation v. Citati [1957] 2 Q.B. 401, he argued that following the reasoning of the House of Lords in Liverpool City Council v. Irwin [1977] A.C. 239 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 Mr. Waller 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 [1975] 2 Q.B. 401 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. [1979] 1 Lloyd's Rep. 212, a decision against which I understand their Lordships' House has recently refused leave to appeal.

Mr. Saville 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, such an agreement to arbitrate was not inefficacious or futile without making the implication, especially as the aggrieved party could always invoke his statutory remedies and in particular in the Raytheon appeal a remedy under section 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, e.g. by an appropriate application to the High Court under section 12 (6) of the Act of 1950. 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 upon 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 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 Mr. Rokison 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. Mr. Rokison frankly admitted to us that he displayed little enthusiasm for the suggestion when the judge first made it and that 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 Mr. Rokison 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.

Mr. Saville 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 give 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 be insisted upon, 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 [1957] 2 Q.B 401 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 section I 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 L.J. in Frota Nacional de Petroleiros v. Skibsaktieselskapet Thorsholm [1957] 1 Lloyd's Rep. 1, 5 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 section 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, Mr. Saville 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 upon the rescission of the agreement to arbitrate.

I now turn to the question whether the court has power to grant an injunction restraining the claimants 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. Mr. Saville argued that before section 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 Mr. Saville's main submission 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.

Mr. Saville 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 unreported decision of this court - Japan Line Ltd. v. Aggeliki Charis Compania Maritima S.A. (The Angelic Grace) [1980] 1 Lloyd's Rep. 288, 292 where it was stated by Lord Denning M.R. that the High Court had jurisdiction 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 Mr. Saville's suggested dichotomy he relied upon the decision in Kitts v. Moore [1895] 1 Q.B. 253, 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 per Lindley L.J. at pp. 259-260 and per A. L. Smith L.J. at p. 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. Mr. Saville relied upon Den of Airlie S.S. Co. Ltd. v. Mitsui & Co. Ltd. (1912) 17 Com.Cas. 116 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 Mr. Waller demonstrated, as he submitted, the development of the relevant equitable jurisdiction before the passing of the 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 references to three of the cases only will suffice. First and foremost is Pickering v. Cape Town Railway Co., L.R. 1 Eq. 84, a decision of Page Wood V.-C. later varied by Lord Cranworth L.C. The Pickering case has had a curious history and we are indebted to Mr. Waller and his junior for having traced its history . It was treated in the 7th ed. of Russell on Arbitration as authority for the proposition, at p. 204, 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."

The passage and the relevant reference to the Pickering case was however later dropped in subsequent editions of Russell and the case is not mentioned in the current or indeed any recent edition of that work. It is, however, cited in Halsbury's Laws of England, 4th ed., vol. 24 (1979), para. 1038, as authority for the proposition:

"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, L.R. 1 Eq. 84 there was a contract between the plaintiff 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 upon 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, at pp. 87-88:

"We have nothing in this court in the nature of a writ of prohibition authorising 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 L.C. subsequently discharged this injunction: L.R. 1 Eq. 89. As I read the very brief report of his 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 L.C. is reported as having said, at pp. 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 upon 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.

Mr. Saville strongly argued that the Pickering case 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 was, he said, a case where the agreement to arbitrate had been impeached. He reinforced this submission that Pickering 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 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 section 12 (6) of the Act of 1950, 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, 9 Ch.D. 89 Sir George Jessel M.R. enjoined an arbitrator from acting because of his own unfitness. That case on its facts, of course, falls comfortably within Mr. Saville's first category. But Sir George Jessel M.R. said, at p. 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., 11 Q.B.D. 30, 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 Sir George Jessel M.R. in Beddow v. Beddow, 9 Ch.D. 89, 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 per Brett L.J. pp. 35 and 36 and Cotton L.J. at pp. 40 and 41. Cotton L.J. pointed out that Beddow v. Beddow proceeded upon the basis that the plaintiff had a legal and equitable right to protect by injunction.

At the present day the problem to which the North London Railway case, 11 Q.B.D. 30 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: see [1979] 3 W.L.R. 471, 480. I do not think the North London Railway case decides more than, as is indeed clear law, 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 Siskina (Owners of cargo lately laden on board) v. Distos Compania Naviera S.A. [1979] A.C. 210, 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 he irrecoverable.

There is always a tendency where courts, whether of equity or 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 Mr. Saville's suggested dichotomy. No doubt many of the cases I have referred to and others to which we were referred in argument and which were also referred to by Donaldson J. in his judgment, can be grouped or categorised as Mr. Saville 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 claimants' 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 claimants' 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 claimants can go on with the hearing which ex hypothesi cannot be fair to the respondents.

I think, therefore, 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 Act of 1979 does not apply, without any penalty being imposed upon 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. Mr. Saville 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. Some cases, for example, an action for negligence against solicitors, may require proof of the prospects 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 claimants' 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 respondents 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] A.C. 356, 371 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 Mr. Saville 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 clause 9 of the agreement between the claimants and the respondents one finds that the indemnity upon which the claimants 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 Mr. Saville, 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 upon which leave to join Mr. Teasdale might be granted. Since this was a new point taken for the first time in this court, Mr. Saville could only take it with our leave and we were only prepared to grant such leave on terms which Mr. Saville declined to accept. The Teasdale point, therefore, disappears.

The second matter was raised by Mr. Butler. 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 upon 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 his judgment Lord Denning M.R. 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.

CUMMING-BRUCE L.J. I agree that both appeals should be dismissed on the grounds stated by Lord Denning M.R. and Roskill L.J. I take the same view as Roskill L.J. of North London Railway Co. v. Great Northern Railway Co., 11 Q.B.D. 30. 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 case [1979] A.C. 210, 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 claimants. The decision of Page Wood V.-C. in Pickering v. Cape Town Railway Co., 1 Eq. 84 is correctly stated in Halsbury's Laws of England4th ed., vol. 24 (1979), 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. [1968] 2 Q.B. 229. 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.

Solicitors: Lovell, White & King (instructed only on the appeal); Herbert Smith & Co.

Richards, Butler & Co.; Norton Rose, Botterell & Roche.

C. N.