Laconian Maritime Enterprises Ltd v Agromar Lineas Ltd

• Jurisdiction: South Africa
• Citation: 1986 (3) SA 509 (D)

Laconian Maritime Enterprises Ltd v Agromar Lineas Ltd
1986 (3) SA 509 (D)

1986 (3) SA p509

Citation	1986 (3) SA 509 (D)
Court	Durban and Coast Local Division
Judge	Booysen J
Heard	November 6, 1984
Judgment	August 27, 1985

Flynote : Sleutelwoorde B

International law — Recognition of foreign arbitral award — Plea of res judicata — General rule of South African private international law that classificiation done in terms of lex fori — Generally accepted and logical that rules C relating to res judicata characterised as procedural and therefore governed by lex fori — Where United States Court had held that action "time barred" as it had not been brought within three years' of arbitral award, Court held that proceedings in South Africa to recognise the same award did not involve the same subject-matter as South African law had no provision limiting recognition to awards made within three D years prior to commencement of the proceedings — Plea of res judicata dismissed.

International law — Recognition of foreign arbitral award — Defence of prescription — Choice of law — No indication in contract that parties had given the choice of which law was to govern their contract any thought — Court E looking at contract and surrounding circumstances in order to presume an intention of the parties — Although the counting of the number of indicators unsatisfactory, a large number of indicators pointing one way would be a strong indication — Court holding that English law proper law of contract where this was the lex loci contractus and lex loci solutionis and F the law of the place where arbitration was to take place — Claim not prescribed under English law and in any event English law rules being procedural were not applicable — South African law of prescription applied — Section 13 (1) (d) of Prescription Act 68 of 1969 applicable where debtor of foreign company in spite of the fact that completion of prescription could thereby be delayed indefinitely — Defence of G prescription dismissed.

Headnote : Kopnota

The applicant applied for an order that an arbitration award made in London be made an order of Court in terms of the Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977. The respondent raised two defences, viz the exceptio H rei judicatae (based on a judgment of a United States District Court in Alabama) and prescription. The applicant was a Greek ship-owning and operating company and the respondent a Colombian charterer. During June 1977 the respondent's New York brokers and the applicant's London brokers negotiated by telex for a voyage charterparty in respect of the MV Kavo Delfini, owned by the applicant, for the carriage of grain from Buenos Aires to Barranquilla in Colombia. The charterparty was drawn I up in New York and the respondent's New York brokers signed and stamped it whereafter it was sent to London where the respondent's brokers stamped it and the applicant's brokers signed and stamped it. The charterparty provided for payment to be made in US dollars to a London bank and incorporated the US Carriage of Goods Act. In terms of the Centrocon arbitration clause which was applicable to the charterparty, disputes arising out of the contract were to be referred to arbitration in London. A dispute subsequently arose over the final account, the applicant claiming that it was owed US $16 000. Despite J being notified of the arbitration, the respondent

1986 (3) SA p510

A failed to nominate an arbitrator or attend the hearing and on 23 January 1979 the arbitrator handed down an award of $16 585 together with interest in favour of the applicant. On 22 November 1982 the applicant "filed" an action to enforce the arbitration in the US District Court for the Southern District of Alabama which held that as the action had not been filed within three years it was "time barred" in terms of 9 US B Convention s 207 and accordingly had to be dismissed. An expert in the law of the United States made an affidavit for the purpose of the present proceedings to the effect that if the action were to be brought again in any other jurisdiction in the United States of America the action would fail and the dismissal of the action ought to be regarded as a substantive dismissal as such statutes of limitation were regarded as "substantive" rather than "procedural". The applicant contended that the US judgment was not a bar to the action as it did not C concern the same subject-matter and that prescription was not a matter of substantive law but procedural law and that the South African law applied. The Court, faced with a conflict of laws,

Held, that the general rule of South African private international law was that classification was done in terms of the lex fori and, as there were no grounds for departing from the rule in the present case, it had to be applied.

D Held, further, in regard to the classification of the rules relating to the operation of res judicata, that the Court had to distinguish between rules of procedural law and rules of substantive law, the former being governed by the lex fori and the latter by the lex causae: it was however generally accepted and logical that the rules relating to res judicata were characterised as procedural and therefore governed by the lex fori.

Held, further, that the proceedings in the United States Court E did not involve the same subject-matter as the present proceedings: the United States Court was asked to recognise and enforce the award in terms of its legislation whereas the present Court was asked to enforce the arbitration award in terms of its legislation which differed from the United States legislation, inter alia, in that it had no provision limiting recognition to awards made within three years prior to commencement of the proceedings.

F Held, accordingly, that the plea of res judicata had to be dismissed.

Held, as regards the defence of prescription, that, as it appeared that the parties had not given the matter of the governing law any thought, the Court was required to decide from the contract and the surrounding circumstances what the intention of the parties was presumed to be.

Held, further, that, although counting factors indicating one or the other country's law was an unsatisfactory way of G deciding legal issues, a large number of indicators pointing one way would be a strong indication: on this basis English law seemed to be indicated as it appeared to be the lex loci contractus as well as the lex loci solutionis and London was the place where arbitration had to take place.

Held, accordingly, that the proper law of the charterparty as far as the performance of the obligation to make payment was concerned was English law and it followed that the claim for H recognition had not become prescribed by virtue of United States law nor by English law and in any event the English rules being procedural were not applicable: in the circumstances the South African law of prescription had to be applied.

Held, further, that, in terms of s 13 (1) (d) of the Prescription Act 68 of 1969, the debtor, not having been within the Republic since the debt became due, prescription had not I been completed and this was so even in spite of the fact that prescription might thereby be delayed indefinitely. Application granted.

Standard Bank of South Africa Ltd v Efroiken and Newman 1924 AD 171 applied.

Case Information

Application for the recognition and enforcement of a foreign arbitral award in terms of the Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977. The facts appear from the reasons for judgment.

M J D Wallis for the applicant.

P A M Magid SC for the respondent. J

1986 (3) SA p511

Cur adv vult. A

Postea (August 27).

Judgment

Booysen J:

This is an application for an order that an arbitration award handed down on 23 January 1979 in an B arbitration in London between the applicant and the respondent be made an order of Court in terms of the Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977.

The respondent has raised two defences in these proceedings, the first being the exceptio rei judicatae, based upon a C judgment of a United States District Court in Alabama, and the second, prescription.

The facts may be stated as follows. The applicant is a company incorporated and registered with limited liability according to the laws of Greece and carrying on business as a shipowner and operator at Piraeus, Greece. The respondent is a company D incorporated and registered with limited liability according to the laws of Colombia carrying on business, inter alia, as charterer of ships at Barranquilla, Colombia. During June 1977 the applicant was the owner of a ship by the name of Kavo Delfini. The respondent's New York brokers were Chester Blackburn and Roder Inc, and their London brokers were Independent Chartering. Applicant's brokers were E Gourdomichaelis and Co (Chartering) Ltd of London. Although it is not clear from the papers, counsel were agreed that I should accept for the purposes of my judgment that the respondent's New York brokers and the applicant's London brokers entered into negotiations probably by telex with a view to concluding a voyage charterparty in respect of applicant's vessel, which was F en route to Buenos Aires, for the carriage of grain from Buenos Aires to Barranquilla in Colombia. After agreement had been reached by telex (I presume, in principle), respondent's brokers in New York drew up a voyage charterparty in New York which was dated 17 June 1977, and respondent's New York brokers signed it on behalf of respondent and placed their stamp on it. G Thereafter it was sent to London where respondent's London brokers stamped it. The charterparty provided inter alia as follows:

"It is this day... agreed between Gourdomichaelis and Co...