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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Tor Corporate AS v. Siopect Group Start Petroleum Corp Ltd & Ors [2008] ScotCS CSIH_9 (18 January 2008) URL: http://www.bailii.org/scot/cases/ScotCS/2008/CSIH_9.html Cite as: [2008] ScotCS CSIH_09, [2008] ScotCS CSIH_9, [2008] CSIH 9

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

Lord Macfadyen

Lord Kingarth

Lord Eassie

[2008] CSIH 9

P1890/06

OPINION OF THE COURT

delivered by LORD MACFADYEN

RECLAIMING MOTION

in the petition of

TOR CORPORATE A.S.

Petitioners and Reclaimers;

against

SINOPEC GROUP STAR PETROLEUM CORPORATION LIMITED and OTHERS

Respondents:

for

Judicial Review of a decision of Arbiters appointed under a contract

_______

Act: Currie, Q.C., Clark, Q.C.; Tods Murray LLP.

Alt (First Respondents): Ferguson Q.C., McBrearty; Simpson & Marwick

Alt (Second, Third and Fourth Respondents): No appearance.

18 January 2008

Introduction

[1] By this petition for judicial review the petitioners seek to set aside an arbitral award. The dispute which was submitted to arbitration arose out of a contract between the petitioners and the first respondents in terms of which the petitioners were to act as managers of a semi-submersible drilling unit owned by the first respondents. A preliminary issue has arisen as to whether the application for setting aside the award was timeously made. That issue was debated before the Lord Ordinary at a first hearing. She held that the application had not been timeously made and therefore by interlocutor dated 29 May 2007 dismissed the petition. The petitioners seek review of that interlocutor.

The arbitration

[2] The parties' contract provided by Clause 9 that:

"if any dispute should arise in connection with the interpretation and fulfilment of this Agreement same shall be decided by arbitration in the City of Edinburgh in accordance with Scottish Law ... ".

It is accepted by the parties that the arbitration is an international commercial arbitration within the meaning of Article 1 of the UNCITRAL Model Law, and that it follows that the Model Law applies to the arbitration (Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, section 66).

[3] The parties' dispute was submitted to arbitration under Clause 9 and the second, third and fourth respondents were appointed as arbiters. After sundry procedure the arbiters made an award, expressed in a document entitled "Note of Reasons, Findings and Order 20". The award was sent to the petitioners in electronic form on 15 May 2006. The formal award, signed by the arbiters, was sent to the petitioners under cover of a letter dated 17 May 2006 and received by them on 18 May 2006.

[4] Article 34 of the Model Law provides inter alia as follows:

	"(1)	Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this article.
	...
	(3)	An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the award ..."

[5] It is common ground between the parties that the Model Law leaves the form of an application for setting aside of an award under Article 34 to the domestic law. It is also common ground that in Scotland an application for setting aside takes the form of a petition for judicial review under Chapter 58 of the Rules of the Court of Session ("the Rules").

The application for setting aside

[6] As we have already noted, the petitioners have brought this petition for judicial review as the means of applying for setting aside of the arbiters' award. A question has been raised by the first respondents as to whether the petition constitutes an application which is timeous in terms of Article 34(3). That potentially turns on (a) when the petitioners "received the award", and (b) when the application for setting aside was "made". In the event, although the parties are not in agreement as to whether the award was "received" by the petitioners when the electronic copy of it reached them on 15 May 2006 or only when the formal signed award reached them on 18 May 2006, that does not affect the issue which requires to be determined. That is because the competing contentions as to the date when the application was made are that it was made on 15 August 2006 (the petitioner's contention) and that it was made on 21 August 2006 (the first respondents' contention). If the application was made on the former date, it was timeous whether the award was received by the petitioners on 15 or on 18 May 2006. Conversely, if the application was not made until 21 August, it was out of time, whichever was the date of receipt of the award.

[7] The issue for determination is therefore: when was the application for setting aside made? That requires consideration of the relevant provisions of the Rules and their effect in the particular circumstances in which this petition was brought before the court.

The relevant Rules of Court

[8] Subject to any other provision in the Rules the provisions contained in Chapter 14 apply to a petition presented to the court (Rule 14.1). Rule 14.2 provides inter alia as follows:

	"Subject to any other provision in these Rules, the following applications to the court shall be made by petition presented in the Outer House:-
	...
	(e)	an application to the supervisory jurisdiction of the court.

Chapter 58 of the Rules applies to the category of application mentioned in Rule 14.2(e) (Rule 58.1(1)). Rule 58.3(1) provides that an application to the supervisory jurisdiction of the court shall be made by petition for judicial review. The effect of these provisions, read together, is that an application to the supervisory jurisdiction of the court is made by petition for judicial review presented in the Outer House.

[9] Rule 14.5(1) provides for the making of the first order in a petition. It provides that on the petition being lodged, the court shall, without a motion being enrolled for that purpose, pronounce an interlocutor for such intimation, service and advertisement as may be necessary. Rule 14.5 does not, however, apply to petitions for judicial review (Rule 58.2). Substitute provision is made by Rule 58.7, which is in the following terms:

"On being lodged, the petition shall, without appearing in the Motion Roll, be presented forthwith to the Lord Ordinary in court or in chambers for ―
(a)	an order specifying ―
	(i)	such intimation, service and advertisement as may be necessary;
	(ii)	any documents to be served with the petition;
	(iii)	a date for the first hearing, ... or
(b)	any interim order;
and, having heard counsel or other person having a right of audience, the Lord Ordinary may grant such an order."

The effect of these provisions is that, when a petition for judicial review is lodged, a motion for a first order is enrolled (unlike the procedure in other petitions, where the first order is granted without enrolment of a motion); the petition and the motion (which does not appear on the motion roll) are forthwith presented to the Lord Ordinary; before granting the first order the Lord Ordinary hears counsel for the petitioner; and the first order deals with matters additional to those dealt with in the first order in other petitions, namely the matters mentioned in Rule 58.7(a)(ii) and (iii).

[10] Rule 4.3 regulates the lodging of processes. It provides inter alia as follows:

	"A process shall be lodged in every cause commenced by summons or petition when ―
	...
	(b)	in the case of a petition, the petition is presented to the Petition Department".

A process comprises (a) an inventory of process; (b) the principal writ; (c) an interlocutor sheet; (d) a motion sheet; and (e) a minute of proceedings (Rule 4.4(1)). These provisions apply to petitions for judicial review.

[11] It is convenient to take note also of the provisions of the Rules regulating the enrolment of motions. Rule 23.2 provides inter alia as follows:

"(1)	A motion by a party may be ―
	...
	(b)	enrolled in the process in the cause to which it relates in accordance with paragraph (2).
(2)	A motion may be enrolled ―
	(a)	by lodging it in Form 23.2 ... at the appropriate department of the Office of Court ...".

These provisions too apply to petitions for judicial review.

The evidence of the circumstances in which the application was made

[12] Before the Lord Ordinary reliance was placed on affidavits sworn by those involved in making and receiving the application. It is convenient, before turning to the parties' respective submissions, to summarise the evidence of those witnesses.

[13] The representative of the petitioners' solicitors who attended at the Petition Department of the Offices of Court was Mrs Claire Dickson. In her affidavit, she makes it clear that she has no actual recollection of the relevant events, and is reliant on written records. These included her court diary. It contains an entry dated Tuesday 15 August 2006 which is in the following terms:

"PET Tor Corporate for Jud Rev - lodge Petition."

The entry includes a tick, which she explained as meaning that she had completed that task on that date. She states that if the petition had been handed back to her, she would have marked an "X" against the entry, and would have made an entry on another date. Mrs Dickson's records also include her time record, which for 15 August 2006 contains an entry in the following terms:

"Had counsel sign Petition, thereafter lodged and checked counsel's availability for motion."

She states that had the petition been handed back to her it is likely that the relevant part of that record would have been to the effect that she "tried to lodge Petition", and there would have been an entry on a later date when the petition was lodged (unless that was done on a date when she was not at work - she worked only on Tuesdays, Wednesdays and Thursdays). She interpreted the entry in the time record as indicating that she arranged for counsel to sign the petition (not the counsel - Mr Alastair Clark - who was to appear at the hearing of the motion); that she then lodged the petition and enrolled the relative motion in the Petition Department; that she was probably advised by the clerk there that counsel would require to appear to move the motion; that she probably spoke to the partner dealing with the matter, Mr Michael Simpson, and was asked by him to arrange for Mr Clark to move the motion; and that she then checked his availability, probably ascertaining a range of suitable dates. Mrs Dickson states that there is no further relevant entry in her diary, and interprets that as meaning that the petition was not returned to her, and was accepted [in the Petition Department] in the form in which she presented it on 15 August. She further states that the next relevant entry in her time recording is on 17 August, and is in the following terms:

"Spoke to Christine at Ad Clerks, put entry in A Clark's diary and spoke to Pet Dept about the date."

She says that that means that she spoke to Christine Ferguson, Mr Clark's senior clerk, about the most suitable day for him, and made an entry in his diary. She would then have told the Petition Department when counsel was available, and thereafter the hearing would have been arranged.

[14] Mr Simpson, in his affidavit, records receiving instructions to raise proceedings for judicial review in relation to the arbiters' award. He instructed Mr Clark to prepare the petition, which he did. On about 11 August 2006, he asked his secretary to engross the petition for lodging, and gave instructions for an inventory of productions to be prepared. He also prepared a motion for a first order. On or before 15 August he handed the petition, inventory of productions and motion to Mrs Dickson. He says that he is almost certain that he did so on 15 August (a Tuesday), because Mrs Dickson works only on Tuesday, Wednesday and Thursday. Mr Simpson states that on 15 August Mrs Dickson reported that the petition had been lodged and the motion enrolled, and advised him that counsel had to appear to move the motion. Consequently he asked her to check Mr Clark's availability, and the availability of the court, and arrange for Mr Clark to appear on a suitable date. Thereafter, Mrs Dickson advised him that the motion would be heard on 24 August, and he dictated a letter of instruction to Mr Clark. Mr Simpson does not recollect when he dictated that letter, but it is dated 18 August, and was typed by his secretary early on that day. He believes that it was delivered to Mr Clark on Monday 21 August, but by another member of staff, because Mrs Dickson does not work on Mondays. Mr Simpson was in attendance in court on 24 August, when the motion was moved by Mr Clark and granted by Lord Drummond Young.

[15] The third affidavit placed before the Lord Ordinary was sworn by Gavin McLeod who was petitions manager in the Offices of Court. Like Mrs Dickson, he has no actual recollection of the relevant events. He states that the process reveals the petition and a motion for a first order, the date of enrolment being stated as 15 August. He states, however, that there is no way of knowing from the process when the motion was actually enrolled. He expresses himself as happy to accept Mrs Dickson's evidence that it was indeed enrolled on 15 August. Mr McLeod was asked to comment on the contention that the petition was presented on 15 August, in light of the fact that the petition was date-stamped 21 August and the interlocutor granting the motion was dated 24 August. He observes that there is nothing particularly unusual about the lapse of time between presentation and enrolment, on the one hand, and the interlocutor, on the other. In paragraph 6 of his affidavit, he postulates three possibilities to explain the date-stamp on the petition. These are expressed as follows:

"(i) I may have seen the Petition on 15 August 2006, advised Mrs Dickson that a hearing would be required, and returned the Petition to her while she arranged a date for the hearing; or (ii) I may have taken the petition on 15 August 2006 and held it in my pending tray with a note stating that I was awaiting a date for the hearing of the motion for the first orders; or (iii) I may have seen it for the first time on 21 August 2006."

He is unable to say whether one is more likely than the others. He is unable to cast light on the date of the motion, since it was not something that he required to check.

The Lord Ordinary's conclusion

[16] The Lord Ordinary, at paragraph 62 of her Opinion, takes as her starting point what she describes as "two undisputed facts", namely that the court date-stamp on the petition is 21 August 2006, and that the court's computerised Petition Register shows the first entry in relation to the petition on 21 August 2006. She expresses the opinion that these facts raise the presumption omnia rite acta praesumuntur, and that accordingly - in the absence of persuasive evidence to the contrary - the staff in the Petition Department formally accepted and processed the petition on that date. The Lord Ordinary went on to consider the three possibilities postulated by Mr McLeod. At paragraph 65 she rejected the first of these. She did so because it was inconsistent with the evidence of Mrs Dickson and Mr Simpson, which she accepted. At paragraph 66, she rejected the third possibility for similar reasons. At paragraph 67, she expressed the following view:

"The remaining possible explanation (the second explanation) appears to me to be the only one which is consistent with the sequence of events outlined in the affidavits and productions."

After further discussion of the evidence, the Lord Ordinary concluded (at paragraph 70):

"It seems to me, on a balance of probabilities, that it was only after [the appropriate hearing] date (24 August 2006) had been arranged that Mr McLeod took the necessary administrative steps (at a time convenient to him, as no-one had mentioned any particular urgency) whereby the petition was 'lodged' in the Court of Session and put into the Court of Session machinery with all the automatic consequences such as the date-stamp, the debit of fee fund dues, the registration of the petition in the Petition Register, the enrolling of the motion for a hearing for a first order, and the placing of the petition before a Lord Ordinary. It appears from the date stamp and the computerised Petition Register that Mr McLeod so dealt with the petition on 21 August 2006. Thus the petition was in my opinion lodged in the Court of Session on 21 August 2006. All that went before comprised preliminary discussions, negotiations and preparations for the ultimate lodging which occurred on 21 August 2006."

The Lord Ordinary therefore held that the application to set aside the arbiter's award was made out of time, and dismissed the petition.

The petitioners' submissions

[17] For the petitioners, Mr Currie submitted that the application to set aside the arbiters' award was made on 15 August 2006. On that date the petition was presented in the Petition Department by the petitioners' solicitors. The petition, on that date, left the possession of the solicitors and was taken into the possession of the court. It was thus lodged on 15 August. No distinction was to be drawn between presentation and lodging of the petition. The Lord Ordinary had failed to distinguish between the actings of the petitioners and their solicitors, on the one hand, and the procedural consequences of those actings, on the other. Instead of focusing on the actings of the petitioners and their solicitors, as she ought to have done, the Lord Ordinary had focussed on the internal arrangements of the Petition Department.

[18] Examining the affidavits, Mr Currie submitted that the weight of the evidence was that the petition was presented in the Petition Department on 15 August. The motion for a first order was enrolled on the same date. That was borne out by the un-contradicted evidence of Mrs Dickson, supported by the evidence of Mr Simpson. Of Mr McLeod's three possibilities, the first and the third were ruled out if Mrs Dickson's evidence was accepted. The second possibility related to the internal procedure of the Petition Department after the petition left Mrs Dickson's possession. The important point was that the petition passed from the possession of Mrs Dickson to that of the court, without any qualification expressed as to the effect of that occurrence. There was no evidence that Mrs Dickson was told that, although the petition was being taken in by the court, it would be held as if not presented or lodged until some subsequent event occurred. In that situation, what Mr McLeod did with the petition after it was taken in did not bear on the question which the court had to decide. A delay in date-stamping or otherwise processing the petition did not mean that it had not been presented or lodged until those internal procedures were carried out. Mr Currie drew attention to the Lord Ordinary's record of the first respondents' submissions to her, in paragraphs 18 et seq. of her Opinion. She set out counsel's outline of the procedure which took place when a petition was lodged:

"... it had to be registered (... now by computer entry in a computerised Petition Register). That registration was the court's acknowledgement that it had accepted the petition. Three matters were entered: (i) details of the relevant petition or application; (ii) the date of the first hearing (which might involve ascertaining the availability of counsel); and (iii) payment of the fee fund dues ..."

(The reference to the date of the first hearing - which is not fixed until a later stage - perhaps ought to be a reference to the date of the hearing of the motion for a first order, but the point is not of importance. The reference to payment of fee fund dues is irrelevant for present purposes, because the petitioners' solicitors had an account to which such dues could be debited by the court.) In paragraph 19 the Lord Ordinary continued with her summary of the first respondents' counsel's account of the procedure which follows the lodging of a petition:

"Once the court was satisfied that a petition had been lodged with the fee fund dues paid, the ensuing procedure was automatic. The petitioners were not required to serve the petition in order to achieve further procedure: the petition would automatically be placed before a Lord Ordinary in chambers with a motion for a first order for intimation, service and the fixing of a first hearing. By contrast, if a petition were not lodged, nothing would happen."

The Lord Ordinary then recorded various situations in which counsel submitted the petition would not be lodged, but since none of them accorded with the evidence before the court, it is not necessary to consider them in detail. In paragraph 20, the Lord Ordinary recorded the following submission:

"The phrase 'On being lodged' [in Rule 58(7)], followed by the various procedural consequences set out in the rule, meant that a petition was not lodged if the various procedural consequences did not follow."

That, Mr Currie submitted, was erroneous. He accepted that there could be circumstances in which an attempt to present or lodge a petition failed, for example if the petition was rejected for want of a signature. But if a petition were rejected, the person attempting to present or lodge it would be aware of that, and thus aware that it had not been presented or lodged.

[19] Mr Currie made reference to, and commented upon, various authorities discussed before the Lord Ordinary. The earliest of these was Burgh of Millport, Petitioners 1974 SLT (Notes) 23. That was a petition for sequestration presented without the concurrence of the debtor which, in terms of section 13 of the Bankruptcy (Scotland) Act 1913, was competent only within four months of the date of the debtor's notour bankruptcy. The petition was lodged in the petition department on a date prior to the expiry of the four month period, but the first deliverance was not pronounced until a date outwith that period. Lord Keith held that the petition was competent, saying:

"In my opinion the competency of the petition for this purpose is to be judged as at the date of lodging with the petition department. The petitioner has at that stage brought the petition into court, and it is not within his control precisely when it is placed before the Lord Ordinary. It would be unreasonable and inconvenient to hold that a petition which has been lodged in due time is incompetent because circumstances internal to the court prevent it being brought before the Lord Ordinary for a few days".

Mr Currie accepted that that case was distinguishable, but submitted that it was instructive to see the significance which the court attached to the petition leaving the control of the petitioner, and to the unreasonableness of taking into account, in judging whether a time limit had been met, delay after the petition was under the control of the court.

[20] In Secretary of State for Trade and Industry v Josolyne 1990 SLT (Sh Ct) 48, Sheriff Principal Ireland held that the tempus inspiciendum for the purpose of section 7(2) of the Company Directors Disqualification Act 1986, which required that, except with the leave of the court, an application for a disqualification order be made before the end of the period of two years beginning with the day on which the company became insolvent, was the date on which the application was lodged, not the date on which it was served on the respondent. In Secretary of State for Trade and Industry v Normand 1994 SLT 1249, an application to the Court of Session under the same section, Lord Sutherland held that the application was timeous when the petition was presented within the two year period, although the first order was pronounced after the end of that period. His Lordship pointed out that an ordinary action is not commenced until the summons is served, but continued (at 1251D):

"The position, however, is different in petition procedure. Under that procedure the petition is lodged in court and then in terms of Rule of Court 195 [the predecessor of rule 14.5(1) of the current Rules] the case will automatically be put before a Lord Ordinary in order that a first order may be pronounced. From the moment the petition is lodged the rest of the procedure follows automatically. ... What section 7(2) is concerned with is an application to the court and it is the date of that application that is relevant. In my opinion, there can be no doubt whatever that under the ordinary meaning of words [the date of] 'an application to the court' must be the date upon which the petition is lodged in court."

In Secretary of State for Trade and Industry v Campleman 1999 SLT 787, another section 7(2) application, Lord Johnston observed (at 789G):

"... with regard to petitions they are directly under the control of the court from the moment they are presented."

In Ritchie v Dickie 1999 SC 593, a case concerned with section 17 of the Bankruptcy (Scotland) Act 1985, which permits recall of a sequestration where appropriate, provided the application for recall is presented within ten weeks after the date of the award of sequestration, Lord Bonomy held (at 597F) that:

"On the basis ... of authority, commonsense and the ordinary meaning of words ... this petition was 'presented' when it was lodged in the petition department."

[21] Superdrug Stores plc v Network Rail Infrastructure Ltd 2006 SC 365 was concerned with an application under section 1(1) of the Tenancy of Shops (Scotland) Act 1949. That section provides that the tenant of a shop, when he is given notice of termination of tenancy and is unable to obtain renewal of it on satisfactory terms, may apply to the sheriff for renewal of the tenancy. The application must be made "not later than the expiry of twenty one days after service of the notice". It is unnecessary to go into the details of the facts of the case. The court upheld the soundness of the sheriff principal's formulation of the test of the making of an "application" within the meaning of the section as being "the presentation of a procedurally valid summons accompanied by the appropriate fee to the sheriff clerk, together with a request, implicit or explicit, that the summons should be processed", but held that he had erred in holding that presentation of the summons and fee did not carry the necessary implication that the summons was to be processed. The Lord President, while dissenting from the latter aspect of the decision on the basis that on the facts found the sheriff principal was entitled to hold that the test had not been satisfied, nevertheless observed (at paragraph 8):

"I accept that, if a summary cause summons, having been presented, is left in the hands of officials of the court with a view to it being authenticated, whether by the sheriff clerk or by the sheriff, a court could, and probably should, conclude that an application to the sheriff had been made as from the time when it was so left. That might also be so in circumstances where, albeit the summons is removed an unequivocal request is made to fix a hearing before the sheriff. That is because from that point onwards the person seeking to make the application has taken all the steps which he can take to make that application; delay beyond that point is outwith his control."

[22] Finally, Mr Currie referred to Barnes v St Helens Metropolitan Borough Council [2007] 1 WLR 879. While that case turned on consideration of the (English) Limitation Act 1980, section 11(3), and the Civil Procedure Rules, r. 7.2, and concerned whether proceedings were timeously brought when the claim form had been lodged in court one day before expiry of the time limit, but was not issued until after such expiry, Tuckey LJ said (at paragraph 16):

"I approach [the statutory provisions and the rules] by expecting to find the expiry of a limitation period fixed by reference to something which the claimant has to do, rather than something which someone else such as the court has to do. The time at which a claimant 'brings' his claim form to the court with a request that it be issued is something he has to do; the time at which his request is complied with is not because it is done by the court and is something over which he has no real control."

That, Mr Currie submitted, supported his contention that attention should be focussed on what the petitioners and their agents did, rather than on the internal procedures of the court followed through after the petition was in the possession of the Petition Department.

[23] Mr Currie concluded by reiterating that in determining whether a petition had been presented or lodged, attention had to be focussed on the act of the petitioners' solicitors, not on the consequent internal procedure of the court offices. The Lord Ordinary had approached the matter as if the critical events were the date-stamping of the petition and its registration in the petition register. These, however, were not matters within the control of the petitioners or their solicitors. On the contrary, they were events which followed upon the lodging of the petition at an interval which was at the convenience and discretion of the court officials. They were records made for the purpose of acknowledging and recording the occurrence of something that had already happened, namely the presentation or lodging of the petition. Delay in making those records could not delay the fact of presentation or lodging, which occurred when the petition left the control of the petitioners' representative and came under the control of the court. In the present case, the evidence was that the petition left the control of Mrs Dickson on 15 August 2006, and came under the control of Mr McLeod and his staff in the Petition Department on that date. Whatever the reason for the delay in date-stamping the petition and entering it in the petition register may have been, that delay did not postpone the presentation or lodging of the petition. For the purpose of Article 34(3) of the Model Law, therefore, the application to set aside the arbiters' award was timeously made. The reclaiming motion should therefore be allowed.