Extension of Fiona Trust to settlement agreement: The Four Island  EWHC 3820 (Comm)
The Four Island was a s.67 jurisdiction challenge (the arbitrators having held they had jurisdiction) which raised issued both as to (1) the scope of the arbitration clause and (2) the scope of the tribunal’s appointment.
The parties entered into a voyage charterparty on an amended ASBATANKVOY form which included an arbitration clause for disputes to be determined in London. The clause materially provided that “Any and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in … the City of London …”.
Disputes arose and the owner stated it had a claim for demurrage and a claim for heating costs. Following an exchange of emails between the owner and the charterer’s brokers the claims were settled for USD 600k. The emails provided for a date of payment, which was subsequently extended by agreement. The parties did not draw up a separate settlement document and the email exchange did not refer to any jurisdiction clause. The settlement sum remained unpaid.
The arbitration notice materially provided:
“We act for the Owners in respect of their disputes against charterers under the above referenced charterparty. Owners have a number of claims against charterers, including a demurrage claim, a claim for heating costs … plus various other matters … In accordance with the terms of the charterparty… we have appointed … as owners’ arbitrator in respect of any and all disputes under the charterparty …”
The charterer failed to appoint an arbitrator, so a further two arbitrators were appointed in accordance with the arbitration clause. The charterer challenged jurisdiction before the tribunal and the tribunal held that they did have jurisdiction. The charterers brought a s.67 jurisdiction challenge before the Court arguing (1) the settlement agreement was a separate contract which did not contain an arbitration clause and (2) in any event the tribunal had been appointed to hear disputes under the charterparty and not under the settlement agreement.