Largest arbitration in history ends first stage
25 March 2002
6 May 2003
26 July 2004
21 May 2001
4 December 2006
27 November 2006
An arbitration described as history's largest has completed its first stage, with legal costs of tens of millions of pounds and the resignation of one arbitrator and the death of another.
The first stage - a dispute over delay and quality of work relating to the conversion of a 125-ton bulk carrier into a pipelaying vessel - began in 1996 and has finally concluded after a mammoth nine awards, the arbitration equivalent of court judgments.
There have been four major hearings involving scores of lawyers and experts, five minor hearings and four appeals to the Commercial Court. And this is just the first stage; outstanding matters include a damages claim of £450m and the respondent's counterclaim. The damages issue is due for a six-month hearing next September. The matter is expected to conclude at the earliest in 2005, almost a decade after it began.
The arbitration, known as Solitaire, the vessel's name, and which surprisingly has received little publicity, has been likened to those of the Channel Tunnel, BCCI and Maxwell, as they all faced issues of disclosure and discovery. Two million documents, all made available electronically, and 24,000 drawings, have been referred to.
Denton Wilde Sapte acted for the successful claimants, Dutch offshore contractor Allseas, under the leadership of partners John Miles and Marie Kidwell. Both joined Mayer Brown Rowe & Maw on 3 December, soon after the hearing that produced the ninth award. Dentons continues the claimant's case, led by litigation partner Phil Chong.
Each award comprised sections of the substantive matter relating to liability. Norton Rose acted for respondent Sembawang Shipyard in Singapore, contracted by Allseas to do the conversion. Litigation partner Peter Martyr headed the team.
Some reports said that lawyers from both sides suffered from "metal fatigue", one from the claimant's side retiring from the case. Others were stupefied by "psychological boredom".
The chain of events can only be touched upon here.
The main matter was preceded by a small dispute in November 1994 over costs and the time involved in changing the contract agreement. In October 1995, Allseas terminated the contract as the work was delayed and of low quality, thus triggering the arbitration, which started in September 1996 under London maritime arbitration rules. The first hearing was in January 1997 and the first award in February 1997. A month earlier, a first instance judgment in a Singapore court ruled that Allseas should pay £110m in security to Sembawang, linked to alleged shortfalls of payment for work. On appeal this was reduced to £50m.
The arbitration was disrupted in June 1998 by the resignation of the first chairman of the arbitration Donald Davis. Replaced by the former deputy High Court and circuit judge Anthony Diamond QC, the arbitration was again put in turmoil by the death of arbitrator Michael Ferryman, who died midway through a six-month hearing, but parties decided to continue rather than call a rehearing.
For the respondents were David Hunt QC of Blackstone Chambers, Nigel Tozzi and Alexander Gunning of 4 Pump Court and Luke Parsons of 4 Essex Court.
For the claimants were Roderick Cordara QC and John Snider of Essex Court, Michael Swainston of Brick Court and Stephen Hofmeyr QC of 7 King's Bench Walk.
Atkin Chambers was brou-ght in when Andrew White QC replaced Cordara and Andrew Goddard replaced Swainston. Robert Clay was brought in for his expertise on defects in September 2000.