Maschinenfabrik v South Indian Shipping Corporation Ltd. [1981] A.C. 909
Citation:Maschinenfabrik v South Indian Shipping Corporation Ltd. [1981] A.C. 909
Rule of thumb:If there is an arbitration clause can you by bypass this and just go straight to Court? No, these clauses are strictly enforced. Alternative dispute resolution is a recognised part of legal procedure. This was most famous for affirming that every citizen has a right to their day in Court, if they can provide a part of the common law or statute/Regulations which they believe has been breached, otherwise their right to a remedy has been violated, however, this case did affirm that alternative dispute resolution was an important part of the justice process as well, as it ensures that Court procedure is not overly slow and assists the Court with the groundwork needed to make good decisions.
Background facts:
The facts of this case were that there was an arbitration clause in this dispute. There was a very long delay and the plaintiff raised the action in Court.
Parties argued:
The plaintiff argued that they felt that they were being prejudiced by the delay, and so they just sought to bypass the arbitration and go straight to Court raising the matter. The other side argued that the contract clearly stated that the arbitration process had to be completed before Court proceedings were allowed to be raised and they sought an order forcing the other party to finish arbitration.
Judgment:
The Court held that the plaintiff was not allowed to do this in these circumstances as they had to make their position known to the arbitrator and give the arbitrator the chance to fast-track the case, and so the case was referred back to the arbitrator so that the process there could be completed before it was raised in the High Court.
Ratio-decidendi:
‘…this analogy in my view calls for a closer legal analysis . . (1) of the respective sources of the jurisdiction of the High Court (a) to dismiss for want of prosecution an action that is pending before it and (b) to prohibit further proceedings in an arbitration pending before a duly qualified arbitrator; and (2) of the differences between action at law and arbitration as ways of resolving disputes between private parties as to their contractual rights. The High Court’s power to dismiss a pending action for want of prosecution is but an instance of a general power to control its own procedure so as to prevent its being used to achieve injustice. Such a power is inherent in its constitutional function as a court of justice. Every civilised system of government requires that the state should make available to all its citizens a means for the just and peaceful settlement of disputes between them as to their respective legal rights. The means provided are courts of justice to which every citizen has a constitutional right of access in the role of plaintiff to obtain the remedy to which he claims to be entitled in consequence of an alleged breach of his legal or equitable rights by some other citizen, the defendant. Whether or not to avail himself of this right of access to the court lies exclusively within the plaintiff’s choice; if he chooses to do so, the defendant has no option in the matter; his subjection to the jurisdiction of the court is compulsory. So, it would stultify the constitutional role of the High Court as a court of justice if it were not armed with power to prevent its process being misused in such a way as to diminish its capability of arriving at a just decision of the dispute. The power to dismiss a pending action for want of prosecution in cases where to allow the action to continue would involve a substantial risk that justice could not be done is thus properly described as an ‘inherent power’ the exercise of which is within the ‘inherent jurisdiction’ of the High Court. It would I think be conducive to legal clarity if the use of these two expressions were confined to the doing by the court of acts which it needs must have power to do in order to maintain its character as a court of justice’, Lord Diplock at 977
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.