The case of Tryggingarfelagio Foroyar P/F v CPT Empresas Maritimas S.A. [2011] EWHC 589 (Admlty) concerned whether the agreement between the claimant’s insured and the defendant was subject to a set of standard terms which incorporated an English arbitration clause.
Tryggingarfelagio Foroyar P/F (TF) was the insurer of the Athena, a large factory trawler owned by Thor Fisheries. Fire broke out on board the Athena on 4 July 2007 off the coast of Chile. Thor hired the defendant, CPT, to fight the fire and tow the Athena. The fire was ultimately extinguished on 18 July 2007 by which time the trawler had suffered extensive damage. TF settled the insurance claim made by Thor in respect of the Athena and then commenced proceedings against CPT in Chile arguing that CPT’s negligence had led to the fire continuing for so long. CPT contended that its services rendered to the insured were under the terms of a standard form (the BIMCO wreck hire form) which contained an English law and arbitration clause. TF applied to the High Court under section 72(1) of the Arbitration Act 1996 arguing that there was not a valid arbitration agreement and requesting that it be permitted to continue the proceedings it had instituted in Chile.
Mr Justice Steel considered the case law and the evidence put before him and found that it was usual in the salvage industry for standard terms to be used and that in previous bids for work, CPT and others had put forward the same standard industry terms. As a result, Mr Justice Steel found that the standard terms in question applied and there was a binding arbitration agreement between the parties which must be followed.
