CO129-497 - Public Offices - 1926 — Page 352

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tion. The facts of the present case are a fortiori to those in the case of the Bank Line, and no Court of law could have held upon them that the charter had not been frustrated at latest when, in the latter part of 1917, it had become plain that the first expecta- tions of a speedy release of the ship were unfounded.

The arbitrator thought otherwise. His award is not clearly expressed, no doubt owing to the fact that only one party appeared before him, but their Lordships do not think that any objection can be reasonably taken to its form. It means that the charter-party had not been frustrated at all. So regarded, it was wrong in law and fact.

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As the arbitrator was the judge, if at all, both of law and fact, the sole question is whether he had any jurisdiction to decide, as he purported to do, between the parties. This depends on the question whether or not there was any submission, and that again on the question whether, at the time when it purported to be submitted to him, there was a dispute, subsisting between the parties, under this contract," that is, a contract then subsisting. That a person before whom a complaint is brought cannot invest himself with arbitral jurisdiction to decide it is plain. His authority depends on the existence of some submission to him by the parties of the subject-matter of the complaint. For this purpose a contract that has determined is in the same position as one that has never been concluded at all. It founds no jurisdiction.

Lord Parker of Waddington sums up this subject in The Pro- duce Brokers' case (1916, 1 A.C. at p. 327) in the following words :-- The arbitrator cannot make his award binding by holding, contrary to the true facts, that the question, which he affects to determine, is within the submission... Where the submission is contained in the contract, it may be a question of construction, whether such expressions as 'all disputes arising under this con- tract' include questions as to the ambit of the submission itself. Prima facie. I do not think they would." "A Court," says Lord Loreburn in the same case (p. 322), "will decide for itself whether an inferior Court has clothed itself with jurisdiction by an erroneous finding on something vital to the jurisdiction" (see, too, A.G. for Manitoba v. Kelly (1922, 1 A.C. at p. 276). Accordingly, if it be the law that when a contract is frustrated it is brought forthwith to an end as regards matters thereafter arising, and if it was the fact that the contract had so come to an end before 1919, when for the first time an offer of the ship for service was effectively made, then the arbitrator could not clothe himself with jurisdiction by finding that there had been no frustration at all.

With regard to the reasoning of the majority in the Court below, their Lordships must observe, with very great respect, that they hardly appreciated the difference, which is made by holding that the entire charter had come to an end. An arbitrator under an ordinary arbitration clause may have jurisdiction to construe the

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contract, which contains the submission, and to find for or against trade customs said to be incorporated with it (Produce Brokers' case; 1916, 1 A.C1, 314), or to adjudicate upon breaches of a contract, purpose partly or wholly performed, but still in existence, for the

of awarding damages for such breaches already committed, even though it is determined as regards future performance by repudia- tion on one side and acceptance on the other (Sanderson v. Armour, 1922, S.C. (H.L) 117; Champsey & Co. v. Jiray & Co., 1923, A.C. 480). This proposition is quite different from saying that a dispute. which might have arisen under the contract containing the submission, if it had not come to an end without fault on either side, is a dispute submitted thereunder, when the contract itself no longer exists (May v. Mills, 20 T.L.R. 287), though alluded to, was disposed of by assuming that it only excluded from the submission matters collateral to the main issue. Their Lordships venture to think that the question whether there

is jurisdiction is not collateral; it is essential and fundamental, though, if the point is once got over, the merits may bulk so large as to make it seem a minor matter.

The respondents raised before their Lordships two somewhat refined arguments, to which their Lordships trust no real injustice is done by the following summary. The doctrine of frustration In rests upon a term or a condition implied in the contract, contemplation of law the parties, if they had anticipated and had taken into consideration the events which ultimately frustrated the object of their adventure, would have made provision for it, and, again in contemplation of law, the legal operation of those events upon the contract is the very thing for which that term would have provided. Hence, in implying that term to give a foun- ation for a legal conclusion, the law is only doing what the parties really (though subconsciously) meant to do themselves. Accordingly, the respondents asked why must one mode of dealing with an unanticipated event be adopted rather than another? At any rate, why should not an arbitrator, in passing upon the questions raised by the implication, adopt a conclusion not in all respects identical with the decision in the Bank Line v. Capel? If, for example, he thought that the parties would have said (had they thought of it) that the contract should continue after the happening of the event, at least so far as to submit to his arbitration the question whether or not there had really been any frustration at all, would he not have been competent to do so? Or, putting it in another way, if the term which he thought fit to imply had been that in the event of frustration the contract as a whole should not be void, but that the parties should merely be relieved from further per- formance of acts, which under the charter they severally under- take to do, if so, must the Court not intend that his award was based on this kind of view and accordingly support it ut res magis valent

quam pereat? (B 40-4386-3)T

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