QCR Summer 2020: Ocean Prefect Shipping Ltd v Dampskibsselskabet Norden AS

Is a report by the Marine Accident Investigation Branch (MAIB) admissible in an unsafe port claim in a London LMAA arbitration? 

On 10 and 11 June 2017 the British-registered vessel, Ocean Prefect, ran aground twice in the course of entering the port of Umm Al Quwain in the UAE. The owners brought an unsafe port claim against the charterers in a London LMAA arbitration. The Marine Accident Investigation Branch (MAIB), an independent inspectorate within the Department of Transport, investigated the circumstances of the grounding to see what lessons could be learnt from it with regards to improving the safety of shipping. 

Both parties’ experts had referred to the MAIB report in their expert reports, and owners wished to refer to the report in the arbitration. The charterers and the MAIB objected, arguing that under regulation 14(14) of the Merchant Shipping (Accident Reporting and Investigation) Regulations 2012 (SI 2012 No 1743), the MAIB report could only be admitted into the arbitration with the permission of the court. 

The owners therefore applied to the English High Court for permission to rely on the report in the arbitration but submitted that the omission of the word ‘tribunal’ from Regulation 14(14) meant that arbitration proceedings were not subject to Regulation 14(14) and thus the Court’s permission was not required. 

Regulation 14(14) provides as follows: 

“If any part of any document or analysis it contains to which this paragraph applies is based on information obtained in accordance with an inspector’s powers under sections 259 and 267(8) of the Act, that part is inadmissible in any judicial proceedings whose purpose or one of whose purposes is to attribute or apportion liability or blame unless a Court, having regard to the factors mentioned in regulation 13(5) (b) or (c), determines otherwise.”

Judgment

The court concluded that arbitration proceedings were judicial proceedings within Regulation 14(14) and that their purpose was to attribute blame or liability. The arbitral tribunal had a duty to conduct the arbitral proceedings fairly and impartially as between the parties, giving each party a reasonable opportunity of putting its case and dealing with that of its opponent. That duty was characteristic of the judicial function. As such the Court’s permission was required for admission of the report.  

The Regulations set out the factors that the court must consider in making its decision on the admission of the report. The court must consider, having had regard to the views of the chief inspector, whether the interests in justice outweigh any likely prejudice that will occur to: 

  • the current investigation into the accident;
  • any future safety investigation conducted by the MAIB; or
  • relations between the UK and another state or organisation.

The court decided that while the arbitration proceedings were private, a decision to permit use of the report would be in the public domain and this could prejudice future MAIB accident investigations. This is because witnesses knowing that their conversations with the MAIB would not be confidential might going forward be less willing to provide information to the MAIB in a maritime casualty when asked to do so.

The court recognised that refusing to admit the report may cause the owners prejudice in the arbitration, but held that the interests of justice in this case did not outweigh the likely prejudice to future accident investigations and the UK’s relations with another state or international body. The interests of safety at sea outweighed the parties’ commercial interests. In any case, it would still be possible for owners to cross-examine witnesses without reference to the report; and both parties would be assisted by their own experts. There was also no restriction on the witnesses explaining, under cross-examination, what evidence they had given to the MAIB and, if they were willing to do so, provide copies of the statements that they had made to the MAIB.  

The court therefore ordered that the MAIB report should not be used in the unsafe port arbitration proceedings.

Comments

This was the first time the English High Court had been asked to adjudicate on the inadmissibility of a MAIB report in a private and confidential arbitration, but the Court’s decision was unsurprising. The relationship between the MAIB and the witnesses to casualties questioned by its inspectors is dependent on a high degree of trust and if this trust were to be eroded, this would impact on the ability of the MAIB to fulfill its function properly. The judge therefore rightly prioritised the purpose of MAIB reports in promoting safety of life at sea. 

It is interesting however to note that in a previous decision before the Admiralty Registrar in Keynvor Morlift Ltd v The Vessel “Kuzma Minin” [2019] EWHC 3557 (Admlty), the court exercised its  discretion to allow admission of a MAIB report. However, in that case, the report was admitted as part of a wider fact-finding exercise, and not for the purpose of attributing or apportioning blame or liability.