## Facts

- Halki Shipping Corp. owned the tanker *Halki* and entered a tanker voyage charterparty with Sopex Oils Ltd for the carriage of palm and coconut oil.
- The charterparty contained a London arbitration clause requiring that disputes arising from or in connection with the charterparty be referred to arbitration in London under English law.
- Halki claimed Sopex failed to load and discharge the vessel within the contract laytime and sought demurrage (liquidated damages for delay).
- Sopex did not admit liability and raised specific defenses to at least part of the demurrage claim.
- Halki commenced High Court proceedings for demurrage and applied for summary judgment (Order 14), arguing Sopex had no arguable defense on the claim (or on a substantial part of it).
- Sopex applied for a stay under Arbitration Act 1996 § 9 on the basis that the demurrage claim was a matter that the parties had agreed to refer to arbitration.
- Halki opposed a stay, contending that an “indisputable” claim (or an indisputable part of a claim) was not a “dispute” within the arbitration clause and that arbitrators lacked jurisdiction to make an award on an indisputable part.

## Issues

1. Whether a demurrage claim that is not admitted is a “dispute” within a broad London arbitration clause and within Arbitration Act 1996 § 9, even if the claimant says the defense is hopeless.
2. Whether the court may grant summary judgment on the merits (Order 14) instead of granting a mandatory stay under § 9 for a claim within the arbitration agreement.
3. Whether an allegedly “indisputable” part of a claim falls outside the tribunal’s jurisdiction so that court proceedings may continue for that part.

## Decision

- The court granted Sopex a stay of the court proceedings under Arbitration Act 1996 § 9 and refused Halki’s application for summary judgment.
- A “dispute” existed because Halki’s claim for demurrage had not been admitted; the court was not required (and was not entitled) to decide whether Sopex had an arguable defense before deciding the stay application.
- Because the demurrage claim fell within the scope of the arbitration clause and the arbitration agreement was not shown to be null and void, inoperative, or incapable of being performed, § 9(4) required the court to stay the action.
- The court rejected the argument that “indisputable” claims (or indisputable portions of claims) are carved out from arbitration; if the matter is within the arbitration agreement and is not admitted, it is for the arbitral tribunal to determine liability and grant relief.

## Legal Principles

- Under a broad arbitration clause, a “dispute” exists where a claim is made and the responding party does not admit it; the strength of any defense does not determine whether there is a dispute for § 9 purposes.
- Arbitration Act 1996 § 9(4) requires a stay of court proceedings brought in respect of a matter to be referred to arbitration unless the arbitration agreement is null and void, inoperative, or incapable of being performed.
- The court’s summary judgment procedure cannot be used to decide the merits of a claim that the parties agreed to refer to arbitration where the claim is not admitted.
- An arbitral tribunal has jurisdiction to determine and award on claims within the arbitration agreement even where the claimant says liability (or part of it) is plain.

## Conclusion

Where a charterparty contains a London arbitration clause and the defendant does not admit a demurrage claim, the matter is a “dispute” for Arbitration Act 1996 § 9, and the High Court must stay the court action in favor of arbitration rather than grant summary judgment on the merits.


Halki Shipping Corp. v. Sopex Oils Ltd, [1998] 1 Lloyd's Rep. 49 (1998)