## Facts

- A Dutch shipowning company chartered a vessel to a Soviet entity under a charterparty dated August 11, 1939.
- The contract required disputes to be arbitrated in London.
- A dispute arose in April 1940 and London arbitration commenced with party-appointed arbitrators.
- Germany occupied the Netherlands in May 1940; the Dutch company’s principal place of business and commercial domicile remained in Rotterdam.
- The Soviet charterer and its appointed arbitrator refused to proceed, asserting the Dutch company had acquired “enemy character” due to residence in enemy-occupied territory and was disabled from suing or continuing proceedings in England.
- The Dutch company applied in the King’s Bench Division for appointment of an umpire to move the arbitration forward.
- The Soviet charterer objected that (i) the Dutch company was an enemy for procedural purposes, (ii) the occupation terminated the authority of the Dutch company’s English solicitors, and (iii) the court therefore could not appoint an umpire.
- A letter from the Custodian of Enemy Property stated there would be no objection under trading-with-the-enemy legislation to proceeding with the arbitration.

## Issues

1. Whether a corporation commercially domiciled in enemy-occupied territory is treated as having “enemy character” that bars it, during wartime, from initiating or advancing proceedings in English courts (including applications ancillary to arbitration).
2. Whether the occupation terminated or suspended the authority of the company’s English solicitors to bring the summons seeking appointment of an umpire.
3. Whether trading-with-the-enemy legislation (and any executive assurance under it) permitted the arbitration and the court’s assistance to proceed despite any enemy-character disability.

## Decision

- The House of Lords allowed the appeal and reversed the Court of Appeal.
- The order appointing an umpire was discharged and the matter was remitted to the King’s Bench Division for further action consistent with the judgment.
- The House treated the Dutch company, domiciled in occupied Rotterdam, as possessing enemy character for wartime procedural purposes.
- Because an enemy-character plaintiff could not invoke English court process to advance its claim, the court should not have appointed an umpire on the company’s application.
- The solicitors’ attempt to move the court was ineffective insofar as it depended on the company’s capacity to initiate or pursue the step during hostilities.
- Costs were awarded to the Soviet charterer.

## Legal Principles

- For wartime procedural disability, corporate “enemy character” turns primarily on residence or commercial domicile (and exposure to enemy control), not merely formal nationality.
- A person or entity with enemy character is generally permitted to defend proceedings but is disabled, absent clear legal authorization, from initiating or advancing proceedings as a plaintiff in English courts during war.
- Court assistance to a London-seated arbitration (including appointment of an umpire) is part of the legal process and is subject to the same wartime limits on enemy-character plaintiffs.
- Trading-with-the-enemy statutes and regulations operate alongside common-law enemy-character rules; executive assurances cannot, without clear statutory basis, confer ordinary plaintiff capacity on an enemy-character litigant.
- Where a party lacks capacity to invoke court process due to enemy character, steps purportedly taken by its agents to commence or advance that process cannot sustain the requested judicial relief.

## Conclusion

The House of Lords held that a corporation domiciled in enemy-occupied territory was to be treated as having enemy character and therefore could not, during wartime, obtain English court assistance to advance a London arbitration, leading to reversal of an order appointing an arbitration umpire.


N.V. Gebr. Van Uden's Scheepvaart en Agentuur Maatschappij v. V/O Sovfracht, [1943] A.C. 203 (H.L. 1943)