The High Court has dismissed eight licensed Shannon Estuary pilots’ application for an order requiring Shannon Foynes Port Company to refer a dispute over pilotage charges to arbitration. The court decided that the statutory referral process did not apply because the Company had not agreed to vary or replace the existing pilotage agreement. It made no finding on the merits of the pilots’ underlying dispute about the charges.
The pilots argued that the charges introduced from 1 January 2014 restructured the historic differences between rates for ports in the estuary and would cause them significant income losses. They said such a change required agreement with them and asked for a referral under section 59(3)(b) of the Harbours Act 1996. Their proposed term would have limited a pilot’s income reduction to 7.5%. The Company denied that rates had previously been agreed annually and said it had statutory authority under section 64 to set them.
The Company announced the lower charges in July 2013 after consulting the pilots. It said the changes were intended to bring Shannon’s rates into line with other major ports and encourage more commercial activity. The new charges took effect, and the pilots obtained leave to seek judicial review in January 2014.
Justice Murphy held that section 59’s arbitration mechanism concerns disagreement over terms in an agreement that the parties have agreed to vary or replace. The existing agreement, made in 2002, could not be changed unilaterally by either side. Because the Company had not agreed to a variation or replacement, the pilots could not use that mechanism to compel arbitration.
The court also held that section 64 gives the Company power to determine pilotage rates, which may rise or fall. That power is subject to the existing agreement’s requirement that charges be based on gross tonnage, and to ministerial oversight of general policy on charge levels under section 80(2). The judge added that even if the pilots’ interpretation of section 59 were correct, an arbitrator could not lawfully insert their proposed guaranteed minimum remuneration term, because it would intrude on the Company’s statutory rate-setting power.
The application for mandamus was dismissed. The court stressed that it was expressing no view on the substantive dispute; it said any differences between the parties fell to be addressed through civil law remedies in contract or equity.