The Hannah Blumenthal [1983] 1 AC 854
Arbitration agreement not frustrated by delay caused by the parties
Facts
A contract was made for the sale of a ship. A dispute arose between the parties regarding alleged defects. The dispute was referred to arbitration but the requirement for a third arbitrator under the contract was not fulfilled and the arbitration was delayed. The sellers raised proceedings for a declaration that the arbitration agreement was discharged by repudiation, consensual rescission or frustration.
Issues
At first instance, it was held that there had been no agreement to abandon the arbitration but it had been discharged by frustration. The Court of Appeal agreed that the agreement had been frustrated because, due to the long period of time that had passed, it would be impossible for there to be a fair trial of the buyer’s claim. The buyer further appealed to the House of Lords.
Decision/Outcome
The House of Lords allowed the appeal. The arbitration agreement was not frustrated. Both parties were in default of the agreement by not applying to the arbitral tribunal for direction to prevent delay. Such a default excluded the operation of the doctrine of frustration. Lord Diplock held that the virtual impossibility of a satisfactory trial following the delay was incapable of being classified as a frustrating event; even If it had come about without the default by either party. Furthermore, the sellers had not proven abandonment of the arbitration as they had not shown that they believed that the buyers had intended to abandon the action and there were actions by them which were inconsistent with such a belief.
Updated 19 March 2026
This case summary accurately describes the House of Lords decision in The Hannah Blumenthal [1983] 1 AC 854. The legal principles remain good law. The case continues to be cited in English arbitration law for the propositions that delay caused by both parties cannot frustrate an arbitration agreement, and that a party alleging abandonment must establish both that it believed the other party intended to abandon the proceedings and that its own conduct was consistent with that belief. There have been no statutory changes or subsequent House of Lords or Supreme Court decisions that overrule or materially qualify these principles. Students should note that the arbitration law landscape has developed significantly since 1983, most importantly through the Arbitration Act 1996, which introduced statutory mechanisms to address delay and inactivity in arbitration proceedings (see in particular sections 41 and 42). These provisions give tribunals and courts powers to deal with undue delay, reducing the practical need to rely on the common law doctrines of frustration or abandonment discussed in this case. The case nonetheless remains authoritative on those common law principles.
