Alfred C Toepfer International GmbH v Molino Boschi SRL [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Mance J. |
| Judgment Date | 17 January 1996 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 17 January 1996 |
Mance J.
Queen's Bench Division (Commercial Court)
Jurisdiction — Arbitration — Arbitration clause — Dispute concerning contract for sale of goods — Defendant issued proceedings in Italian court — Plaintiff sought reference to arbitration in London pursuant to arbitration clause in sale contract — Plaintiff issued originating summons in England for declaratory and injunctive relief against foreign proceedings — Whether summons subject to Brussels Convention — Whether court had jurisdiction to hear summons — Whether injunctions and declaration should be granted — Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), art. 17, 21, 22.
This was a defendant's application under RSC, O. 12, r. 8 disputing the court's jurisdiction to hear a plaintiffs summons and the plaintiffs summons for declaratory and injunctive relief against foreign proceedings commenced by the defendant.
In 1988 the defendant issued proceedings in Italy arising out of the delivery of Chinese soya meal by the plaintiff to the defendant under a contract of sale on terms incorporating GAFTA form 100. The plaintiff claimed in its defence that the GAFTA form 100 provided for arbitration in London of any disputes. In 1995 the plaintiff issued an originating summons in England for both a declaration that it was entitled to arbitration of the matter in London and for injunctions to restrain the Italian proceedings. Leave to serve the proceedings out of the jurisdiction was granted under RSC, O.11, r. 1(1).
The defendants issued a summons under RSC, O.12, r. 8 claiming that the English court should decline or stay jurisdiction of the plaintiffs originating summons under art. 21 or 22 of the Brussels Convention, or if the Convention did not apply, leave to serve proceedings out of the jurisdiction ought not to have been granted under RSC, O.11, r. 1(1).
Held, dismissing the defendant's summons and the plaintiffs originating summons:
1. The English court had jurisdiction both under the exclusive jurisdiction clause in the GAFTA 100 form and art. 17 of the Brussels Convention. Since art. 17 took precedence over art. 21 and 22, neither art. 21 or 22 applied. That position was not altered by the fact that the plaintiff had in its defence made submissions in Italy on the merits of the dispute, because the plaintiff had made it clear that it contested the jurisdiction from the outset.
2. The plaintiffs originating summons had been made late in the proceedings and delay was an extremely relevant factor in the exercise of discretion. The Italian proceedings had proceeded for seven years. Since the plaintiff ought to have investigated and taken steps in England to rectify the position long before 1995, it was not appropriate to grant either injunctive or declaratory relief. Therefore the plaintiffs summons was dismissed.
The following cases were referred to in the judgment:
Aggeliki Charts Compania Maritima SA v Pagnan SpA (“The Angelic Grace”)UNK [1995] 1 Ll Rep 87.
Chapman v MichaelsonELR [1909] 1 Ch 238.
Continental Bank NA v Aeakos Compania Naviera SAWLR [1994] 1 WLR 588.
Elefanten Schuh GmbH v JacqmainECAS (Case 150/80) [1981] ECR 1671.
Lindsay Petroleum Co v HurdELR (1874) LR 5 PC 221.
Mayer Newman & Co Ltd v Al Ferro Commodities Corp SA (“The John C Helmsing”)UNK [1990] 2 Ll Rep 290.
Partenreederei m/s Heidberg v Grosvenor Grain & Feed Co Ltd (“The Heidberg”)UNK [1994] 2 Ll Rep 287.
Rich (Marc) & Co AG v Societa ltaliana Impianti PA (“The Atlantic Emperor”)UNK [1992] 1 Ll Rep 342.
Rich (Marc) & Co AG v Societa Italiana Impianti PA (“The Atlantic Emperor”) (No. 2)UNK [1992] 1 Ll Rep 624.
SL Sethia Liners Ltd v Naviagro Maritime Corp (“The Kostas Melas”)UNK [1981] 1 Ll Rep 18.
SL Sethia Liners Ltd v State Trading Corp of India LtdWLR [1985] 1 WLR 1398.
Sohio Supply Co v Gatoil (USA) IncUNK [1989] 1 Ll Rep 588.
Tatry v Maciej RatajECAS (Case C-406/92) [1995] CLC 275; [1994] ECR I-5439.
Duncan Mathews (instructed by Middleton Potts) for the plaintiff.
Stephen Males (instructed by Holman Fenwick & Willan) for the defendant.
Mance J: The Brussels and Lugano Conventions on civil jurisdiction and judgments implemented in this country by the Civil Jurisdiction and Judgments Act 1982 as amended, and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards to which the Arbitration Acts 1950–79 give effect contemplate the early assignment of cases to a proper forum and tribunal for their substantive resolution. In practice, the resolution of issues relating to forum and tribunal has often proved complex, costly and not without at least some delay. In this country such issues are determinedly decided at the outset of proceedings. In some countries, Italy being one, this is, not automatically so; On any view, it is desirable that parties should define their positions on jurisdiction and arbitration at as early a stage as possible. They should not be encouraged to see how they fare in one forum before seeking to invoke or force resort to another. There was a fair measure of agreement between the parties that this represents the modern view in these courts. But the plaintiffs before me (“Toepfer”) submit that in relation to applications to enjoin foreign proceedings it is only recently that the English courts have expected a defendant in foreign proceedings to act promptly if he wished to take any steps in England to enjoin the foreign proceedings. Previously, they say, the English courts would in the interests of comity have expected a foreign defendant first to exhaust any remedies which he might have in the foreign jurisdiction.
In the present case the defendants before me, Molino Boschi, have since 14 October 1988 been pursuing proceedings in Ravenna, Italy arising out of the delivery to Venice in February 1988 of some 11,120 tonnes of Chinese soya meal under a contract for sale C.I.F. Ravenna and/or Venice by Toepfer to Molino Boschi made on terms incorporating GAFTA form 100 in January 1988. Molino Boschi have two claims, a small claim for short delivery worth $41,287 and a larger claim for an allowance which they say was agreed to reflect excessive urease activity of the cargo as shown by certificates of Salamon & Seaber. This latter claim is in the sum of $407,467.71. In each case substantial interest is probably to be added. In the Italian proceedings, Toepfer have made three responses:
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(1) that the Italian courts lack jurisdiction to hear the case under the Brussels Convention since the place of contractual performance for the purposes of art. 5 was outside Italy;
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(2) that GAFTA form 100 provides for arbitration of any dispute arising out of or under the contract in London in accordance with GAFTA form 125; and
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(3) as a subordinate submission, which in Toepfer's submission is made unnecessary by points (1) and (2), that Molino Boschi's claims should be rejected on the merits.
In submissions dated 15 December 1989 and 5 October 1990 Toepfer specifically sought from the examining judge, Dr Cognani, an early determination of points (1) and (2) by the College of Three Judges. The examining judge evidently acceded to the request, and 10 November 1992 was fixed for the hearing before the college. This date was on 1 September 1992 postponed to 12 April 1994 when Dr Cognani was transferred to other duties and replaced by Dr Coco. In the meantime Molino Boschi must have had at least some doubt about their prospects on points (1) and (2) in Italy, and sought extensions of time for arbitration in London first from GAFTA under their rules and then from me, sitting in November 1992 as a deputy judge in the Commercial Court, under the Arbitration Act 1950, s. 27. In each case Molino Boschi were unsuccessful, and the Court of Appeal refused leave to appeal against my refusal of an extension. I refused the extension sought although in the course of my judgment I concluded that the small shortage claim was unanswerable and that the larger urease claim was “extremely strong”.
Shortly before the date for hearing before the college, both parties exchanged long and detailed submissions and replies on all three points. In vigorous submissions dated 25 March 1994 Toepfer not only pointed to Molino Boschi's unsuccessful attempt to arbitrate in London as a sign of lack of faith in its case in Italy, but also asked rhetorically (and somewhat inconsistently with their own previous stance) why there was so much exertion on points (1) and (2) without even a nod in the direction of the substantive merits. Toepfer went on to suggest that Molino Boschi had failed to bring any proof of their claims. Molino Boschi submitted also at length on 1 April 1994 that they had never intended to agree to arbitrate and that their signature of a broker's form of contract confirmation after the event did not amount to a relevant written agreement to arbitrate under Italian law. On the merits, they said that Toepfer had never contested the documents on which their two claims were based. In a reply dated 8 April 1994 Toepfer compared Molino Boschi's attitude before the Italian and English courts.
The College of Three, Drs Coco, Agnoi and Picaroni, met on 6 May 1994. They confirmed the relevance of Molino Boschi's evidence as to the date of signature of the broker's confirmation and, as I understand it, although the translation is obscure, they also confirmed the relevance of the issue of arbitration and indicated that they would decide that issue, fixing 7 June 1994 for the hearing of the evidence before Dr Coco. Certainly, when the matter came back before the court on 7 June 1994, the evidence heard related to that issue and the matter was adjourned for Toepfer's lawyer to file copies of the documents used in the English proceedings under s. 27. These documents were filed on 18 October 1994 and on 13 December 1994 a...
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