Alfred C Toepfer International GmbH v Société Cargill France
| Jurisdiction | England & Wales |
| Judge | Staughton,Phillips,Robert Walker L JJ |
| Judgment Date | 25 November 1997 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 November 1997 |
Court of Appeal (Civil Division).
Staughton, Phillips and Robert Walker L JJ.
Michael Tselentis and David Bailey (instructed by Cargill) for Cargill.
Stephen Morris (instructed by Middleton Potts) for Toepfer.
The following cases were referred to in the judgment of the court:
Airbus Industrie GIE v Patel [1997] CLC 197
Angelic Grace, TheUNK [1994] 1 Ll Rep 168; [1995] 1 Ll Rep 87 (CA)
British Airways Board v Laker Airways LtdELR [1985] AC 58
Continental Bank NA v Aeakos Compania Naviera SAWLR [1994] 1 WLR 588
Halki Shipping Corp v Sopex Oils LtdWLR [1997] 1 WLR 1268
Heidberg, TheUNK [1994] 2 Ll Rep 287
Lexmar Corp v Nordisk SkibsrederforeningUNK [1997] 1 Ll Rep 289
Mantovani v Carapelli SpAUNK [1980] 1 Ll Rep 375
Midland Bank plc v Laker Airways LtdELR [1986] QB 689
Overseas Union Insurance Ltd v New Hampshire Insurance CoELR [1992] QB 434
Rich (Marc) & Co AG v Società Italiana Impianti PA (“The Atlantic Emperor”)ECAS (Case C-190/89) [1991] ECR I-3855
Schiffahrtsgesellschaft Detlef von Appen mbH v Wiener Allianz Versicherungs AG [1997] CLC 993
Scott v Avery (1855) 5 HL Cas 811
Tatry v Maciej RatajECAS (Case C-406/92) [1995] CLC 275; [1994] ECR I-5439
Toepfer (Alfred C) International GmbH v Molino Boschi SRL [1996] CLC 738
Xing Su Hai, TheUNK [1995] 2 Ll Rep 15
Arbitration — Anti-suit injunction — Brussels Convention — Cause of action — Contracts contained GAFTA arbitration clause — Defendant took proceedings in French court — Plaintiff obtained anti-suit injunction — Whether Scott v Avery clause meant that breach of arbitration clause dispute had to be referred to arbitration — Whether contracts contained exclusive English jurisdiction clause — Whether proceedings to determine validity of arbitration clause were within Brussels Convention — Whether plaintiff's challenge to jurisdiction in French proceedings and English proceedings involved the same cause of action — Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), art. 1(4), 21.
This was an appeal from a judgment of Colman J granting the plaintiff (“Toepfer”) an injunction restraining French proceedings by the defendant (“Cargill”).
In January 1994 Cargill entered into three contracts for the purchase from Toepfer of a total of 9,500 tonnes of soybean meal pellets, CIF Montoir, in France. The contracts were subject to the provisions of GAFTA Form 100 to the effect that the court of England or arbitrators appointed in England should have exclusive jurisdiction over all disputes which might arise under the contract, such disputes to be settled according to the law of England (cl. 31); and that any dispute arising out of or under the contract was to be settled by arbitration in accordance with GAFTA Arbitration Rules No. 125 (cl. 32(a)) and that neither party should bring any action or other legal proceedings against the other in respect of any such dispute until such dispute shall first have been heard and determined by the arbitrator(s) (cl. 32(b), the Scott v Avery (1855) 5 HLCas 811 clause.
Cargill became concerned about the condition of the cargo and gave notice of those concerns to Toepfer. Toepfer responded contending that the contracts on the terms of GAFTA form 100 provided for a sampling and analysis procedure which should be followed. Instead of following that procedure, Cargill obtained orders made on two applications to the Tribunal de Commerce de St Nazaire (“the French court”). Cargill later rejected the major part of the cargo and appointed an arbitrator. Toepfer also appointed an arbitrator in the arbitration. The French court heard and dismissed objections made by Toepfer to the two orders made and Toepfer's appeal to the Cour d'Appel de Rennes against the two orders was dismissed.
Cargill issued proceedings in the French court making a substantive claim for damages against Toepfer. At the same time, however, they gave notice renewing the arbitration under the GAFTA rules. Toepfer then referred to GAFTA arbitration a claim for damages on the ground that Cargill had acted in breach of contract in commencing court proceedings in disregard of the arbitration clause. Arbitrators were nominated in respect of that claim.
Toepfer submitted an objection to the jurisdiction of the French court in respect of the substantive proceedings, invoking the exclusive GAFTA jurisdiction clause and seeking an order that the French court declare itself incompetent and refer the proceedings to arbitration. Toepfer also commenced proceedings in England seeking an injunction restraining Cargill from pursuing the French proceedings. Toepfer's objection in the French proceedings to the jurisdiction of the French court was adjourned, pending the result of the English proceedings. Colman J granted an injunction. Cargill appealed.
Cargill argued that the English proceedings and the French proceedings involved the same cause of action within art. 21 of the Brussels Convention, so that the English court wasbound to stay the English proceedings until the issue raised as to the jurisdiction of the French court has been resolved by the French court which was the court first seized. Clause 31 of the contracts did not apply to the English proceedings; its effect was only to give exclusive jurisdiction over substantive disputes to GAFTA arbitrators. In any event, the English court's jurisdiction was excluded by the Scott v Avery clause in cl. 32 of the contracts.
Toepfer argued that the English proceedings were not subject to the convention owing to the exception of arbitration in art. 1(4). If the convention applied, the proceedings did not involve the same cause of action, so that art. 21 did not apply. The contracts contained exclusive English jurisdiction clauses within art. 17 of the convention which prevailed over art. 21. The Scott v Avery clause did not apply to the English proceedings.
Held, referring questions on the Brussels Convention to the European Court of Justice:
1. As a matter of construction, a Scott v Avery clause could not apply to injunctive proceedings brought for the purpose of enforcing the clause itself. In so far as an issue arose, it was likely to be as to whether or not the substantive dispute fell within the jurisdiction of the arbitrators, which was not a suitable issue for determination by the arbitrators themselves. More significantly, an injunction did not fall within the relief that arbitrators were in a position to provide. For those reasons, which were narrower than those of the judge, the court held that the Scott v Avery clause in cl. 32 did not preclude Colman J from entertaining the claim for relief that was before him.
2. Colman J was wrong to hold that cl. 31 had to be construed as tailored to fit with cl. 32. Clause 31 was designed to apply where the contract provided for arbitration and also where it did not. Where, as here, the contract included cl. 32, the alternative provision in cl. 31 for exclusive jurisdiction of the English court did not take effect. Colman J was wrong to conclude that proceedings to enforce the arbitration clause were, by cl. 31, agreed to be subject to the exclusive jurisdiction of the English court. The proceedings were not subject to an agreed exclusive English jurisdiction.
3. Colman J did not err in principle when granting the anti-suit injunction to restrain Cargill from proceeding in the French court in breach of its contractual agreement to arbitrate. ( The Angelic GraceUNK [1995] 1 Ll Rep 87 followed.)
4. The court referred to the European Court of Justice the questions (1) whether the exception in art. 1(4) of the Brussels Convention extended to proceedings commenced before the English courts seeking: (a) a declaration that the commencement and continuation of proceedings before a French court constituted a breach of an arbitration agreement; (b) an injunction restraining Cargill from continuing the proceedings before the French court, or instituting any further proceedings before any other court, in breach of the arbitration agreement. If not, (2) whether such proceedings constituted the same cause of action as a challenge to the jurisdiction of the French court founded on the same arbitration agreement, so as to require the English court to stay the proceedings pursuant to art. 21 of the convention.
Staughton LJ: For the reasons that have been handed down this appeal will be referred to the European court.
Phillips LJ: This is the judgment of the court.
In January 1994 Cargill entered into three contracts for the purchase from Toepfer of a total of 9,500 tonnes of soybean meal pellets, CIF Montoir, in France. Pursuant to these contracts pellets were carried to Montoir aboard the Gulf Wave, which arrived at Montoir on 7 February. A dispute then arose between Cargill and Toepfer as to whether the pellets complied with the contract. It is common ground that each contract included a clause that required the dispute to be resolved by a GAFTA arbitration, to the exclusion of any other tribunal. This clause should have ensured that the dispute was resolved cheaply and expeditiously by an expert tribunal. The parties have, however, become embroiled in a procedural dispute which raises complex issues as to the interpretation of the Brussels Convention 1968 and which must already have involved legal costs far in excess of the amount at stake in the substantive dispute. Nor will this appeal resolve these issues. They are of general importance and the solution to them...
To continue reading
Request your trial
-
Glencore International AG v Metro Trading International Inc. [QBD (Comm)]
...[1995] CLC 275; [1994] ECR I-5439. Tilly Russ, TheELR [1985] QB 931. Toepfer (Alfred C) International GmbH v Société Cargill France [1998] CLC 198. Contract — Conflict of laws — Exclusive jurisdiction clause — Stay of proceedings — Whether proceedings in France and England were between the ......
-
Atlanska Plovidba and Another v Consignaciones Asturianas SA
...[1970] 1 QB 289. Seabridge Shipping AB v AC Orssleff's Efef's A/S [2000] CLC 656. Toepfer International GmbH v Société Cargill France [1998] CLC 198. Vosnoc Ltd v Transglobal Projects Ltd [1997] CLC 1345; [1998] 1 WLR 101. Welex AG v Rosa Maritime Ltd (The Epsilon Rosa) [2003] 2 CLC 207. Wi......
-
Nomihold Securities Inc. v Mobile Telesystems Finance SA [QBD (Comm)]
...(Comm); [2007] 2 CLC 157. A v B [2007] EWHC 54 (Comm); [2007] 2 CLC 203. Alfred C Toepfer International GmbH v Société Cargill France [1998] CLC 198. Allianz SpA v West Tankers IncECAS (Case C-185/07) [2009] 1 CLC 96; [2009] ECR I-663; [2009] 1 AC 1138. Best Beat Ltd v Rossall [2006] EWHC 1......
-
Nomihold Securities Inc. v Mobile Telesystems Finance SA
...the 1996 Act are mentioned; Compagnie Europeene de Cereals SA v Tradax Export SA [1986] 2 LI. Rep 301 and Toepfer International v Cargill [1998] CLC 198. 40. My approach to this question is as follows. As was stated by Lord Hoffmann in The Front Comor [2007] UKHL 4 at paragraph 19 the Engl......