Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE GEOFFREY LANE,LORD JUSTICE MEGAW |
| Judgment Date | 17 June 1977 |
| Judgment citation (vLex) | [1977] EWCA Civ J0617-7 |
| Date | 17 June 1977 |
| Court | Court of Appeal (Civil Division) |
In the Matter of the Arbitration Act 1950 and In The Matter of an Arbitration
[1977] EWCA Civ J0617-7
Lord Justice Megaw
Lord Jusice Browne and
Lord Justice Geoffrey Lane
In The Supreme Court of Judicature
Court of Appeal
Civil Division
On appeal from Judgment of Mocatta, J.
Mr. MICHAEL MUSTILL, Q.C. and Mr. IAN KINNELL (instructed by Messrs Middleton Potts & Co.) appeared on behalf of the Appellants (Claimants in reference).
Mr. ANTHONY HALLGARTEN (instructed by Messrs Richards, Butler & Co.) appeared on behalf of the Respondents (Respondents in reference).
This is an appeal from the Judgment of Mr Justice Mocatta of 13th July, 1976 which in effect reversed the decision of the Board of Appeal of the Grain and Feed Trade Association (GAFTA) in an award of 6th May, 1975. There is also a Respondents' notice.
Difficulties arose in performing contracts for the sale of soya bean meal for export from the United States of America in the summer of 1975. The United States Government on 27th June, 1973 imposed an embargo, with immediate effect, on the export of, amongst other commodities, soya beans and soya bean meal. On 2nd July, 1973) a licensing system was introduced whereby licences could be granted for 40% of the unfulfilled balance of soya bean meal due to be shipped under pre-existing contracts for export. There were very many such contracts, most of them being individual contracts in a string of contracts of sales and re-sales of the same goods on identical terms. The terms were those which are set out in GAFTA's Contract Form No. 100. Those terms are, as to some of the clauses, complex both in their own wording and in their inter-relation with other clauses: not least the clauses which were said to be principally relevant in the present case. The difficulties arose suddenly, and necessarily involved urgent consideration by all the numerous merchants concerned as to their contractual rights and obligations in the light of the existing facts, the anticipation of what was likely to happen and the meaning and effect of the relevant, or possibly relevant, contractual terms.
It is not surprising that in those circumstances much confusion occurred in the urgent decisions that had to be made and the urgent communications that had to be sent, and thatthere has been much dispute in many cases on many points, resulting in a larger number of arbitrations under the GAFTA arbitration provisions. This case is one of these. A number of others have already found their way to the courts by way of case stated. Three have already been decided in this Court, on their particular facts and on various issues arising thereon in connection with this form of contract. Others, we are told, are now on their way to this Court. The present case, it was said by Counsel, is regarded, at least in some quarters, as the most important of those which have hitherto reached the Courts, because of the nature of the issues raised and the number of pending arbitrations which are likely to be affected by the decision of those issues.
There are a number of issues which the parties regard as relevant, at least on certain hypotheses, for the decision of this appeal; but which, the parties agree, are covered by decisions precluding this Court from deciding differently, even if it were minded to do so. Therefore the parties rightly have not argued those issues before us, but have sought to reserve them for argument, if necessary, in the House of Lords.
If the previous decisions of this Court on those issues should be wrong, the result would be to invalidate at least substantial portions of this Judgment. That is a risk which has to he accepted. It is particularly formidable, and somewhat daunting, in a case such as this, where there are so many issues often interlocking.
In stating the relevant facts and issues, and my conclusions thereon, I shall not attempt to discuss all the arguments and authorities adduced before us. I find it possible to state what appear to me to be the relevant facts in lessdetail than might otherwise have been desirable because the Award of the Board of Appeal, as amended by the agreement of the parties, is set out in full, as is Mr Justice Mocatta's Judgment, in (1977) 1 Lloyd's Reports, 133.
The appellants are Vanden Avenne-Izgem P.V.B.A., "the buyers". The respondents are Bremer Handelsgesellschaft m.b.H, "the sellers". By a contract of 5th April, 1973, incorporating the terms of GAFTA Contract Form 100, the buyers bought from the sellers 2500 tons of soya bean meal, to be shipped from the United States in quantities of 500 tons per month in the months of Way to September 1973 inclusive, C.I.F. Rotterdam. This appeal involves a claim by the buyers which is concerned, and concerned only, with the goods referable to the month of June.
Before the events with which this appeal is concerned, the obligation of the sellers for June shipment had, by agreement between the parties, ceased to be 500 tons, and had become 280 tons. This was because of a cross-contract involving 220 tons. So, as things stood on 27th June, 1973, the sellers were obliged by their contract to ship 280 tons, to be appropriated to their contract with the buyers in respect of the June obligation. This would, in the ordinary way, involve loading the 280 tons on a vessel in a U.S. port during the month of June and the provision of one or more bills of lading which would evidence shipment in June, The sellers would thereafter appropriate to the buyers, by notice to them, the goods thus shipped, and in due course would tender the documents. It is not necessary to go into the contractual provisions as to notice of appropriation for the purposes of any issue which it is for us to decide in this appeal.
The contract provided by Clause 9 of GAFTA 100 that the sellers could claim an extension of shipment of up to 8 days for the shipment period of any month. (The full text of the clause is set out in paragraph 4 of the Award). Notice had to be given claiming the extension, "not later than the next business day following the last day of the originally stipulated period". In this case, the sellers could, not later than 2nd July (1st July was a Sunday) claim an extension up to and including 8th July. If they did so, bills of lading dated on or before 8th July and appropriations by reference thereto would be good performance of the sellers' obligations for June shipment. Clause 9 provided for a percentage diminution of the contract price: 1½% if the full 8 days were used.
The U.S. Government embargo was announced and became effective on 27th June, 1973 (Award, paragraph 7(ii)). The regulations thus introduced required a licence for the export of all soya bean meal, except any such goods already on lighter destined for an exporting vessel or already being loaded. The basis on which licences would be issued would, as the regulations said, be announced not later than the 2nd July. The licensing regulations were introduced on 2nd July (Award, paragraph 7(iii)). Licences could be granted for 40% of the unfulfilled balance under each contract.
The sellers had not by the 27th June put on board ship any part of the June quantity of 280 tons under the relevant contract with the buyers. They had, however, made arrangements in anticipation, to which I shall refer in a moment as a result of the regulations they could not lawfully load and did not load (Award, Paragraph 10A) any goods between 27th June and 2nd July. (They did not have any soya bean mealin lighter or already loading, so that that "loophole" was not open to them). When the licensing system was announced, they applied for, and were granted, a licence for 40% in respect of this contract. (Award, Paragraph 14).
The arrangements which the sellers had already made by 27th June when the embargo was announced are set out in paragraphs 8 and 8A of the Award. Paragraph 8 shows that the sellers had on that date ample soya bean meal of the contract description in store, or in transit to four named ports in the United States, and also shipping space in four vessels chartered to load at those ports. The sellers were committed to sales of about 44,000 tons for June shipment, of which, says the Award, "33,000 tons…. they intended to ship themselves and 11,000 tons they intended to fulfil from second-hand purchases previously concluded".
Paragraph 8A of the Award is of importance in relation to issues in the appeal. It was not included in the Award as made by the Board of Appeal. It was added thereafter by agreement between the parties, as were some other matters set out in the Award, as being facts which they both agreed to be correct on the evidence before the Board and which they regarded as relevant. Although this procedure is, I think, unusual, it was followed solely for the purpose of saving the time and expense of going back to the Board of Appeal to ask, by consent of the parties, for amendments to the Award to include relevant matters, on which findings were regarded as necessary for issues in the Special Case to be decided by the Court.
Paragraph 8A reads as follows: "It was the Sellers' intention to ship within June whatever quantity was possibleand as to the balance to seek to and to effect shipment under extensions in accordance with clause 9. It is probable that of the four vessels which had been stemmed (a) the 'Cape Palmas' and 'Saarland' would have been loaded either within June or within June plus extension and (b) the 'Kyravathia' and 'White River' would have been loaded within the June extension but not within June".
The effect of paragraph 8A is that the arbitral tribunal has found (or, rather, is deemed by agreement between the parties to have found) that, as...
To continue reading
Request your trial
-
Poets Chase Freehold Company Ltd v Sinclair Gardens Investments (Kensington) Ltd
... ... Mr Fancourt drew my attention to Bremer v Vanden [1978] 2 Lloyds Law Report 109 at 127 and to ... ...
- Comdel Commodities Ltd v Siporex Trade S.A. (No. 2)
-
Glencore Grain Rotterdam B.v v Lebanese Organisation for International Commerce (Lorico)
... ... 893 at 903C. In Berg v. Vanden [1977] 1 Lloyd's Rep. 499 he referred to Panchaud Freres ... would be unfair or unjust to allow him to do so" (Bremer v. Mackprang [1979] 1 Lloyd's Rep. 221 at 226) ... ...
- Glencore Grain Ltd v Flacker Shipping Ltd (Happy Day)