Excomm Ltd v Bamaodah (St. Raphael)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE LLOYD,THE MASTER OF THE ROLLS,LORD JUSTICE SLADE |
| Judgment Date | 21 December 1984 |
| Judgment citation (vLex) | [1984] EWCA Civ J1221-2 |
| Docket Number | 84/0500 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 1984 |
[1984] EWCA Civ J1221-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR. JUSTICE WEBSTER)
Royal Courts of Justice
The Master of the Rolls
(Sir John Donaldson)
Lord Justice Slade
and
Lord Justice Lloyd
84/0500
MR. S. BOYD, Q.C. and MR. R. AIKENS (instructed by Messrs. Sinclair Roche & Temperley) appeared on behalf of the (Plaintiffs) Appellants.
MR. D. JOHNSON, Q.C. and MR. C. RUSSELL (instructed by Messrs. Coward Chance) appeared on behalf of the (Defendant) Respondent.
This is an appeal from an interlocutory order of Mr. Justice Webster, pursuant to leave granted by Lord Justice Eveleigh on 20th January, 1984.
The case is concerned with the enforcement of an arbitration award under section 26 of the Arbitration Act 1950. Section 26 provides:
"An award on an arbitration agreement may, by leave of the High Court or a judge thereof, be enforced in the same manner as a judgment or order to the same effect, and where leave is so given, judgment may be entered in terms of the award."
The dispute between the parties arises out of a contract for the sale of 10,000 metric tons 10 per cent more or less of Australian White Wheat C and F Jeddah. The contract was entered into as long ago as January, 1976.
The plaintiffs, who were the claimants in the arbitration, are Excomm Ltd., a company incorporated in Bermuda, but with its headquarters in Switzerland. It is said to be a member of the Tradax Group. The defendant, Mr. Bamaodah, carries on business in Saudi Arabia.
The contract was negotiated through two intermediaries, Saudi Marketing Establishment, with its office in Jeddah, and Marpro Ltd., with its office in London.
According to the plaintiffs the contract is contained in or evidenced by a broker's note dated 27th January, 1976. The broker's note is set out in a letter from Marpro Ltd. to the plaintiffs dated 29th January, 1976, which starts as follows:
"We thank you for the following business concluded through our intermediary."
The letter then sets out the broker's note under the caption "Contract 30287/BSS 1029". There is a provision under which the buyers guaranteed a discharge rate of 150 metric tons per hatch per weather working day, with time to count for discharge from the next working period after notice of readiness. Special Condition 3 provides:
"All other terms and conditions not in contradiction with the above terms as per GAFTA Contract No. 14 (of which both parties admit that they have knowledge and notice…)"
That document was signed by the plaintiffs as sellers and Marpro Ltd. as brokers. A copy of the same document was sent to Saudi Marketing Establishment for onward transmission to and signature by the defendant. The defendant never signed. He says he never saw the broker's note until much later, about the end of May, 1978.
GAFTA Form 14 provides for all disputes arising out of the contract to be referred to arbitration in London in accordance with the arbitration rules specified in Form 125.
In addition I should refer to Clause 32 which provides:
"1. Buyer and seller agree that, for the purpose of all proceedings, either legal or by arbitration, this contract shall be deemed to have been made in England, and to be performed there…
2. If either party thereto resides or carries on business elsewhere than in England or Wales, he shall nevertheless, for the purpose of all proceedings, either legal or by arbitration, be deemed to be ordinarily resident or carrying on business at the office of the Grain and Feed Trade Association Ltd.…
3. The service of proceedings, either legal or by arbitration, upon any party to whom paragraph 2 of this clause applies by leaving the same at the office of the Grain and Feed Trade Association Ltd. together with the sending by post (whether ordinary or registered) of a copy thereof to his address outside England or Wales (if known) shall be deemed good service…"
Form 125 contains the arbitration rules. Clause 2(c) provides:
"If one party has appointed his arbitrator, despatched notice in writing of the appointment to the other party and called upon that party to appoint his arbitrator, and the party fails to comply within nine consecutive days of the notice being served…then, either party may apply to the Association for the appointment of an arbitrator, to act on behalf of the party who has failed to appoint."
Clause 3 of the arbitration rules sets out the procedure for claiming arbitration, and imposes certain time limits.
In due course the plaintiffs nominated the St. Raphael to load under the contract.
She loaded a total quantity of over 16,000 tons of wheat. The balance over and above the 10,000 tons sold to the defendant was sold to Mohammed Aljifri. Like the defendant Mr. Aljifri also carries on business in Jeddah. He bought 5,000 tons 10 per cent more or less on terms identical to the defendant except that the broker's note (if the contract was contained in the broker's note) was BSS 1028, not BSS 1029. We are not here directly concerned with contract BSS 1028. But the history of the two contracts is intertwined.
According to a Statement of Facts drawn up at the port of Jeddah, and signed by or on behalf of the defendant, the vessel arrived on 17th May, 1976, with 16,308 tons of wheat on board.
She gave notice of readiness at 1100 hours on 18th May. Notice of readiness was accepted at 1130 hours the same day. However she did not berth until 2nd August, 1976. Discharging commenced the same day, but was not complete until 21st November, 1976.
The defendant says that the vessel was not in fact ready when she gave notice of readiness, since her cargo gear was incapable of discharging at the contractual rate. Accordingly the notice of readiness was, according to the defendant, invalid; and his acceptance of the notice of readiness and his signature on the Statement of Facts should be disregarded.
The plaintiffs on the other hand say that they are owed a very large sum by way of demurrage.
According to the plaintiffs' calculations, the amount due is $385,125, less $166,666 which they have already received under the terms of an irrevocable letter of credit in their favour in respect of demurrage which might become due to the vessel at the port of discharge. The balance of demurrage due to the plaintiffs is thus said to be $218,459.
By letter dated 11th February, 1977, the plaintiffs claimed arbitration. They appointed their arbitrator in accordance with the GAFTA Arbitration Rules. The letter is headed "Contract BSS 1029".
On 4th March they gave notice that they would invite GAFTA to appoint an arbitrator on the defendant's behalf. That letter was sent to the defendant at his address in Jeddah by registered mail.
On 23rd March the defendant replied. He purported to withdraw his acceptance of the notice of readiness. He then dealt with the claim for demurrage on its merits. So far from any further sum being due by way of demurrage from the defendant to the plaintiffs, he maintained that he had already paid too much, and would be claiming a refund. The letter concludes:
"In the meantime we reserve our rights to claim damages, as provided in the contract, from you and/or owners of the vessel, for breach of contract whereby we have suffered heavy losses."
There is no suggestion in that letter that the contract was not contained in BSS 1029; nor is there any suggestion that any dispute under the contract was not subject to GAFTA arbitration.
On 31st May the defendant and Mr. Aljifri wrote a joint letter, this time under the heading "Contract BSS 1029 of 27th January, 1976" claiming a refund of $179,349 demurrage overpaid. They said that unless the sum was paid they would have no alternative but to hand over the file to their solicitors to seek legal action.
On 31st July they wrote a further letter in similar terms under the same heading. The letter concludes:
"As advised you earlier we have handed over the file to our solicitors for recovery of the aforementioned amount. Meantime please extend the time limit of our claim."
The plaintiffs say that must refer to the time limit for claiming under the GAFTA Arbitration Rules.
There the matter rested until 6th April, 1978, when the plaintiffs wrote answering the defendant's case on the merits, point by point, and repeating that they would ask GAFTA to appoint an arbitrator on the defendant's behalf. The defendant says that he answered that letter. But, if he did, we do not have a copy.
On 30th May the plaintiffs wrote to GAFTA setting out the terms of the contract in outline, and asking for the appointment of an arbitrator. They sent a copy of that letter to the defendant.
By letter dated 16th June, 1978 GAFTA informed the defendant that they had appointed Mr. Morgan-Jones to act as his arbitrator. On 21st June, 1978 Mr. Morgan-Jones asked the defendant for instructions.
On 26th June, 1978 the defendant wrote back to the plaintiffs in reply to the plaintiffs' letter of 30th May, saying that he had nothing to add to his earlier letters, and repeating his claim for $179,349. He sent a copy of that letter to GAFTA.
One week later, on 2nd July, 1978 things took a sudden turn. In a letter of that date, the defendant refers, inter alia, to his earlier letter which we do not have, and continues:
"We reiterate that we are not signatories to any contract with the suppliers nor are we members of GAFTA, as such your proceedings with...
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