Gulf International Ltd v Groupe Chimique Tunisien
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE TEARE,Mr. Justice Teare |
| Judgment Date | 13 July 2009 |
| Neutral Citation | [2009] EWHC 1684 (Comm),[2009] EWHC 963 (Comm) |
| Docket Number | Case No: 2008 Folio 1057 and,Case No: 2008 Folio 1057 and 2009 Folio 192 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 13 July 2009 |
[2009] EWHC 1684 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr. Justice Teare
Case No: 2008 Folio 1057 and 2009 Folio 192
Sara Masters (instructed by Swinnerton Moore LLP) for the Claimant
Michael Nolan (instructed by Salans) for the Defendant
Hearing dates: 8,9 and 17 June 2009
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr. Justice Teare:
This is the second judgment of the court in this matter. The first judgment is reported as [2009] EWHC 963 (Comm). Both judgments arise in the context of an application by Midgulf that an arbitrator be appointed pursuant to section 18 of the Arbitration Act 1996 and for the continuation of an anti-suit injunction. At the end of my first judgment I directed that there be a speedy trial of the issue whether the relevant contract between the parties contained a London arbitration clause. The trial of that issue required oral evidence.
The facts giving rise to the dispute between the parties are set out at paragraphs 1–27 of my first judgment. I do not repeat them but they should be regarded as having been incorporated into this judgment. I should now add the following:
i) On 3 July 2008 GCT submitted a memorandum to the Tunisian Higher Commission for Public Deals seeking its permission to negotiate with Midgulf and purchase 150,000 mt of sulphur at a price of US$895 per mt CFR. The text of the memorandum suggests that other producers were seeking prices at $950-$1000 per mt and so the price on offer from Midgulf was regarded as attractive.
ii) On 4 July 2008 the Tunisian Higher Commission for Public Deals considered the proposed purchase of 150,000 mt of sulphur.
iii) Also on 4 July the purchasing department of GCT sent to the legal department the draft contract dated 27 June which had been amended to refer to the proposed purchase of 150,000 mt of sulphur and sought its opinion.
iv) On the same day the purchasing department also communicated with the financial department concerning the proposed purchase of 150,000 mt of sulphur and sought its opinion.
v) On 9 July the Higher Commission of Public Deals formally gave its permission in writing to the purchase of 150,000 mt of sulphur.
vi) Also on 9 July the legal department replied to the purchasing department suggesting that the contract for the purchase of 150,000 mt of sulphur be governed by Tunisian law and that disputes be resolved either in Tunisia or by ICC arbitration with the application of a neutral law. This appears to have been the basis of the fax dated 14 July sent by GCT to Midgulf (see paragraph 25 of my first judgment).
Midgulf's case has been enlarged since the hearing which gave rise to the first judgment. The London arbitration clause is now said to have been contained in or evidenced by:
i) An offer dated 2 July 2008, accepted orally on 4 July 2008; and then confirmed or evidenced by fax dated 7 July 2008 (but sent on 8 July 2009);
ii) Alternatively, by an offer dated 2 July 2008, as accepted by a fax dated 7 July 2008 (but sent on 8 July 2008), “main terms” having been agreed orally in the intervening period on 4 July 2008;
iii) Alternatively, by an offer dated 2 July 2008, a counter-offer by fax dated 7 July 2008 (but sent on 8 July 2008) and an acceptance by e-mail dated 9 July 2008.
The oral agreement on which reliance is placed is said to have been made during a telephone conversation on 4 July 2008 between Dr. Mohamed Dajani, the Chairman and CEO of Midgulf, and Mr. Taoufik Hamrouni, GCT's Central Manager for the purchase of raw materials. Mr. Hamrouni appears to have had some formal limits on his authority but there was no evidence that Dr.Dajani was aware of them. Both gentlemen gave oral evidence. (Mr. Samarraie, Mid-Gulf's chartering manager, also gave evidence but his evidence did not directly involve the conversation of 4 July.) At the end of their evidence I reached the conclusion that whilst each sought honestly to assist me with his recollection of their telephone call on 4 July 2008 the evidence of each owed, not surprisingly, something to reconstruction as well as to recollection.
Thus, Dr. Dajani said in his statement dated 16 January 2009 that “at no time in these negotiations or discussions did Mr. Hamrouni say anything at all about needing to obtain any approval from anyone else for this contract.” In his second witness statement dated 21 April 2009 he said, with respect to Mr. Hamrouni's statement that he told him that the details of the July contract had to be considered by the GCT's legal and finance department, that that was “absolutely not correct: nothing of this nature was ever said by Mr.Hamrouni.” However, when Dr.Dajani gave evidence on 8 June 2009 he added that “Mr. Hamrouni informed me clearly that he got all the approvals needed to accept my offer of 2 nd July.” His diary note did not support this addition and if Mr. Hamrouni had said what is now attributed to him one would have expected Dr. Dajani to have mentioned it in either his first or second statement. A reasonable inference is that Dr. Dajani, in seeking to recollect the conversation and put it in the context of the dispute which has since developed between the parties, has persuaded himself that Mr. Hamrouni did say what he now attributes to him. Indeed, when he was cross-examined about this he said “you know as the case develops and I see that this 4 th July conversation became a crucial point, I have recollected much deeper and focussed much more on what was said than what I did when I wrote this testimony. It was recollection and double checking my thoughts and my dates and my time.”
Similarly, Mr. Hamrouni's evidence altered as it was probed in cross-examination. In his examination in chief he said that he “got a green light” from the secretary of the Higher Commission for Public Deals but not before his telephone conversation with Dr. Dajani on 4 July. But in his cross-examination he said that when he spoke to Dr. Dajani he had already been given the green light. I formed the view that Mr. Hamrouni did not have a clear recollection of the relevant events and sought to reconstruct events rather than give his recollection. Indeed, Mr. Hamrouni accepted that he had difficulty in recalling the details of the telephone conversation.
Dr. Dajani's account of the conversation in his first statement was that on 4 July 2008 he received a call from Mr. Hamrouni in which Mr. Hamrouni “enthusiastically confirmed GCT's agreement to our terms for the purchase of 150,000 metric tons at a price of US$895 per metric ton CFR. I made a note of this in my diary. Mr. Hamrouni said that on this occasion his boss would sign the confirmation fax and that he would only be available to do this the following Monday, 7 July 2008. He explained that this was merely a formality and left me in no doubt that there was an agreement between us for the 150,000 metric tons and that we should go ahead immediately and nominate tonnage for the first shipments.” Mr. Hamrouni's first account of the conversation was he told Dr.Dajani that “we were interested in buying the sulphur and that the price he was proposing was in line with the market price at the time” but that he “would have to report to different departments in GCT for the final decision.”
The best evidence of the telephone conversation is Dr. Dajani's diary note, the authenticity of which was not challenged. Against the time of 1 pm GMT for 4 July 2008 he records that Mr. Hamrouni “confirmed purchase of 150,000 mt C.L. ARAMCO sulphur @ $895 and his fax would follow on Monday.” Dr. Dajani expanded on this in his first statement by saying that the fax was to come from Mr. Hamrouni's “boss”. No reason was suggested for not accepting this amplification of the diary entry. When the fax came it was from GCT's chairman and managing director.
Dr. Dajani said in his first statement that Mr. Hamrouni “enthusiastically confirmed GCT's agreement to our terms for the purchase of 150,000 metric tonnes at a price of US$895 per metric tonne.” I prefer the evidence of the diary entry which makes no reference to the terms (apart from price) having been accepted. It is accepted that the detailed terms were not discussed. Dr. Dajani also said in his statement that Mr. Hamrouni told him that the fax was a formality. I am not satisfied that this exact word was used, for on 8 July (before the fax dated 7 July had been received) Dr. Dajani complained that the written confirmation had not been received, which suggests that the fax was regarded as more than a formality. Also, the conversation was in both Arabic and English. However, it seems likely that Mr. Hamrouni gave the impression that there was no doubt that the confirming fax would be sent and that Midgulf could proceed to nominate vessels.
Mr. Hamrouni said in his second witness statement (which was his first comment on the conversation of 4 July) that he told Dr.Dajani that “we were interested in buying the sulphur.” However, it is clear from Dr. Dajani's diary note that Mr. Hamrouni went further than that and agreed to purchase at the stated price. Indeed, in cross-examination Mr. Hamrouni accepted that he agreed “the main terms” on the telephone. Mr. Hamrouni also said that he told Dr.Dajani that he would have to “report to different departments in GCT for the final decision.” I am unable to accept that this was said. Mr. Hamrouni's recollection of events was neither firm nor clear, even allowing for the fact that his English was not perfect. Moreover, in his first statement he said that...
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