Gulf International Ltd v Groupe Chimique Tunisien
| Jurisdiction | England & Wales |
| Judge | Lord Justice Toulson,Lord Justice Patten,Lord Justice Mummery |
| Judgment Date | 10 February 2010 |
| Neutral Citation | [2010] EWCA Civ 66 |
| Docket Number | Case Nos: A3/2009/1664, A3/2009/1664(A), 2008 Folio 1057, 2009 Folio 192 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 February 2010 |
[2010] EWCA Civ 66
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Teare J
Before: Lord Justice Mummery
Lord Justice Toulson
and
Lord Justice Patten
Case Nos: A3/2009/1664, A3/2009/1664(A),
A3/2009/1664(B), A3/2009/1664(C)
2008 Folio 1057, 2009 Folio 192
Stewart Shackleton, Solicitor advocate (instructed by Eversheds LLP) for the Appellant
Michael Nolan (instructed by Salans LLP) for the Respondent
Hearing dates: 19 and 20 January 2010
Lord Justice Toulson:
The appellant, Midgulf, seeks two orders: an order under s18 of the Arbitration Act 1996 for the appointment of an arbitrator to determine a dispute between itself and the respondent, GCT, relating to a contract made in July 2008 for the sale by Midgulf to GCT of 150,000 mt of sulphur, and an anti-suit injunction to restrain GCT from pursuing parallel proceedings in Tunisia. Both parties contend for the existence of a sale contract, but they differ in their analyses of what were the offer and acceptance and whether the dispute is governed by an English arbitration agreement. The jurisdiction dispute depends on the proper interpretation of a small number of communications between the parties. Teare J concluded that there was no arbitration agreement but he gave Midgulf permission to appeal.
Facts
Midgulf is a Cypriot company. GCT is a Tunisian state-owned entity. The origins of the present dispute go back to an earlier contract made between them in June 2008. On 25 June 2008 Midgulf sent to GCT a written offer for sale of 23,000 mt of sulphur for delivery at Gabes Tunisia. The terms of the offer included the following:
“Buyer to guarantee the draft at Gabes Tunisia to be 32 feet
…
Arbitration. English law to govern. Venue in London.
…
All other terms and conditions as per Midgulf Saudi Arabia standard sales contract.”
On 26 June 2008 GCT wrote to Midgulf:
“Further to the above mentioned offer and our subsequent phone exchanges, we are pleased to confirm our agreement to purchase the offered cargo provided the following amendments to your offer:
…
The origin of the cargo is the Kingdom of Saudi Arabia produced by Saudi Aramco quality of which shall comply with GCT standard specifications as per annex 1 herewith attached.
…
The max guaranteed draft at both discharging ports Gabes and Sfax is 31 feet high tide.
…
Other terms and conditions as per your a/m offer except for its two last lines which must be cancelled.”
The “two last lines” referred to were the words “all other terms and conditions as per Midgulf Saudi standard sales contract”. The evidence was that GCT had not at that stage seen Midgulf's Saudi Arabia standard sales contract.
On 27 June 2008 Midgulf sent two faxes to GCT. The longer of the two began “Thanks for your purchase confirmation which we have accepted”. The shorter stated:
“Thank you for your confirmation dated 26th of June, 2008. Kindly find attached the contract signed and stamped by us. Kindly countersign and stamp and send us a copy to the following fax number…”
GCT did not sign or return the attached contract.
Teare J accepted for the purposes of the applications before him that the June contract was concluded by Midgulf's longer fax dated 27 June, which constituted an acceptance of the GCT's counter offer dated 26 June (but made it clear that his decision was not intended to bind arbitrators appointed in relation to the June contract) and there is no appeal against that conclusion. However, as will shortly appear, the form of contract sent by Midgulf to GCT with its shorter fax dated 27 June is relevant to the question of the existence of an arbitration agreement governing the dispute regarding the July contract.
The draft contract, as I will call it, included the following terms:
“8. Shipment
…
Buyer to guarantee the draft at Port Gabes or Sfax, Tunisia, is 31.00 feet salt water.
…
10.4.4. Other terms
Buyer guarantees that vessel will be safely accommodated and discharged at discharge port if vessel arrive at a maximum draught of 31 feet…
…
14. Jurisdiction
This contract is to be construed and governed in all respects in accordance with English law.
15. Arbitration
English law to govern. Venue in London.”
On 2 July 2008 Midgulf sent to GCT an offer headed “Crushed sulphur offer for 3 rd quarter 2008”. The offer (expressed to be “subject reconfirmation”) was for the sale of 150,000-mt +/- 10% (seller's option) of sulphur of Saudi Arabian origin at a price of US$ 897 pmt CFR (free out) Gabes or Sfax. The offer included quantity specifications. The period of shipment was expressed to be “July, August, September 2008. Schedule to be agreed in due course.”
The offer stated that all other terms and conditions pertaining, among other things, to jurisdiction and arbitration were to be “as per our contract no s/s/sulphur/2008/06/27 dated June 27 th, 2008”.
The offer concluded by asking for GCT's acceptance by 3 July.
Later that day, after a telephone conversation, Midgulf sent a fax to GCT amending the offer price to US$ 895 pmt and extending the time for acceptance until Monday 7 July.
On Friday 4 July there was a telephone conversation, to which I will return, between Midgulf's Chairman and CEO, Dr Dajani and GCT's central manager for the purchases of raw materials, Mr Hamrouni.
On 8 July Midgulf sent an email to GCT complaining that “contrary to our oral agreement of sale on last Friday, today it is Tuesday 8/07/2008, and we still haven't received GCT written confirmation for the 150,000 mt sulphur contract”. On the same day GCT sent to Midgulf a fax, dated 7 July, as follows:
“Further to your offer by fax dtd 02/07/08 and further to your fax ref mg/j/2851 dtd 02/07/08, we are pleased to confirm the purchase of 150,000 mt of Saudi crushed lump sulphur at the following conditions:
Product: bright yellow crushed sulphur
Quantity: 150,000 mt +/- 10% (seller's option)
Draft at Gabes and Sfax ports: 31 feet maximum at high tide
Quality specifications: as per your offer by fax dtd July 2 nd 2008
Origin: Saudi Arabia
Packing: Bulk
Shipment: July, August, September 2008
Price: USD 895 pmt cfr (free out) Gabes or Sfax (buyer option) to be declared before crossing Suez Canal.
Consequently, you are kindly requested to submit to us the loading schedule at the rate of probably two vessels per month as well as the name of the performing vessels in July 2008.
We congratulate ourselves for this conclusion and look forward to its smooth execution.”
Midgulf responded by email dated 9 July:
“Thank you for your confirmation of acceptance of our offer dated 02/07/2008 per your fax….dated 07/07/2008. Accordingly we are in contract…”
On 14 July GCT sent a fax to Midgulf proposing as follows:
“ Subject: Crushed sulphur contract
Further to your fax dtd 27/06/08 enclosing the am contract, please find hereafter our proposed amendments
14. Jurisdiction
This contract is to be construed and governed in all respects in accordance with Tunisian law.
15. Arbitration
We suggest that the settlement of disputes to be submitted either to the Tunisian jurisdiction or to the arbitration of the International Chamber of Commerce with the application of a neutral law by both parties.”
This fax was not addressed to Dr Dajani and did not come to his attention at the time. Meanwhile, on 21 July GCT raised a complaint about the quality of the sulphur delivered under the June contract and on the following day it raised a similar complaint about the first shipment under the July contract, declaring that the contract was therefore “resiliated” and that all its previous confirmations and agreements were null and void.
Legal proceedings
At one stage there was a dispute about whether the June contract was governed by an English arbitration agreement, but that has been resolved and English arbitrators have been or are in the process of being appointed.
In relation to the July contract, Midgulf served a notice of arbitration on 26 August 2008, but GCT disputed that the contract was governed by English law or by an English arbitration agreement, and so on 13 October 2008 Midgulf issued its application for the appointment of an arbitrator under s18 of the Arbitration Act.
On 24 October 2008 GCT issued proceedings in Tunisia seeking a declaration that the July contract was not governed by an arbitration agreement. On 13 November 2008 GCT issued further proceedings in Tunisia for damages under the July contract amounting to the equivalent of approximately £1.9 million, based on non-compliance of the sulphur with agreed quality specifications.
On 18 December 2008 GCT issued an application in the Commercial Court to challenge the jurisdiction of the court in relation to Midgulf's application for the appointment of an arbitrator.
On 2 February 2009, shortly before there was due to be an oral hearing in Tunisia of GCT's claim in the declaration action, Midgulf gave notice to GCT that it intended to apply for an anti-suit injunction to restrain GCT from pursuing the Tunisian proceedings. At GCT's request, Midgulf gave it until 12 February to decide its response. The Tunisian court heard GCT's claim in the declaration action on 7 February and reserved its judgment.
On 13 February 2009 Midgulf issued its application for an anti-suit injunction. The matter came before Burton J for a preliminary hearing on 19 February. After hearing argument for both parties he granted a temporary injunction...
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