Mantovani v Carapelli S.p.A. (Bianca)

This is an appeal by Otello Mantovani, the respondents to the appeal being Carapelli S. p. A. They are both, as I understand it, Italian companies, firms or individuals. Disputes arose out of a contract made between the parties, Mantovani as buyers and Carapelli as sellers. In accordance with the express provisions of the relevant contract or contracts, which incorporated a GAFTA Form, the disputes were referred to arbitration in London under the GAFTA Rules. Awards were made by the Umpire, in accordance with the procedure. Those Awards were referred conjointly, by way of appeal, to the Board of Appeal of GAFTA, in accordance with the Arbitration Rules. The Board of Appeal made its Award on 24th October, 1977. It is unnecessary to go into the detail of that Award. It was stated in the form of a Special Case. That was, apparently, by the request of both parties; though whether that was so or not does not, I think, matter. The Board of Appeal awarded that the buyers should pay the sellers the sum of U. S. $1,831,091.80, with interest. That was in respect of the claim made by the sellers against the buyers. On a counterclaim by the buyers against the sellers, the Board of Appeal held that the sellers should pay the buyers the sum of 6,019,078 lire, together with interest thereon at the rate of 10 per cent. per annum.

The Special Case was brought before Mr. Justice Donaldson in the Commercial Court. He gave judgment on 15th February, 1978. In his judgment he upheld the Award of the board of arbitrators in both respects: that is, in respect of the award to the sellers against the buyers and, on the counterclaim, the award to the buyers against the sellers.

From that judgment of Mr. Justice Donaldson the buyers gave notice of appeal to this Court by a notice dated 28th March, 1978. They invited this Court to hold that the judge was wrong in makingthe award in favour of the sellers against the buyers. A notice of cross-appeal and respondents' notice was given by the sellers, dated 17th April, 1978, in which they cross-appealed against the decision of Mr. Justice Donaldson upholding that part of the Award which directed that the sellers should pay the sum to the buyers.

In all those proceedings so far there had been no suggestion of any defect in the jurisdiction of the arbitral tribunal, or of the Commercial Court of this country, or in respect of the appeal to this Court. Therefore it is obvious that it had been accepted by everybody concerned, and all the time expense and costs had been incurred on the basis, that this was an arbitration properly brought; that the matter was properly, and with jurisdiction, before the Commercial Court; and that the appeal to this Court was proper, and with jurisdiction.

The appeal came into the Warned List of this Court in the month of January of this year. It came into the list for hearing today. No indication had been given to this Court or its officers of any difficulty, or objection, or query, or challenge to the jurisdiction of this Court to entertain the appeal, which therefore was listed on the basis of the implied assurance by the solicitors concerned, as officers of this Court, that this matter was properly and with jurisdiction before this Court.

The appeal came to be opened by counsel on behalf of the appellant buyers. At a very early stage of that opening, counsel for the respondent sellers rose to inform the Court - and this was the first time that any indication had been given to this Court of any such matter, whether by way of courtesy or otherwise - that a writ had been served within the last few days upon the sellers or their legal representatives by or on behalf of the buyers, the appellants in this appeal. That writ was dated 6th April, 1979 - that is, now, nearly 3 months ago. Despite the fact that the appeal tothis Court was pending and in the Warned List, this Court was given no indication whatever of this matter. The endorsement on the writ is this - and it is stated that the writ was issued by a solicitor for a party described in the writ as "the plaintiff"; that is, the appellants in this appeal, the buyers - "The plaintiff's claim is for a declaration that (1) The provision for arbitration contained in an agreement in writing No." (so-and-so) "between the plaintiff and the defendant dated 1st August 1974 and which said agreement was made in Italy is of no effect; and (2) The plaintiff be at liberty to revoke and make void the appointment and authority of the Umpire who purported to make three arbitration awards all dated 13th April 1976 by virtue of the said agreement".

We are told by counsel for the appellants that they have received legal advice - I think from an Italian lawyer - the substance of which, as I understood it, was that under the law of Italy, subject to certain exceptions, contracts made between two Italian nationals cannot lawfully provide for jurisdiction for any court other than an Italian court; and that that is the basis of the issue of this writ.

I do not propose to comment, because it is something that may have to be determined hereafter by another court, on the merits or demerits, the chances of success or otherwise, of the litigation which it is sought to put on foot by the issue of that writ. But one thing which is abundantly apparent, and which could not be controverted, as I see it, by anybody, by anything that could be called a process of reasoning, is that it would be a wholly intolerable position that this Court should be invited to determine an appeal from the judgment of the Commercial Court by a party who, at the self-same time, in another court, a subordinate court in this country, has started proceedings claiming that the whole of the process in this country, including therefore the judgment ofMr. Justice Donaldson, is devoid of jurisdiction and that therefore this Court would be dealing with and deciding, if this appeal is proceeded with, questions which are not within the jurisdiction of this Court. If anything can ever properly be described as frivolous, vexatious, and an abuse of the process of the court, it is that. The solemn and serious suggestion apparently is that this Court should go ahead to-day, at the invitation of Mr. Otello Mantovani, the buyer, to decide whether or not Mr. Justice Donaldson had arrived at a right conclusion on the construction of the contract and on the rights and wrongs on matters arising out of the contract when, at the self-same time, in proceedings in the courts in this country, that same person is asserting that the courts of this country have no jurisdiction to decide those matters at all.

In those circumstances, it appears to me that the only possible course for this Court to take is to give the party who is putting forward at one and the same time in the courts of this country a case that the court has jurisdiction and that the court has not jurisdiction, the opportunity, if he sees fit, to make up his mind whether or not he is contending in the courts of this country that this court does not have jurisdiction. If he decides that he is not going to put forward that contention, then he has the opportunity, and he has had the opportunity in this Court, by way of under-taking given through counsel or otherwise, to put an end to the attack upon the jurisdiction of this Court in the other proceedings. But if he does not choose to exercise that election, this Court should not, as I see it, force him to elect to abandon that which he puts forward in his writ. I express no view whatever as to what is likely to be the fate of the claim asserted in that writ. He may, so far as this Court is concerned, if he sees fit, allow it to stand, for whatever fate may follow properly in accordance with the law of this country and the procedure of, this country in connectionwith that writ. But if he does not elect, because he has now an opportunity of electing, to abandon that attack in that other part of the Supreme Court of this country on the jurisdiction of this Court, then he cannot ask us to hear his appeal or to treat his appeal as being an appeal which is now properly before this Court. From the moment when that writ was issued, and from the time when, opportunity having been given, it is not withdrawn, it becomes an abuse of the process of this Court to invite this Court to hear an appeal in a matter in respect of which it is being alleged that it does not have jurisdiction.

I would therefore, without more ado, the election to abandon not having been made, dismiss the appeal as being an appeal which is now plainly and patently an abuse of the process of this Court. In similar circumstances, I have no doubt whatever that it would be similarly held by a court in any other jurisdiction in any civilised country in the world which it was sought to treat in the same way.

There remains the cross-appeal. The sellers have cross-appealed against that part of the judgment of Mr. Justice Donaldson which upheld that part of the Award of the Board of Appeal which directed that the sellers should pay a sum of money to the buyers. The fact that the buyers, as appellants, have behaved in the way in which...