Midgulf International Ltd v Groupe Chimiche Tunisien [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Teare J |
| Judgment Date | 13 July 2009 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 13 July 2009 |
Queen's Bench Division (Commercial Court).
Teare J.
Sara Masters (instructed by Swinnerton Moore LLP) for the claimant.
Michael Nolan (instructed by Salans) for the defendant.
The following cases were referred to in the judgment:
IR Commrs v FryUNK [2001] STC 1715.
Pagnan SpA v Feed Products LtdUNK [1987] 2 Ll Rep 601.
Contract — Arbitration clause — Earlier contract between claimant and state owned Tunisian enterprise for sale of sulphur contained London arbitration clause — Claim that second contract also provided for London arbitration — Any oral agreement as to main terms for purchase of sulphur did not incorporate terms of earlier agreement — Defendant did not accept detailed terms from earlier agreement but made counter-offer — Counter-offer accepted by claimant did not incorporate London arbitration clause — Application to appoint arbitrator and continue anti-suit injunction dismissed.
This was the trial of the issue whether the relevant contract between the parties contained a London arbitration clause.
Midgulf was a trader in sulphur. GCT was a company owned by the state of Tunisia which had a substantial demand for sulphur. The parties entered into a contract in June 2008 for the sale and purchase of sulphur. That contract contained a London arbitration clause. A second contract was made in July. GCT complained about the quality of the sulphur supplied under the June contract and also complained about the quality of sulphur supplied under the first shipment pursuant to the July contract. As a result the July contract was terminated and substantial claims and counterclaims under both contracts had been made. It was agreed that the dispute under the June contract had to be resolved in London arbitration. Midgulf wished the dispute under the July contract also to be resolved in London arbitration. GCT wished it to be resolved in the courts of Tunisia where it had begun proceedings for a declaration that the July contract did not contain an arbitration agreement and proceedings claiming damages for breach of the two supply agreements.
Midgulf applied to the court to appoint an arbitrator pursuant to s. 18 of the Arbitration Act 1996 and to continue an anti-suit injunction restraining GCT from taking proceedings in Tunisia, and GCT applied for orders that the English court had no jurisdiction to grant the orders sought by Midgulf. The court directed a speedy trial of the issue as to the terms on which the July contract was agreed and continued the anti-suit injunction until that issue was determined ([2009] 1 CLC 984; [2009] EWHC 963 (comm)).
Midgulf's case was that it had made an offer in writing (dated 2 July 2008) stating that jurisdiction and arbitration were to be in accordance with the draft contract dated 27 June 2008 which provided for English law and London arbitration; that offer was accepted orally on 4 July; alternatively the offer was accepted by a fax dated 7 July 2008 (but sent on 8 July 2008); alternatively that fax was a counter-offer which Midgulf accepted.
Held, dismiss Midgulf's application to appoint an arbitrator and continue the anti-suit injunction:
1. In the circumstances a reasonable man with knowledge of the relevant background available to both parties would not conclude that GCT, when confirming the July purchase of sulphur, was confirming each of the details in the contract dated 27 June 2008 to which reference had been made in the offer dated 2 July. What was confirmed in the telephone call of 4 July was GCT's agreement to purchase 150,000 mt of sulphur at $895 per ton. Such an agreement could be enforceable as an agreement on main terms only, with the detailed terms to be agreed later. However, if the oral agreement of 4 July was enforceable it did not contain a London arbitration clause. (Pagnan SpA v Feed Products LtdUNK[1987] 2 Ll Rep 601considered.)
2. There were considerations which suggested that the fax dated 7 July should reasonably be understood as an acceptance of the offer made on 2 July (as later amended), but there were other considerations pointing to the contrary conclusion. The fax did not state in terms that the offer dated 2 July was accepted. On the contrary it purported to confirm the purchase “at the following conditions”. Those conditions replicated the terms specifically set out in the offer of 2 July (save for the maximum draft condition) but did not refer to the latter half of the offer which said that a number of other clauses, including jurisdiction and arbitration, were to be as per the draft contract dated 27 June. The omission suggested that GCT was not intending to contract on those terms. GCT did not in terms say that it had accepted the detailed terms which Midgulf had sought to incorporate from the draft contract dated 27 June but instead set out the conditions on the basis of which GCT had confirmed the purchase. Those conditions did not include the detailed terms which Midgulf had sought to incorporate from the draft contract dated 27 June. In those circumstances it was not reasonable to construe the fax dated 7 July as if GCT had accepted those detailed terms. The maximum draft condition was specifically set out because it was a main term of significance to GCT. The fax was therefore a counter-offer, not only because of the maximum draft condition but also because the terms on which GCT was willing to contract did not include the detailed terms referred to in the offer of 2 July which were to be incorporated from the draft contract dated 27 June.
3. The counter-offer was accepted by Midgulf's fax dated 9 July. A contract was then formed on the conditions set out in GCT's fax dated 7 July. They did not include a London arbitration clause.
Teare J:
1. This is the second judgment of the court in this matter. The first judgment is reported as [2009] 1 CLC 984; [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.
2. 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...
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Midgulf International Ltd v Groupe Chimique Tunisien
...dispute depends on the proper interpretation of a small number of communications between the parties. Teare J ([2009] EWHC 1684 (Comm); [2009] 1 CLC 1000) concluded that there was no arbitration agreement but he gave Midgulf permission to appeal. Facts 2. Midgulf is a Cypriot company. GCT i......