Papas Olio JSC v Grains & Fourrages SA
| Jurisdiction | England & Wales |
| Judge | Lord Justice Toulson,Lord Justice Richards,Lord Justice Mummery |
| Judgment Date | 18 December 2009 |
| Neutral Citation | [2009] EWCA Civ 1401 |
| Docket Number | Case No: A3/2009/1367 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 December 2009 |
[2009] EWCA Civ 1401
Gross J
Before: Lord Justice Mummery
Lord Justice Richards
and
Lord Justice Toulson
Case No: A3/2009/1367
2008 Folio 754
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION COMMERCIAL COURT
Steven Thompson (instructed by Mich ael Robinson) for the Appellant
John Russell (instructed by Hill Dickinson LLP) for the First Respondents
Hearing date: 16 December 2009
Lord Justice Toulson:
Introduction
This appeal arises from a first tier FOSFA arbitration award made in favour of the first respondent, G & F, against the appellant, Papas. Papas sought to appeal to FOSFA's Appeal Panel, but its notice of appeal was rejected by FOSFA as being out of time. Papas applied to the Commercial Court for a direction under s18 of the Arbitration Act 1996 that FOSFA should appoint an appeal tribunal to hear its proposed appeal. FOSFA took no part on the hearing of the application and is taking no part in the hearing of this appeal, its position being that it is content to abide by the order of the court. Gross J agreed with FOSFA's view that the proposed appeal was out of time and dismissed Papas’ application. Papas appeals against that decision.
FOSFA Rules of Arbitration and Appeal
The relevant provisions are as follows:
“6. PROCEDURE FOR ARBITRATION AWARDS
(b) When an award has been signed it shall be the duty of the arbitrators…to lodge the original and one copy with the Federation who shall date them and give notice to the parties named in the award that the award is at their disposal upon payment of the fees and expenses of the arbitration. Such payment must be received by the Federation within 42 days of the date of the award or the parties shall forfeit their right to appeal against the award under Rule 7. On receipt of payment, the Federation shall immediately send the original award to the party who has paid and send a copy of the other party…
7. PROCEDURE FOR CLAIMING APPEAL AND TIME LIMITS
(a) Any party to an award of arbitration shall have the right to appeal to the Appeal Panel of the Federation provided that payment of the fees and expenses of the arbitration was made to the Federation within 42 days of the date of the award as per Rule 6(b) and that notice of appeal is received by the Federation not later than 12.00 hours on the 28 th consecutive day after the date on which the award is sent to the parties, in accordance with Rule 6(b).
…
(e) Should it not be possible to perform any of the foregoing acts within the time limits stipulated, application may be made to the Federation for an extension of the time limit, which extension may be granted at the absolute discretion of the Federation.
11. GENERAL
(b) Any notice may be delivered personally or left at the place where the party to whom it is to be delivered is carrying on business or (by reason of the provisions of the contract) is to be considered to be carrying on business. A copy shall be delivered to the Federation. “
THE ARBITRATORs’ AWARD
The dispute concerned the existence of a contract for the purchase of Bulgarian sunflower seeds by G & F from Papas.
The arbitrators found that in early October 2006 brokers, Vicorus SA, on behalf of G & F contacted potential sellers and brokers in Bulgaria, including Papas. In the ensuing negotiations Papas was represented by its broker, Mr Nikolay Kostov. On 8 November 2006 at a meeting between Mr Kostov and G & F's executive director it was orally agreed that G & F would purchase 1000 metric tonnes for delivery in November 2006 and 2000 metric tonnes for delivery in December 2006 at a price of US $258 per metric tonne (excluding $1 per metric tonne commission to Mr Kostov).
The arbitrators stated in their award:
“1.6 On the basis of this Agreement Vicorus issued a Contract Confirmation dated 9 November 2006 with a Contract Reference of VCH-81116–61206.”
The arbitrators further found:
“5.3 On the basis of the evidence before us WE FIND THAT the Contract was entered into on the following material terms:
SELLER Papas Olio JSC of Sofia Bulgaria
BUYER Grains and Fourrages SA of Geneva Switzerland
COMMODITY Bulgarian Black Sunflower seeds suitable for extraction crop 2008
QUANTITY/DELIVERY
1000 MT 5% more or less at Sellers’ option and at contract price – November 2006
2000 MT 5% more or less at Sellers’ option and at contract price – December 2006
PRICE US $258.00 per metric tonne delivered at Frontier Svilengrad (Bulgarian/Turkish border) by rail cars
GENERAL TERMS All other terms and conditions as per FOSFA 4A when not in contradiction with the above
ARBITRATION In London in accordance with the FOSFA Rules of Arbitration and Appeal
5.4 By virtue of the incorporation of the FOSFA Rules of Arbitration and Appeal the juridical seat of the Arbitration is London
5.5 Whilst the above written contract was established at US $258.00 we are satisfied that this did not include the US $1.00 payable by Sellers to the Vicorus and therefore the contract price was US $259.00”
The terms set out in paragraph 5.3 of the arbitrators award were taken verbatim from the contract confirmation, but omitted matters obviously not considered by the arbitrators to bear on the issues which they had to decide. The full document included addresses of the parties. The seller was described as “Papas Olio JSC, 23 Sitnjakovo Blvd. 1606 Sofia Bulgaria”.
Papas took no part in the arbitration. Its position in correspondence, first articulated in a letter dated 1 December 2006, had been that the negotiations had never resulted in the conclusion of the contract. The arbitrators found that this letter was a repudiatory breach and awarded G & F the sum of US $195,000, representing the difference between the contract price and the market price on the date at which Papas’ repudiation had been accepted by G & F as terminating the contract.
Procedural history
The explanation for the address shown for Papas on the contract confirmation was that this had been Papas’ address at the time of a previous contract between the same parties made in early 2005, but from post-award correspondence between Papas and FOSFA it appears that Papas moved from that address in April 2005.
The award was dated 7 September 2007. On the same day FOSFA wrote to the parties notifying them that the award was now available and reminding them of the rules about appeal. The letter to Papas was sent by mail to its previous address and also by fax. Gross J noted that there was no dispute that the faxed version of the letter was received by Papas. Papas did not alert FOSFA to the fact that its address had changed. It ignored the communication altogether.
G & F paid the fees for the award and on 12 September 2007 FOSFA posted copies to both parties. The copy for Papas was sent to its previous address, and Gross J accepted that he must conclude on the evidence before him that it was not received.
It is G & F's case that 12 September 2007 was the date on which the award was sent to the parties within the meaning of rules 6(b) and 7(a), causing the time for appeal to start to run, and that it is nothing to the point that the document was not received by Papas, although that would have been relevant to an application for an extension of time under rule 7(e). It is Papas’ case that its time for appeal did not start to run until it received a copy of the award, which was not until 16 November 2007.
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