Toepfer (Alfred C.) International G.m.b.H. v Société Cargill France
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STAUGHTON,LORD JUSTICE PHILLIPS |
| Judgment Date | 25 November 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J1125-10 |
| Docket Number | QBCMF 97/0178/B |
| Court | Court of Appeal (Civil Division) |
| Date | 25 November 1997 |
[1997] EWCA Civ J1125-10
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
COMMERCIAL COURT
MR JUSTICE COLMAN
Royal Courts of Justice
The Strand
London WC2
Lord Justice Staughton
Lord Justice Phillips
Lord Justice Robert Walker
QBCMF 97/0178/B
MR S MORRIS (Instructed by Messrs Middleton Potts, London EC1A 7LD) appeared on behalf of the Respondent
MR S PHILLIPS (Instructed by Brian Perrott Esq. Cargill PLC, Surrey KT11 2PD) appeared on behalf of the Appellant
Tuesday 25th November, 1997
For the reasons that have been handed down this appeal will be referred to the European Court.
This is the Judgment of the Court.
In January 1994 Cargill entered into three contracts for the purchase from Toepfer of a total of 9500 tonnes of soybean meal pellets, CIF Montoir, in France. Pursuant to these contracts pellets were carried to Montoir aboard the GULF WAVE, which arrived at Montoir on the 7th February. A dispute then arose between Cargill and Toepfer as to whether the pellets complied with the contract. It is common ground that each contract included a clause that required the dispute to be resolved by a GAFTA arbitration, to the exclusion of any other tribunal. This clause should have ensured that the dispute was resolved cheaply and expeditiously by an expert tribunal. The parties have, however, become embroiled in a procedural dispute which raises complex issues as to the interpretation of the Brussels Convention 1968 and which must already have involved legal costs far in excess of the amount at stake in the substantive dispute. Nor will this appeal resolve these issues. They are of general importance and the solution to them is far from clear. Accordingly we have resolved that it is appropriate to refer them for the ruling of the European Court of Justice, pursuant to Schedule 2 to the Civil Jurisdiction and Judgments Act 1982. The object of this judgment is to put in context the questions referred.
History of the proceedings
On the 8th February, Cargill became concerned about the condition of the cargo and gave notice of those concerns to Toepfer. Toepfer responded the following day, contending that the contracts, which were on the terms of GAFTA Form 100 and contained the so-called "standing in" clause, provided for the sampling and analysis procedure, which should be followed. Instead of following this procedure, Cargill made an application to the Tribunal de Commerce de St. Nazaire ("the French Court") under an urgent interlocutory procedure known as "en reféré" for the appointment of a court expert to ascertain the relevant facts. The French Court made the order sought the following day. Mr Harang, the appointed expert asked Toepfer to produce certificates of analysis at the loadport. Toepfer declined to do so on the ground that under the contractual provisions these were irrelevant. Cargill's response, on the 11th February, was to make a further application "en reféré" for the production of these certificates. On this day discharge was completed. Cargill rejected the major part of the cargo and called for arbitration, stating that the appointment of their arbitrator would follow.
On the 17th February Cargill nominated Mr Scott as their Arbitrator.
On the 22nd February the French Court heard and dismissed objections made by Toepfer to the two orders made "en reféré". At this stage Cargill had given no indication that they did not intend that the substantive dispute should be resolved by arbitration. Their case was that the "en reféré" orders were justified in order to obtain evidence for the purpose of the arbitration.
On the 1st March Toepfer appointed Mr Sears as their arbitrator in the arbitration.
On the 14th September Toepfer appealed to the Cour d'Appel de Rennes against the two orders made "en reféré". Their appeal was dismissed on the 19th October.
On the 7th February 1995 Cargill issued proceedings in the French Court making a substantive claim for damages against Toepfer. At the same time, however, they gave notice renewing the arbitration—under the GAFTA rules this has to be done every 12 months, failing which the arbitration lapses unless the arbitrators, in their discretion, otherwise order.
On the 20th February Toepfer referred to GAFTA arbitration a claim for damages on the ground that Cargill had acted in breach of contract in commencing court proceedings in disregard of the arbitration clause. They nominated Mr Scott as their arbitrator. On the 11th April Cargill nominated Mr Sears as their arbitrator in respect of this claim.
On the 5th April 1996 Cargill purported to renew the arbitration once again. Toepfer took the point that they were out of time and contended that their claim for arbitration was deemed withdrawn.
On the 17th June 1996 the expert appointed by the French court delivered his report to the Court.
On the 19th June Toepfer submitted, pursuant to Section 1458 of the New Code of Civil Procedure, an objection to the jurisdiction of the French Court in respect of the substantive proceedings, invoking the exclusive GAFTA jurisdiction clause and seeking an order that the French Court declare itself incompetent and refer the proceedings to arbitration. At the same time Toepfer gave Cargill notice that if they did not desist from the French proceedings, Toepfer would apply to the High Court in London for an injunction restraining the French proceedings.
In the absence of response from Cargill, Toepfer initiated the present proceedings by originating summons on the 16th September 1996. On the 16th October the French Court ordered that Toepfer's objection to the jurisdiction of the French Court should be heard on the 11th December, but that hearing was subsequently adjourned, pending the result of these proceedings.
The Relief Sought
The relief sought in the present proceedings was as follows:
1. A declaration that the claims made by the Defendant against the Plaintiff in proceedings commenced by writ dated 7th February 1995 in the Tribunal de Commerce de Saint-Nazaire in France (The French Proceedings") are disputes within the scope of disputes agreed by the Plaintiff and the Defendant to be referred to arbitration, in accordance with Arbitration Rules No.125 of the Grain and Feed Trade Association ("GAFTA 125") under clause 32(a) of Form 100 of GAFTA ("GAFTA 100") incorporated into and forming part of three contracts each made between the plaintiff as seller and the defendant as buyer and dated 17th, 18th and 20th January 1994 for the sale of 7,000, 1,000 and 1,500 metric tonnes respectively of soyabean meal pellets.
2. A declaration that the Defendant is entitled and obliged to refer the disputes referred to in 1. above to arbitration under the rules of GAFTA 125 in accordance with clause 32(a) of GAFTA 100.
3. A declaration that the commencement by the defendant on or around 7th February 1995 of the French Proceedings constituted, and the continuation of the said proceedings by the First Defendant will constitute:
(a) a breach of the agreements made between the plaintiff and the defendant under clause 32(a) of GAFTA 100 as incorporated into the Contracts, to refer to arbitration all disputes arising out of or under the Contracts.
(b) a breach of the agreements made between the plaintiff and the defendants under clause 32 of GAFTA 100 as incorporated into the Contracts, providing for exclusive jurisdiction of the Courts of England or arbitrators in England over all disputes arising under the Contracts.
4. An injunction restraining the Defendant whether by itself its servants or agents or howsoever otherwise from:
(a) continuing or prosecuting or taking any further steps in or assisting in the continuation, prosecution or taking of further steps in or otherwise further participating in the French Proceedings;
(b) commencing any further or other proceedings in any court wheresoever situated, otherwise than by arbitration in London under GAFTA 125, against the plaintiff in respect of all or any claims made in the French Proceedings and any other dispute arising out of or under the Contracts.
5. An injunction requiring the defendants by itself its servants or agents or howsoever otherwise to discontinue, or take all steps necessary to effect a discontinuation of the French Proceedings.
On the 20th December 1996 Colman J. granted the relief sought. Cargill then appealed to this court against his order.
The jurisdiction provisions in the contracts
The contracts were subject to the following provisions of GAFTA Form 100:
31. DOMICILE—Buyers and Sellers agree that for the purpose of proceedings either legal or by arbitration this contract shall be deemed to have been made in England and to be performed there any correspondence in reference to the offer, the acceptance, the place of payment or otherwise notwithstanding and the Court of England or arbitrators appointed in England, as the case may be, shall, except for the purpose of enforcing any award made in pursuance of the arbitration clause hereof, have exclusive jurisdiction over all disputes which may arise under this contract. Such disputes shall be settled according to the law of England, whatever the domicile, residence or place of business of the parties to this contract may be or become.
32 Arbitration—
(a) Any dispute arising out of or under the contract shall be settled by arbitration in accordance with the Arbitration Rules No. 125 of The Grain and Feed Trade Association in the edition current at the date of this contract, such Rules...
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