Toyota Tsusho Sugar Trading Ltd v Prolat S.R.L
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cooke |
| Judgment Date | 07 November 2014 |
| Neutral Citation | [2014] EWHC 3649 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2014 FOLIO 804 |
| Date | 07 November 2014 |
[2014] EWHC 3649 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Cooke
Case No: 2014 FOLIO 804
Mr Brian Dye (instructed by Hill Dickinson LLP) for the Claimant
The defendant was neither present nor represented
Hearing date: 3rd November 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice Cooke Mr Justice Cooke The application
This is an application made by the claimant (Toyota) under section 32 of the Arbitration Act 1996 seeking the court's determination of questions relating to the substantive jurisdiction of an Arbitration Tribunal appointed by the Refined Sugar Association. The application is made with the permission of the Tribunal, Messrs Van Grutten, Grimsey and Koch on the basis that the determination of these questions by the court is likely to produce substantial savings in costs, that the application was made without delay and there is good reason for these matters to be determined by the court, as opposed to the Tribunal.
I find that the requirements of section 32(2)(b) and section 32(3) of the 1996 Act are met because, as the Arbitration Tribunal itself said in a ruling of 2nd May 2014 at paragraphs 3–14 (the ruling in which it gave permission to apply to the court) there are factual issues to be resolved in determining the jurisdiction dispute and an appeal might well follow a Tribunal decision on the matter. The determination of the court is therefore likely to produce substantial savings in costs. The application has been made without delay and the involvement of the court in Naples presents an additional good reason why this court should decide the issues.
The matter came before the court in circumstances where, I am satisfied, the defendants had received full notice of the proceedings but chose not to participate. A Memorandum of Exchanges between Toyota's solicitors and the defendant (Prolat) and its Italian lawyers reflects the care taken by Toyota to ensure that Prolat has been served with all the applications and relevant material documents in this action. The matter therefore proceeded before me in the absence of Prolat or any legal representatives appearing for it.
The evidence before me consisted of witness statements from Mr Rubino, Mr Adamovic, Mr Dërmaku and two witness statements from Mr Vincenzini, who also appeared in court to give oral evidence to confirm correct and add to what he had said in those statements and to answer any questions which might arise.
There were two bundles of documents in evidence before the court in addition, which showed the chronological sequence of exchanges between the parties at the time when the alleged contract and addenda were being negotiated.
I have also considered with care Prolat's claim form (Writ of Summons) dated 13th January 2013 in the Italian court in Naples in which Prolat maintained that Mr Enrico Dibranco was not their representative or agent but the appointed broker for Toyota. It is said that Mr Dibranco had offered to assist Prolat in importing sugar to be bought from Toyota and that he identified onward purchasers for the resale by Prolat. Prolat maintained that Mr Dibranco had reached an understanding with Toyota for the import of 8000 MT of sugar initially, had applied for an import licence and a bank guarantee on behalf of Prolat and had charged commission, as had two other individuals for the procuring of that guarantee which was purportedly issued by Banca Nazionale del Lavoro SpA (BNL).
The quantity of sugar was increased to 10,000 MT approximately with a reduction in the unit price. Prolat's case is that it left the organisation of the shipping import and other documentation to Mr Dibranco and that it did not receive contractual documentation from Toyota or Mr Dibranco until 22nd October 2013, after importation had taken place. As will appear, that contention is unsustainable in the light of the evidence put before this court.
Prolat in its claim form in Naples referred to the onward sale of part of the imported sugar to various buyers, including quantities of about 344 metric tonnes to companies associated with Mr Dibranco or his family. Prolat then referred in its claim form to Toyota's discovery that the BNL guarantee was forged and maintained that Mr Dibranco was Toyota's agent and not Prolat's. It admitted that it had only paid €100,000 to Toyota but stated that Toyota had successfully regained possession of the imported sugar which had not been sold by that stage as the result of an agreement on 15th November 2013. According to Prolat, 54% of the sugar cargoes remained at the import terminal and had been repossessed but only a further €319,500 was owing to Toyota in respect of the sugar which had been on sold, a figure which was paid on 29th or 30th November 2013.
Claims are made by Prolat in paragraph 39 of its claim form in Naples for damages for various alleged wrongdoing by the claimants, whether for breach of contract or tort. At paragraph 40 Prolat sets out its contentions as to the jurisdiction of the Italian courts to determine the dispute as to monies owing and its case as to the application of Italian law.
What is clear from the claim form in its totality and from paragraph 40(4) in particular is that Prolat recognises the existence of a contract for the sale of sugar between itself and Toyota which has now come to an end. In summary, Prolat claimed that Toyota was liable in contract and in tort for:
i) Inducing Prolat to make an arrangement for a sugar trade that was outside its ordinary course of business;
ii) Taking advantage of Prolat in applying erroneous US$/€ exchange rates;
iii) Shipping the sugar prematurely;
iv) Relying on terms of a contract that had not been negotiated nor signed;
v) Diverting a huge quantity of sugar;
vi) Taking advantage of an agreement signed on 15th November 2013 between the parties' respective lawyers for the freezing of a quantity of sugar (the unsold portion);
vii) Exposing Prolat to the claim of Enrico Dibranco for his fees;
viii) Claiming €100,000 in costs and fees;
ix) Ruining Prolat's reputation with BNL.
Toyota has objected to the jurisdiction of the Italian court on the basis of the arbitration clause upon which it relies in the contract and addenda which, in its contention, govern the position between the parties. The Italian court has not yet determined this issue.
Prolat has objected to the jurisdiction of the Tribunal in submissions sent by its Italian lawyers, Studio Legale de Marco Della Rocca dated 11th March 2014. In those submissions Prolat contend that:
i) No sale and purchase agreement was ever signed by Prolat;
ii) No arbitration agreement was ever signed by Prolat;
iii) There is no evidence of the conclusion of any agreement to arbitrate;
iv) There is no evidence that Mr Dibranco acted for Prolat;
v) Mr Dibranco acted as proxy for Toyota;
vi) Toyota, having obtained, by agreement, a form of saisie conservatoire relief against Prolat in Naples, is obliged to pursue substantive proceedings there.
Toyota's case in arbitration is set out in the written Amended Statement of Case submitted to the Tribunal, which appears at bundle A1/82–89. In essence Toyota seeks payment of the purchase price for 4,867.794 MT of sugar delivered to Prolat and on sold by it, plus damages in respect of 5,134.206 MT "returned" by Prolat, constituted by the difference between the contract price and the prices obtainable on resale by Toyota, plus additional expenses incurred as a consequence of Prolat's repudiation of the contract.
It appears therefore to be common ground between Toyota and Prolat that there was a contract for the sale and purchase of approximately 10,000 MT of sugar. The issue is whether or not there was a concluded agreement to arbitrate. In order to determine that the court must first determine what the terms were of any contract that was made and the proper law of that contract.
The jurisdiction of the Court
The subject matter of the application to this Court is the existence or otherwise of an agreement to arbitrate. In consequence, although Prolat has commenced proceedings in Italy in which it contends that it is not party to any arbitration agreement, Regulation 44/2001 does not apply to prevent this Court considering the issue because of the paragraph 7 of the preamble and Regulation 1(2)(d) in the light of existing authority. I was referred to the decisions of the European Court in case 190/89 – Marc Rich & Co AG v Società Italiana Impianti PA [1991] ECR 1–03855 and case 185/07 – Allianz SpA v West Tankers Inc [2009] ECR 1–00663 and the opinion of the Advocate General in that case. I was also referred to the decision of Mr Justice Flaux in West Tankers v Allianz (No. 3) [2012] EWHC 854. This Court is not being asked to interfere with the functions of the Italian court as no form of anti-suit injunction is being sought against Prolat. This Court is being asked to determine whether or not there is an arbitration agreement and to make a declaration in the light of its conclusion.
Although Regulation 121/2012 is not yet in force and does not come into force until 10th January 2015, its effect would be no different from Regulation 44/2011. Article 1(2)(d) remains unchanged from the earlier Regulation but is more fully explained in paragraph 12 of the Preamble. I was also referred to Article 73 which states that the Regulation will not affect the application of the New York Convention. Although it is not yet in force, it was suggested that some might regard the new...
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