Uttam Galva Steels Ltd v Gunvor Singapore Pte Ltd
| Jurisdiction | England & Wales |
| Judge | THE HON.,Mr. Justice Picken |
| Judgment Date | 10 May 2018 |
| Neutral Citation | [2018] EWHC 1098 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2017-000608 |
| Date | 10 May 2018 |
Neutral Citation Number: [2018] EWHC 1098 (Comm)
THE HON. Mr. Justice Picken
Case No: CL-2017-000608
IN THE HIGH COURT OF JUSTICE
BUSINESS & PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Sudhanshu Swaroop QC and Karishma Vora (instructed by Marsans) for the Claimant
David Lewis QC (instructed by Hill Dickinson LLP) for the Defendant
Hearing date: 23 April 2018
Judgment Approved
Introduction
This is the hearing of an application by Uttam Galva Steels Limited (‘Uttam’) under section 67 of the Arbitration Act 1996 in relation to what is described as “Rulings and Orders” dated 5 September 2017 (the ‘Ruling’) made by Mr Edward Album (the ‘Arbitrator’), sitting as a sole arbitrator in an arbitration between Uttam and Gunvor Singapore Pte Ltd (‘Gunvor’). Although there was also at one time a challenge under section 68 of the 1996 Act, this was not ultimately pursued at the hearing which took place before me.
Factual background
The underlying claim in the arbitration before the Arbitrator concerns Gunvor's delivery of certain quantities of nickel to Uttam and the non-payment by Uttam for that nickel amounting to some US$34,884,971.80.
The claim arises out of two contracts described as “Master Sales Contracts” entered into between Gunvor and Uttam (the ‘Master Sales Contracts’): (i) “Master Sales Contract MSC2-UGSL-GSPL-2014 dated 22 December 2014” (the ‘December 2014 Master Sales Contract’); and (ii) “Master Sales Contract MSC3-UGSL-GSPL-2015 dated 15 June 2015” (the ‘June 2015 Master Sales Contract’). The MSCs incorporated Gunvor's “General Terms and Conditions for Sale and Purchase of Base Metals” (the ‘General Terms’).
The Master Sales Contracts each contain a “Governing Law and Dispute Resolution” provision which states “As per the GT&Cs” and so which refers to the General Terms. Part XXI (“LAW AND JURISDICTION”) is in these terms:
“12.1 Each Contract and these Terms shall be governed by and construed in accordance with the laws of England and Wales.
12.2 All disputes arising out of or in connection with each Contract and/or these Terms shall be finally settled by arbitration in London under the Arbitration Regulations of the LME (the ‘Regulations’), which Regulations shall be incorporated by reference into each Contract and these Terms, by a sole arbitrator appointed in accordance with the Regulations (the ‘Arbitrator’) (the ‘Arbitration’). The final award rendered by the Arbitrator shall be subject to appeal only on questions of law and not of fact, and such appeal if any shall be submitted to the High Court of Justice in London, the UK. This Clause 12.2 shall be governed by and construed in accordance with the laws of England and Wales.”
The General Terms earlier provide, in Part I ( “GENERAL”), specifically in clause 1.2, that:
“These Terms shall supplement, apply to, and be incorporated into and be regarded as an integral part of each and every sale and purchase agreement entered into between Gunvor and each counterparty (each a ‘Contract’) (each a ‘Party’, or ‘Buyer’ or ‘Seller’ as the case may be) and collectively the ‘Parties’). In the event of any inconsistency between a Contract and these Terms, the terms of the Contract shall prevail.”
They also contain a payment provision, in Part III ( “PAYMENT: CREDIT”), which states at clause 3.1 as follows:
“The Buyer shall make full payment of the purchase price of the Cargo in immediately available funds in United States dollars (‘USD’), without discount, set-off, objection, deduction, withholding, offset, or counterclaim, and free of all security interests, charges, liens, and other encumbrances, by way of a banker's letter of credit (‘L/C’) … telegraphic transfer … at the Seller's option.”
As for the Master Sales Contracts, these each begin by recording that “Gunvor Singapore Pte Ltd (hereafter called ‘Seller’) agrees from time to time to sell to the Buyer and Buyer agrees to purchase Metal on the following terms and conditions”. Those terms and conditions include the following:
“Confirmation: During the Contract Period, the Buyer and Seller will mutually agree on the details of each delivery of Product to be made. This will be documented in the form of a Confirmation in the format of Appendix II and will form part of this Master Sales Contract. Each Confirmation will stipulate details such as Product, Quantity, Terms and Time of Delivery, Price, Pricing Date, and any other relevant details pertaining to that Delivery.”
They also include this provision concerning payment:
“Payment: Unless sold as a Trade Credit under this Master Sales Contract, the Provisional Invoiced Amount without set off or deduction is payable in US Dollars to the Proceeds Account against first presentation of the Delivery Documentation by the Seller or its nominees (such data to be referred to as the ‘Delivery Date’). The Buyer shall ensure that its remitting bank shall, no later than three (3) Business Days prior to the due date of such payment and any payment under this Master Sales Contract, send a SWIFT message to the Seller's bank, stating the value of the funds to be paid and the date on which such funds will be valued.”
This provision is immediately followed by wording (entitled “Delivery Documentation”) which states as follows:
“Faxed or scanned copies of the following documents:
(a) Provisional Invoice with a payment amount equal to the Provisional Price multiplied by the Quantity;
(b) Title documents (including original Bills of Lading covering the Product, Weight and quality documents, a Packing List, a Certificate of Origin (if stated to be a requirement in the Confirmation); and
(c) A Bill of Exchange in the form of Appendix IV.
For each Delivery, all of the above Delivery Documentation shall be sent for collection subject to URC 522 to … an authorised dealer — category 1 bank mutually agreed by the Buyer and Seller and held by such bank to the order of the Seller (or the Seller's nominee) and not released until acceptance of the relevant Bill of Exchange and Invoice.”
The Master Sales Contracts go on to provide at clause 3.4 ( “Set-off”) as follows:
“The Seller may set off a matured obligation due from the Buyer under this Master Sales Contract against any matured obligation owed by the Seller to the Buyer, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the seller may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. The Buyer shall have no right of set-off against any Provisional Invoice Amount and any Provisional Invoice Amount or any amount due pursuant to a Price Settlement Note shall be paid in cash in full on the relevant due date.”
The relevant Confirmations relied upon by Gunvor in the underlying arbitration are Confirmation No. LS1502608-NI dated 6 August 2015 and described as being “inrelation to” the December 2014 Master Sales Contract and Confirmation No. LS1503272-NI dated 20 October and described as being “in relation to” the June 2015 Master Sales Contract.
The Confirmations (like the Master Sales Contracts) are in materially identical terms, although obviously providing for different quantities of nickel and different periods of delivery. Each provided that the “Deferred Payment Term” was “90 Days from Acceptance Date” and each contained a “Payment” provision which echoed the Payment provision contained in the Master Sales Contracts themselves.
Procedural background
On 22 August 2016, Gunvor served a Notice of Arbitration. In the Points of Claim which accompanied the notice the claim was summarised in paragraph 2 as follows:
“In brief, the Claimant's claim in the arbitration is for payment that is due:
a. Under 8 bills of exchange accepted by the Respondent … of which the Claimant is the holder in due course;
b. Alternatively and only in respect of any amounts, if any, for which the Claimant is for any reason not entitled to an award for payment by reason of being the holder of the said bills of exchange, under the sale contracts, called Confirmations, entered into by the Parties… .”
In short, the primary claim was under the bills of exchange (the ‘Bills of Exchange’) rather than under the Confirmations (or Master Sales Contracts).
The Points of Claim went on to refer to the terms of the Master Sales Contracts (including those to which I have referred) as well as the General Terms and, more specifically, the fact that the General Terms contain a London arbitration clause. There was then reference to the two Confirmations which I have described, followed by details of the quantities of nickel delivered by Gunvor to Uttam pursuant to those Confirmations (and, so it was pleaded, “the respective Master Sales Contracts”). Then, this was pleaded under the heading “The Bills of Exchange”:
“15. Pursuant to the deferred payment provisions in the Confirmations, the Claimant drew on the Respondent and the Respondent accepted bills of exchange in respect of each of the above deliveries (hereinafter ‘the Bills of Exchange’) … The Claimant is the holder in due course (alternatively the holder for value, alternatively the holder) of the Bills of Exchange.
16. The Respondent has failed to honour the Bills of Exchange, at their maturity and to date.”
Under a sub-heading stating “The Claimant's claim under the Bills of Exchange”, paragraph 17 then went on to allege that Uttam “is indebted to the claimant under the bills of exchange” in amounts totalling US$34,884,971.80. There then followed a further sub-heading stating “The Claimant's alternative...
To continue reading
Request your trial
-
ZCCM Investments Holdings Plc v Kansanshi Holdings Plc
...Court, 12 June 1998), The Smaro [1999] 1 Lloyd's Rep 225, Brake v Patley Wood Farm LLP [2014] EWHC 4192 (Ch) and Uttam Galva Steels Limited v Guvnor Singapore Pte Limited [2018] EWHC 1098 [2018] 2 Lloyd's Rep. 36 It submits that the hallmark is whether a ruling is a final determination o......
-
T v W
...Fiona Trust & Holding Corporation & others v Privalov & others [2007] UKHL 40 and Uttam Galva Steels Ltd v Gunvor Singapore Pte Ltd [2018] 2 Lloyds Rep 152. She held that if there was any conflict as to the significance to be placed on any presumption, she was bound by the decision in CA 10......
-
T v W
...Court in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38 and Uttam Galva Steels Ltd v Gunvor Singapore Pte Ltd [2018] EWHC 1098 and of the Singapore High Court in Piallo GmbH v Yafriro International Pte Ltd [2014] 1 SLR 7. Counsel for the Plaintiff rightly pointed out ......
-
Briggs Marine Contractors Limited Against Bakkafrost Scotland Limited
...the four cases upon which counsel placed particular reliance. The first is Uttam Galva Steels Ltd v Gunvor Singapore Pte Ltd [2018] EWHC 1098 (Comm), where the argument was whether claims arising out of bills of exchange fell within the scope of an arbitration clause in the original sales c......