Xstrata Coal Queensland Pty Ltd (Company Number 098156702) now known as Rolleston Coal Holding Pty Ltd and formerly known as Glencore Coal Queensland Pty Ltd v Benxi Iron & Steel (Group) International Economic & Trading Company Ltd
Jurisdiction | England & Wales |
Judge | Mr Justice Butcher |
Judgment Date | 21 January 2020 |
Neutral Citation | [2020] EWHC 324 (Comm) |
Date | 21 January 2020 |
Docket Number | Ref. CL-2016-000796 |
Court | Queen's Bench Division (Commercial Court) |
Mr Justice Butcher
Ref. CL-2016-000796
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF
ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Rolls Buildings
Fetter Lane
Mr D Lewis QC appeared on behalf of the Claimants
Mr A Gunning QC appeared on behalf of the Respondent
TRANSCRIPT OF PROCEEDINGS
(AS APPROVED)
This is an application by the Claimants under section 68 of the Arbitration Act 1996, for remission to the arbitrator, of an arbitration award made by Mr Gerald Aksen, to whom I will refer as the Arbitrator, dated 23 August 2010, which was given under the rules of the LCIA, and/or for remission of a decision of the Arbitrator given pursuant to Article 27.1 of those rules. There is also before me a separate application to re-re-amend the claim form, which I will deal with at the end of this judgment. The case is a somewhat unusual one, in that this is a section 68 challenge brought by an award creditor.
Background facts
The underlying dispute arose out of an agreement by the Defendant to buy a substantial quantity of coking coal. There were four sellers, undoubtedly including the first three Claimants. The problem which has arisen relates to the identity of the Fourth Seller. The agreement between the Defendant as buyer and Sellers, was known as the Oaky Contract. It was executed by the Defendant and the First Claimant on 4 September 2008. The Oaky Contract contained a provision for arbitration under LCIA rules in the event of a dispute, and stipulated that the contract, including the arbitration clause, was to be governed by and construed in accordance with the substantive law of England and Wales.
The most important contractual provisions and their significance were summarised by Knowles J in paragraphs six to eight of a judgment of his (the significance of which I will explain in due course), as follows — and this is a quote from Knowles J's judgment:
“6. The Oaky Contract is signed “for and on behalf of the Seller” by Xstrata Coal Queensland Pty Limited (“XCQ”, the first named Claimant in these proceedings before the Commercial Court).
7. The Oaky Contract uses these words to describe “the Seller”:
“SELLER: Xstrata Coal Queensland Pty Limited (ABN 69098156702) as agent for the Oaky Creek Joint Venturers (being Sumisho Coal Australia Pty Limited, Xstrata Coal Queensland Pty Ltd, Itochu Coal Resources Australia Pty Limited and ICRA NCA Pty Limited) and [sic] Level 38, Gateway, 1 Macquarie Place, Sydney, N.S.W. 2000, Australia (as the Seller)”.
8. It is therefore the fact that the words used in the Oaky Contract are “ICRA NCA Pty Limited” and not “ICRA OC Pty Limited”. There is evidence that there do exist two companies, one by each name.
9. However the description of the Seller in the Oaky Contract also refers to “the Oaky Creek Joint Venturers”. By a separate agreement dated 31 December 1997 and restated as at 1 March 2005, and named the Oaky Creek Joint Venture Agreement, four companies agreed and confirmed that they had by that agreement “associat[ed] themselves in an unincorporated joint venture, known as the “Oaky Creek Joint Venture”, for the purpose of conducting” defined operations for the exploration and prospecting for, and mining and loading of, coal.
10. The fourth of the four companies so agreeing by the Oaky Creek Joint Venture Agreement was ICRA OC Pty Limited, not ICRA NCA Pty Limited (the company named as an Oaky Creek Joint Venturer under the Oaky Contract).”
A dispute arose under the Oaky Contract on 8 April 2009. The First Claimant only filed a request for arbitration against the Defendant. The Defendant in its statement of defence and counterclaim of 21 September 2009, took the point that the First Claimant had no title to sue other than in respect of its own interest in the Oaky Creek Joint Venture, being a disclosed agent of known principals. On 13 April 2010, the First Claimant applied to join the Second to Fourth Claimants as co-claimants, with their consent. On 17 April 2010, the Arbitrator granted the joinder of the Second to Fourth Claimants. An evidentiary hearing took place between 17 and 19 May 2010, at which the Defendant was represented by Leading and Junior Counsel, and by King and Wood, People's Republic of China Lawyers.
The Award
The resulting Award, which is dated 30 September 2010, contained the following significant paragraphs:
“1. The claimants are Xstrata Coal Queensland Pty Limited (“XCQ” or “Xstrata”), Itochu Coal Resources Australia Pty Ltd (“Itochu”), ICRA OC Pty Limited (“ICRA”) and Sumisho Coal Australia Pty Limited (“Sumisho”) (collectively, the “Claimants”). The Claimants are companies incorporated in Australia. XCQ's registered address is at Level 38, 1 Macquarie Place, Sydney, NSW 2000 Australia.”
“7. The dispute arises under the “Contract for Sale and Purchase of Coking Coal”, numbered OCP/BEN/HCC-08/01/01, which is dated 15 August 2008 and was executed by Ben Steel and XCQ on 4 September 2008 (“Oaky Contract”). XCQ signed as the Seller as agent for the Oaky Creek Joint Venturers (being itself Itochu, ICRA and Sumisho).”
And paragraph 109, which was to this effect:
“The Oaky Contract defines the “Seller” XCQ “as agent for the Oaky Creek Joint Venturers”, which jointly comprise all four individual claimants. The Tribunal determines, in accordance with the Oaky Contract, that Claimants seek an award in favour of all the Claimants jointly.”
The operative part of the Award was in these terms:
“The arbitral tribunal renders its Final Award as follows:
(i) Within thirty (30) days of the date of this Award, Respondent Benxi Iron & Steel (Group) International Economic and Trading Co. Limited, shall pay to Claimants Xstrata Coal Queensland Pty Limited, Itochu Coal Resources Australia Pty Ltd, ICRA OC Pty Limited and Sumisho Coal Australia Pty Limited, jointly, the amount of United States Dollars Twenty Seven Million Eight Hundred Forty-Six Thousand (US$27,846,000), with simple interest thereon at the rate of one and one-half per cent (1.5%) from 1 January 2009 until date of payment.”
As Knowles J said at paragraph 16 of his judgment, from these paragraphs of the Award it is clear that the Arbitral Tribunal treated ICRA OC Pty Ltd, and not ICRA NCA Pty Ltd: a) as a party to the Oaky Contract (including the agreement to arbitration); b) as one of the Oaky Creek Joint Venturers; c) as a party to the claim before the Arbitral Tribunal; and d) as a beneficiary of the Award.
Attempted enforcement of the Award
The Defendant did not pay under the Award. The Claimants applied on 16 August 2011, for the recognition and enforcement of the Award in the People's Republic of China under the New York Convention. The Defendant is incorporated in China and conducts business there. The Claimants' application was made to the Shenyang Intermediate Peoples' Court. The Defendant resisted recognition and enforcement. In doing so it focused, at what was described as an informal hearing before the Shenyang court on 18 July 2013, on the point that the Oaky Contract used the words “ICRA NCA Pty Ltd”.
The Defendant made, amongst others, the following submissions:
“The parties subject to the arbitration clause were Bensteel and four Companies, including NCA; however the Arbitral Award was rendered to Bensteel and different Companies, three of which were the same while the fourth one turned out to be OC, but not NCA. There is no explanation about the change of the company in the Award; therefore we believe that there was a critical flaw in the arbitral process. We was shown this evidence today that NCA stated it didn't sign the contract, while in fact the contract parties included NCA since Article 1 of the contract demonstrated that the contract was signed between the Joint Venture consisted of four companies and Bensteel. If this evidence is authentic then we highly doubt the effectiveness of the contract itself. Not only has the evidence itself failed to support the Claimants' allegation, it furthered deepen our concerns and questions about the parties to contract. The correction of the parties to the contract and the arbitration clause, under the circumstances that the Award has been rendered, should not be made by the Court which determines whether or not to recognized and enforce the Award, but should be made by the Arbitral Tribunal in advance. It is not proper that the Claimants intend to correct such material mistake through the procedure of enforcement.”
And further
“OC is a distinct company, rather than the party to the contract or the arbitration...
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