CR Sugar Trading Ltd v China National Sugar & Alcohol Group Corporation [2003] EWHC 79 (Comm) (31 January 2003)

CR Sugar Trading Ltd v China National Sugar & Alcohol Group Corporation [2003] EWHC 79 (Comm) (31 January 2003)

The contracts were unenforceable as they constituted investment business under the Financial Services Act 1986, neither party 'used' the commodity in their business, and there was no intention to deliver for commercial purposes at the relevant time. The tribunal's findings on intention and use were correct. Relief under Section 5(3) was not available in these circumstances.

Citation
[2003] EWHC 79 (Comm)
Parties
Appellant/claimant: CR Sugar Trading Limited (In Administration); Respondent/defendant: China National Sugar & Alcohol Group Corporation
Jurisdiction
England and Wales
Judgment Date
31 January 2003
Procedural Posture
Commercial Court Appeal Under Arbitration Act 1996 / Judgment on Appeal From Arbitration Award
Outcome
Appeal dismissed; application under section 68 allowed by consent; application notice under section 5 struck out.
Legal Topics
Enforceability of Contracts Under Financial Services Act 1986, Definition of Investment Business, Interpretation of Commercial Vs Investment Purpose, Jurisdiction of Arbitrators Under Financial Services Act, Section 5(3) Discretion
Arbitration Financial Regulation Commercial Law Enforceability of Contracts Under Financial Services Act 1986 Definition of Investment Business Interpretation of Commercial Vs Investment Purpose Jurisdiction of Arbitrators Under Financial Services Act Section 5(3) Discretion

Case Brief

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Parties

CR Sugar Trading Limited (In Administration)

Appellant/claimant

China National Sugar & Alcohol Group Corporation

Respondent/defendant

Procedural Posture

Commercial Court Appeal Under Arbitration Act 1996 / Judgment on Appeal From Arbitration Award

Legal Issues

  1. 1 Whether the contracts were unenforceable as 'investment business' under the Financial Services Act 1986 due to lack of authorisation
  2. 2 Whether the parties 'used' the commodity in their business within the meaning of the Act
  3. 3 Whether there was an intention to deliver the commodity for commercial purposes

Ratio Decidendi

The contracts were unenforceable as they constituted investment business under the Financial Services Act 1986, neither party 'used' the commodity in their business, and there was no intention to deliver for commercial purposes at the relevant time. The tribunal's findings on intention and use were correct. Relief under Section 5(3) was not available in these circumstances.

Court Disposition

Appeal dismissed; application under section 68 allowed by consent; application notice under section 5 struck out.

Orders

  • Appeal against arbitration award dismissed
  • Section 68 application allowed by consent (quantum adjustment)