Transition Feeds LLP v Itochu Europe Plc [2013] EWHC 3629 (Comm) (15 November 2013)

Transition Feeds LLP v Itochu Europe Plc [2013] EWHC 3629 (Comm) (15 November 2013)

The arbitral Board failed to deal with two distinct issues: (1) the Buyers' entitlement to a price allowance under clause 2 of FOSFA 80 if the goods had arrived at Liverpool and were not of good merchantable quality, and (2) the inapplicability of Rotterdam resale prices for damages. These failures constituted serious irregularities under s.68(2)(d) causing substantial injustice. The Board also misapplied the 'costs follow the event' rule by not accounting for both the Buyers' appeal and the Sellers' cross-appeal, making the costs orders obviously wrong under s.69.

Citation
[2013] EWHC 3629 (Comm)
Parties
Claimant/buyers: Transition Feeds LLP (formerly known as Advanced Liquid Feeds LLP); Defendant/sellers: Itochu Europe plc
Jurisdiction
England and Wales
Judgment Date
15 November 2013
Procedural Posture
Arbitration Claim and Appeals Under Arbitration Act 1996 / High Court Judgment on S.68 and S.69 Applications
Outcome
Buyers' s.68(2)(d) and s.69 applications succeed; awards set aside in part and remitted to the arbitral Board.
Legal Topics
Serious Irregularity in Arbitration (s.68 Arbitration Act 1996), Appeal on Point of Law (s.69 Arbitration Act 1996), Interpretation of Contract Terms, Damages for Breach of Contract, Costs in Arbitration
Arbitration Commercial Law Sale of Goods Serious Irregularity in Arbitration (s.68 Arbitration Act 1996) Appeal on Point of Law (s.69 Arbitration Act 1996) Interpretation of Contract Terms Damages for Breach of Contract Costs in Arbitration

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Parties

Transition Feeds LLP (formerly known as Advanced Liquid Feeds LLP)

Claimant/buyers

Itochu Europe plc

Defendant/sellers

Procedural Posture

Arbitration Claim and Appeals Under Arbitration Act 1996 / High Court Judgment on S.68 and S.69 Applications

Legal Issues

  1. 1 Whether the arbitral tribunal failed to deal with all issues put to it under s.68(2)(d) Arbitration Act 1996
  2. 2 Whether the tribunal's costs orders were based on a misapplication of the 'costs follow the event' rule under s.69 Arbitration Act 1996

Ratio Decidendi

The arbitral Board failed to deal with two distinct issues: (1) the Buyers' entitlement to a price allowance under clause 2 of FOSFA 80 if the goods had arrived at Liverpool and were not of good merchantable quality, and (2) the inapplicability of Rotterdam resale prices for damages. These failures constituted serious irregularities under s.68(2)(d) causing substantial injustice. The Board also misapplied the 'costs follow the event' rule by not accounting for both the Buyers' appeal and the Sellers' cross-appeal, making the costs orders obviously wrong under s.69.

Court Disposition

Buyers' s.68(2)(d) and s.69 applications succeed; awards set aside in part and remitted to the arbitral Board.

Orders

  • The Board's Award dated 12 January 2012 is set aside insofar as it determined damages payable by the Buyers to the Sellers (including costs orders) and remitted for consideration of the two issues not dealt with.
  • Costs orders in the Chemstar Yazoo and Oak Galaxy awards are set aside and remitted to the Board to determine costs on the basis that there were two events (Buyers' appeal and Sellers' cross-appeal), not one.