Black Sea Commodities Ltd v Lemarc Agromond Pte Ltd [2021] EWHC 287 (Comm) (15 February 2021)

Black Sea Commodities Ltd v Lemarc Agromond Pte Ltd [2021] EWHC 287 (Comm) (15 February 2021)

No binding arbitration agreement was concluded between the parties, either expressly or by implication, as the GAFTA arbitration clause was not agreed on 9 March nor in subsequent exchanges, and insufficient evidence was provided to establish a trade custom for its incorporation. The arbitrators lacked jurisdiction under s 67 Arbitration Act 1996.

Citation
[2021] EWHC 287 (Comm)
Parties
Claimant: Black Sea Commodities Ltd; Defendant: Lemarc Agromond Pte Ltd
Jurisdiction
England and Wales
Judgment Date
15 February 2021
Procedural Posture
Section 67 Arbitration Act 1996 Challenge / Judgment on Application to Set Aside Arbitration Award
Outcome
Claimant's s 67 application succeeds; arbitration award set aside.
Legal Topics
Arbitration Agreement Formation, Implied Terms by Trade Custom, Separability of Arbitration Clause, Jurisdiction of Arbitral Tribunal
Arbitration Commercial Law Arbitration Agreement Formation Implied Terms by Trade Custom Separability of Arbitration Clause Jurisdiction of Arbitral Tribunal

Case Brief

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Parties

Black Sea Commodities Ltd

Claimant

Lemarc Agromond Pte Ltd

Defendant

Procedural Posture

Section 67 Arbitration Act 1996 Challenge / Judgment on Application to Set Aside Arbitration Award

Legal Issues

  1. 1 Whether a binding arbitration agreement existed between the parties
  2. 2 Whether a GAFTA arbitration clause was incorporated by custom or usage
  3. 3 Whether the arbitrators had jurisdiction under s 67 Arbitration Act 1996

Ratio Decidendi

No binding arbitration agreement was concluded between the parties, either expressly or by implication, as the GAFTA arbitration clause was not agreed on 9 March nor in subsequent exchanges, and insufficient evidence was provided to establish a trade custom for its incorporation. The arbitrators lacked jurisdiction under s 67 Arbitration Act 1996.

Court Disposition

Claimant's s 67 application succeeds; arbitration award set aside.

Orders

  • Arbitration award dated 14 April 2020 set aside for lack of jurisdiction.
  • Defendant's amended case based on implied term by trade custom rejected.