Summary
The claimant, Toyota, sought the court’s determination on whether there was a valid arbitration agreement.
The application was made with the permission of the arbitral tribunal under the English Arbitration Act 1996. The English High Court exercised its jurisdiction under the 1996 Act, and held that the claimant was entitled to such a declaration. In this context, the court inter alia determined which law governs the contract. Mr Justice Cooke held:
“18 Article 10.1 of the Rome 1 Regulation 583 of 2008 provides that the existence and validity of a contract is to be determined by the law that would govern the contract if the contract were valid. In my judgment, any contract for the sale of sugar between Toyota and Prolat in the circumstances to which the evidence refers, could only be governed English law.
i) The Contract and Addenda 1 and 2, upon which Toyota rely, each contain a clause that provides that they shall be governed by and construed in accordance with the provisions of English law. In the Contract of 22nd July 2013, clause 23 expressly so provides and clause 24 incorporates the rules of the Refined Sugar Association of London. Clauses 23 and 24 of Addendum 1 dated 16th August 2013 follow the same form, as do clauses 24 and 25 of Addendum 2 dated 31st August 2013. Addendum 3 leaves all other terms and conditions of the Contract and previous amendments in full force and effect, save as specifically changed by it.
ii) There was therefore an express choice of law in the putative contract alleged by Toyota within the meaning of Article 3(1) of the Rome 1 Regulations .
iii) Article 4(1)(a) provides that, to the extent that the law applicable to the contract has not been chosen in accordance with Article 3 , the contract for the sale of goods shall be governed by the law of the country where the seller has his habitual place of residence.
iv) Article 4.3 provides that where it is clear from all the circumstances of the case that the contract is manifestly more closely connected with another country, however, the law of that other country is to apply. There is no such manifestly closer connection with another country in the present case. Whilst Prolat is resident in Italy and the shipments came into Italy, Toyota is an English company and the shipments came from the USA, Algeria and Montenegro. Toyota, as sellers, operated from England and sent out emails and documents from there including contract documentation in the English language and, as hereafter appears, repeatedly referred to English law and arbitration.
v) Furthermore, although Article 10.2 allows for the possibility of applying a different law in circumstances where a party contends he did not consent to the contract, that only applies where it would not be reasonable to determine the effect of that party's conduct in accordance with the law which otherwise governs. For reasons which will appear hereafter, that is not the position here.
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44 Since the evidence shows that Mr Dibranco agreed the terms of the Contract, Addendum 1, Addendum 2 and Addendum 3, each of those documents, though not signed on behalf of Prolat, binds Prolat.
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46 The Contract itself, Addendum 1 and Addendum 2 specifically referred to the governing law as English law, to the RSA arbitration clause and to the RSA rules as part of the terms and conditions of the Contract. Addendum 3 reinforced these terms, including its specific reference to the arbitration clause.” [18, 44 and 46]