PEC Ltd v Asia Golden Rice Company Ltd
2014
COMMERCIAL COURT
United Kingdom
CORAM
- MR JUSTICE ANDREW SMITH
Areas of Law
- Contract Law
- Civil Procedure
- Arbitration Law
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
The case centered on whether PEC Limited entered into a binding Purchase Agreement and arbitration agreement with Asia Golden Rice Company Limited. PEC denied the authority of their representatives to enforce such agreements, while AGR contended otherwise. The court ruled in favor of PEC, determining that the representatives lacked both actual and apparent authority, and thus no valid arbitration agreement was in place.
Judgment
Mr Justice Andrew Smith:
This is an application under section 67 of the Arbitration Act 1996, the central issue being whether the claimants, PEC Limited (“PEC”), entered into an arbitration agreement in relation to a contract to buy rice. Asia Golden Rice Company Limited (“AGR”) contend (i) that on 15 May 2008 a Mr Pawan Jain of Pawan Jain & Sons (“PJS”) made an oral agreement committing PEC to buy 25,000 mt of rice from them and that the contract included an arbitration agreement, and (ii) the contract was confirmed by a written agreement dated 16 May 2008 that provided for arbitration “London as per GAFTA 125” and that was signed by a Mr Ravi Kumar, then Chief General Manager (“CGM”) at PEC, and sent by email to AGR by Mr Jain. PEC’s case is that neither Mr Jain nor Mr Kumar had authority to enter into the contract to buy the rice (the “Purchase Agreement”), and therefore they deny that they are party to any arbitration agreement.
The question whether the parties concluded an arbitration agreement is distinct from the question whether they concluded the Purchase Agreement: see Lord Hoffmann in Fiona Trust & Holding Corp and ors v Privalov and ors , [2007] UKHL 40 at para 17. But AGR do not argue that PEC and AGR concluded a discrete arbitration agreement if neither Mr Jain nor Mr Kumar had PEC’s (actual or apparent) authority to make the Purchase Agreement (and so no Purchase Agreement was made by PEC): they considered that this argument was precluded by an order of Hamblen J made on 12 October 2012 that the jurisdiction question be decided “by reference to all the issues relating to the conclusion and terms of the alleged contract”, and so they accepted that “the questions whether there was a binding matrix contract and whether there was an arbitration agreement stand or fall together”. They maintain (i) that Mr Jain had apparent authority (or PJS had apparent authority: it makes no different whether the arguments are considered on the basis that Mr Jain personally or PJS had apparent authority and for convenience I shall refer simply to Mr Jain in this judgment) to conclude the oral Purchase Agreement on PEC’s behalf; (ii) that Mr Ravi Kumar had their actual authority to conclude the Purchase Agreement in writing; and (iii) that Mr Jain had apparent authority to communicate PEC’s acceptance of the written Purchase Agreement. AGR expressly conceded that they cannot present a claim on the basis that Mr Ravi Kumar had any relevant apparent a