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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Rusant Ltd v Traxys Far East Ltd  EWHC 4083 (Comm) (28 June 2013)
Cite as:  EWHC 4083 (Comm)
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Royal Courts of Justice
London WC2A 2LL
B e f o r e :
| RUSANT LIMITED
|TRAXYS FAR EAST LIMITED
165 Fleet Street, 8th Floor, London, EC4A 2DY
Tel No: 020 7421 4046 Fax No: 020 7422 6134
Web: www.merrillcorp.com/mls Email: firstname.lastname@example.org
(Official Shorthand Writers to the Court)
MR MARK HUBBARD (instructed by Messrs Marriott Harrison LLP) appeared on behalf of the Defendant
Crown Copyright ©
MR JUSTICE WARREN:
"5.2 Any dispute, controversy or claim arising in connection with or relating to this agreement, including its interpretation, execution and effect or the breach, termination or invalidity hereof should be referred to and finally resolved by arbitration of a single arbitrator.
5.3 The place of arbitration is to be in London."
"This agreement constitutes the entire understanding of the parties and supersedes all oral or written representations or agreements, privileges or understandings between the parties. If any provision of this agreement is held by the arbitrator to be contrary to law, such provision shall be changed."
"Any change, amendment and/or addition to this agreement shall have no effect and shall be regarded as null and void unless done in writing and signed by both parties."
"Mr Doctor [who was a director, indeed the president, of the respondent] assured me, at a meeting in New York on 4 April 2013, that the loans had been extended to 'July or some such date' and that the lawyers had taken care of the documentation and that I should not worry about it. I have had absolutely no doubt about that. On behalf of the applicant I was pleasantly content with that arrangement and on the basis of the amendment to the repayment date I had made no effort to procure the applicant's repayment of the loans in August 2012 and subsequently in the light of the many assurances I had received."
"In fact, to the contrary, the board organised its financial affairs on the basis that the loans would not mature until July 2013 (or 'some such date') at the very earliest. I saw no need to chase up the documentation extending the repayment period of the loans, particularly since the original time for payment of the loans had long passed and no demand had been made for their repayment."
The Law: Arbitration.
"A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter."
"Section 9 deals with the stay of legal proceedings, the relevant parts have already been set out in these judgments. I refer to the first paragraph of this judgment to show how the charterers qualify to apply for a stay of legal proceedings under Section 9(1). Once the Court is satisfied that they are so qualified, ie that there is such a dispute, then under Section 9(4):
"'The Court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed.'.
"This arbitration agreement is none of those things."
No Offer or Acceptance.
"Accordingly, following the view of the majority in Ward v. Byham, BAILII:  EWCA Civ 1 and of the whole court in Williams v. Williams,  EWCA Civ 1506 and that of the Privy Council in Pao On, BAILII:  UKPC 17 the present state of the law on this subject can be expressed in the following proposition:
(i) if A has entered into a contract with B to do work for, or to supply goods or services to, B in return for payment by B; and
(ii) at some stage before A has completely performed his obligations under the contract B has reason to doubt whether A will, or will be able to, complete his side of the bargain; and
(iii) B thereupon promises A an additional payment in return for A's promise to perform his contractual obligations on time; and
(iv) as a result of giving his promise, B obtains in practice a benefit, or obviates a disbenefit; and
(v) B's promise is not given as a result of economic duress or fraud on the part of A; then
(vi) the benefit to B is capable of being consideration for B's promise, so that the promise will be legally binding"
"Mr Nugee submitted that although Glidewell LJ in terms confined his remarks to a case where B is to do work for or supply goods or services to A, the same principle must apply where B's obligation is to pay A and he referred to an article by Adams and Brownsword, "Contract, Consideration and the Critical path" (1990) 53 MLR 536, 539-540 which suggests that Foakes v Beer, 9 AppCas 605 might need reconsideration. I see the force of the argument, but the difficulty that I feel with it is that, if the principle of Williams v Roffey Bros & Nicholls (Contractors) Ltd  1 QB 1 is to be extended to an obligation to make payment, it would in effect leave the principle in Foakes v Beer without any application. When a creditor and a debtor who are at arm's length reach agreement on the payment of the debt by instalments to accommodate the debtor, the creditor will no doubt always see a practical benefit to himself in doing so. In the absence of authority there would be much to be said for the enforceability of such a contract. But that was a matter expressly considered in Foakes v Beer yet held not to constitute good consideration in law. Foakes v Beer was not even referred to in Williams v Foffey Bros & Nicholls (Contractors) Ltd and it is in my judgment impossible, consistently with the doctrine of precedent, for this court to extend the principle of Williams's case to any circumstances governed by the principle of Foakes v Beer. If that extension is to be made, it must be by the House of Lords or, perhaps even more appropriately by Parliament after consideration by the Law Commission.
In my judgment the judge was right to hold that if there was an agreement between the company and the revenue it was unenforceable for want of consideration."