The High Court has stayed court proceedings brought by McCormack Fuels Limited against Maxol Limited, directing the dispute to arbitration under the parties’ agreement. The order concerned where the dispute should be heard; the court did not decide whether Maxol breached the agreement or committed fraud or encouraged price fixing.
The dispute arose from an authorised distributor agreement dated 18 August 2004, which included an arbitration clause. The parties had discussed petrol rebates and commission rates. McCormack Fuels alleged that Maxol failed to conduct the agreed review of commissions and that this amounted to a fundamental breach. It also alleged that Maxol had no intention of conducting a meaningful review and had encouraged it to engage in price fixing. Maxol’s representatives denied the price-fixing allegations.
The court considered whether the fraud allegations and claimed public interest in price fixing justified allowing the court proceedings to continue under section 39(2) of the Arbitration Act 1954. It accepted that price fixing could breach competition law and, in an appropriate case, raise a special public interest issue. But it said there was no evidence before it that Maxol or McCormack Fuels’ competitors had engaged in price fixing. The alleged approaches in 1999, 2002 and 2003 predated the 2004 agreement; the court said it was difficult to see how those earlier events showed Maxol’s intentions under that agreement. An alleged discussion at a meeting in Sligo on 8 April 2005 could bear on the issue, but the court considered it suitable for an arbitrator to determine.
Justice Dunne was not satisfied that the issues were so complex or substantial that they could not properly be handled in arbitration. She also considered the price-fixing allegation peripheral to the parties’ main dispute about rebate review, and found no special public interest reason to keep the case in open court. The court granted Maxol’s application under section 5(1) of the Arbitration Act 1980 to stay the proceedings pending arbitration. The judgment did not determine the underlying contractual or fraud claims.