The High Court has refused Vertom Shipping and Trading BV’s application to stay a shipping dispute and refer it to arbitration, finding that no arbitration agreement had been concluded between the parties.
The Lisheen Mine partnership brought proceedings seeking declarations that it had not contracted with Vertom and Mullock and Sons (Shipbrokers) Limited for cargo transport from Cork to Antwerp and Stettin. It also sought damages for breach of contract. Vertom argued that agreements covering the routes included an arbitration clause in a standard Gencon charter-party.
The judgment, delivered by Mr Justice Cregan on 12 January 2015, concerned Vertom’s application under the Arbitration Act 2010 and the UNCITRAL Model Law. The judge said the court had to decide whether an arbitration agreement existed before ordering a stay. He applied full judicial consideration and said Vertom also failed to establish an agreement even on the alternative prima facie test.
The tender process contemplated two linked arrangements: a framework agreement between the Lisheen Mine and the successful tenderer, and charter-party agreements involving Lisheen Milling Limited and the vessel owners. The draft charter-party named Lisheen Milling as charterer and included an arbitration clause, but it was not signed. Vertom’s December offer was subject to agreeing charter-party details and owners’ approval. Subsequent emails showed negotiations were continuing, with further terms to be reviewed and draft charter-parties still to be prepared.
When an early January shipment was needed, the parties exchanged vessel nominations. The Mine rejected the nominated vessels, and Vertom later asserted that it had a signed contract and that a vessel had been booked. The Mine said it had not accepted the nomination. The judge treated these operational exchanges as insufficient to establish a contract.
He concluded that neither a framework agreement nor a charter-party agreement had been concluded. He also found that the draft charter-party’s arbitration clause could not be incorporated into the alleged framework agreement, which involved different contracting parties and contained no express arbitration clause. The court refused Vertom’s application to stay the proceedings and refer the dispute to arbitration. The judgment did not decide the underlying claims for declarations or damages, or whether the Mine could have rescinded a contract; the judge said that issue did not arise once he found no contract had been concluded.