Kastrup Trae-Aluvinduet A/S v Aluwood Concepts Ltd

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice John MacMenamin
• Judgment Date: 13 November 2009
• Neutral Citation: [2009] IEHC 577
• Date: 13 November 2009
• Docket Number: [No. 169 MCA/2009]

[2009] IEHC 577

THE HIGH COURT

[No. 169 MCA/2009]

Kastrup Trae-Aluvinduet A/S v Aluwood Concepts Ltd

IN THE MATTER OF THE ARBITRATION ACTS 1954 - 1998

AND IN THE MATTER OF THE NEW YORK CONVENTION ON THE

RECOGNITION AND ENFORCEMENT OF ARBITRAL AWARDS 1958

AND SECTION 7 OF THE ARBITRATION ACT 1980

AND IN THE MATTER OF AN ARBITRATION

BETWEEN

KASTRUP TRAE-ALUVINDUET A/S

APPLICANT

AND

ALUWOOD CONCEPTS LTD.

RESPONDENT

ARBITRATION ACT 1980 S7

ARBITRATION ACT 1954 S41

NEWYORK CONVENTION ON THE RECOGNITION & ENFORCEMENT OF FOREIGN ARBITRAL AWARDS 1958

ARBITRATION ACT 1980 S6(1)

ARBITRATION ACT 1980 S9

CREMER (PETER) GMBH v CO-OP MOLASSES TRADERS LTD 1985 ILRM 564

SWEENEY v MULCAHY 1993 ILRM 289

HOLFELD PLASTICS LTD v ISAP OMV SPA UNREP GEOGHEGAN 19.3.1999 2000/20/7660 1999 IEHC 224

STRYKER CORP v SULZER METCO AG UNREP O'NEILL 7.3.2006 2006/55/11619 2006 IEHC 60

LUGANO CONVENTION ART 17

CREDIT SUISSE FINANCIAL PRODUCTS v SOCIETE GENERALE D'ENTERPRISE 1997 ILPT 165 CA

BROSTROM TANKERS v FACTORAIS VULCANO SA 2004 2 IR 191

EUROFOOD IFSC LTD, IN RE 2004 4 IR 370

MINMETALS GERMANY GMBH v FERCO STEEL LTD 1999 AER COMM 315 COLMAN

ARBITRATION

Award

Foreign award - Enforcement - Whether award made pursuant to arbitration agreement - Grounds upon which court might refuse to enforce award - Whether binding arbitration agreement in place between parties - Whether award made in pursuance of arbitration agreement - Whether arbitration clause incorporated into contract - Cremer (Peter) GMBH v Co-Operative Molasses Traders Ltd [1985] ILRM 564; Sweeney v Mulcahy [1993] ILRM 289; Holfeld Plastics Ltd v ISAP Omv Group Spa (Unrep, HC, Geoghegan J, 19/3/1999); Stryker Corporation v Sulzer Metco AG [2006] IEHC 60, (Unrep, HC, O'Neill J, 7/3/2006); Credit Suisse Financial Products v Societe Generale d'Enterprises [1997] ILPT 165 CA and Minmetals Germany Gmbh v Ferco Steel Ltd [1999] All ER (Comm) 315 considered - Brostrom Tankers v Factorias Vulcano SA [2004] IEHC 198, [2004] 2 IR 191 and Re Eurofood IFSC Ltd [2004] IEHC 54, [2004] IESC 45, [2004] 4 IR 370 distinguished - Arbitration Act 1980 (No 7), ss 6, 7 and 9 - Arbitration Act 1954 (No 26), s 41 - Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 - Relief granted (2009/169MCA - MacMenamin J - 13/11/2009) [2009] IEHC 577

Kastrup Trae-Aluvinduet A/S v Aluwood Concepts Ltd

Facts The applicant sought an order pursuant to s. 7 of the Arbitration Act, 1980 and s. 41 of the Arbitration Act, 1954 enforcing the award of the Danish Arbitration Board for the Construction Industry dated 21 April 2009, in this State in the same manner as if the said award was a judgment or order of this Honourable Court to identical effect. The applicant also sought judgment in the sum of DKK904,063.93 together with legal and other costs and further sought interest on the principal sum from 2 December 2008. The arbitration proceedings were commenced due to outstanding invoices issued by the application to the respondent. The parties had a contractual relationship that operated on the basis of individual contracts for individual jobs and the applicant submitted that all of those contracts were governed by a set of 'Common Terms and Conditions of Sale.' The respondent herein alleged that it was not on notice of any such terms and conditions from the commencement of the trading relationship. The respondent had been notified of the applicant's reference of the claim to arbitration and the respondent raised issues regarding the conduct of the arbitration in Denmark and the supply of documents in Danish. The respondent was afforded four extensions of time within which to submit a statement of response but the respondent ultimately decided not to take any part in those proceedings. On the evening prior to the arbitration hearing it was submitted on behalf of the respondent that the Danish Arbitration Board did not have jurisdiction to deal with the dispute. The respondent argues herein that there was no award made pursuant to an arbitration agreement. It was submitted that there was never any binding arbitration agreement in place between the parties and therefore the award was not made in pursuance of an arbitration agreement. The respondent claimed that the applicant never drew the respondent's attention to the existence of the contents of the 'Common Terms and Conditions' that contained the arbitration clause.

Held by MacMenamin J. in favour of the applicant: That the respondent was aware of the Common Terms and Conditions and the respondent's alleged failure to be notified of those terms was not raised in any correspondence with the applicant. The applicant was not obliged to furnish a copy of those terms and conditions to the respondent. On the plain face of the correspondence the common terms were incorporated into the contract. The respondent was not in the position of an ordinary consumer but was involved in a trading relationship and its objection to the application of those terms and conditions was made very late in the day. Furthermore, as a matter of law the respondent must be taken to have been on notice of the conditions. Consequently, the award was enforceable as a matter of Irish law. There was no evidence of unfair proceedings in the arbitration process. The respondent simply chose not to participate in the proceedings.

Reporter: L.O'S.

JUDGEMENT of

Mr. Justice John MacMenamin

1 dated the 13th day of November, 2009.

2 1. In this application the applicant ("Kastrup") seeks:

3 (i) An order pursuant to s. 7 of the Arbitration Act1980 and s. 41 of the Arbitration Act 1954 enforcing the award of the Danish Arbitration Board for the Construction Industry dated 21^st April, 2009, in this State in the same manner as if the said award was a judgment or order of this Honourable Court to identical effect;

4 (ii) Judgment in the sum of DKK904,063.93, together with DKK48,837.98 for legal costs, DKK44,308 for costs related to the arbitration tribunal in conducting proceedings, and DKK10,731.24 for costs of translation;

5 (iii) Interest on the principal sum of DKK759,249.27 from the 2^nd December, 2008, was at the rate of 1.8% per month or part thereof, to the date of payment.

6 2. The applicant is a limited company registered in Denmark. The respondent carries on the business of supplying Scandinavian window and door products having its registered office in Co. Waterford. Prior to the matters in suit the applicant and the respondent had an ongoing business relationship. The applicant supplied the respondent with Scandinavian doors and windows. These were transported to Ireland and used in developments by the respondent. This relationship operated on the basis of individual contracts between the parties for individual jobs being undertaken by the respondent. The plaintiff says all of these individual contracts were governed by a set of "Common Terms and Conditions of Sale".

7 3. The said terms and conditions of sale contained at paragraph 11, a "Disputes" section which reads as follows:

"Submissions of question concerning the delivery for the opinion of experts appointed by the court must follow the rules of the General Conditions of 1992 for Works and Supplies in the Building and Construction Industry ("Almindelige Betingelser for Arbejde og Leverancer i. Bygge-og Anaegsvirksomhed 1992 )(AB 92) (S. 45).

8 Disputes between parties falling under AB 92, s. 22, subs. 14 shall be settled in accordance with AB 92, s. 46.

9 Disputes shall reach a final settlement at the Danish Court of Arbitration for the Building and Construction Industry, cf. the general conditions for works and supplies in the building and construction industry of 1992 (AB 92) 0, s. 47."

10 4. The manner of alleged incorporation of this term into the contractual relationship is outlined later in this judgment. The business between the plaintiff and the defendant initiated in 2006 continued over a period of several years. It was substantial, amounting to hundreds of thousands of euro per annum. In 2008 disputes as to payment arose between the applicant and the respondent company. On 15^th August, 2008, Danish solicitors acting for the applicant wrote to the respondent outlining the level of unpaid invoices which were owing at that time and requesting payment. These invoices totalled DKK945,372.06.

11 5. Aluwood had previously purported to raise a number of complaints of alleged defects in the product supplied by the applicant. By this the respondents sought to justify a refusal to pay for the goods in full. On 9^th July 2008, Aluwood objected that the account furnished by Kastrup did not take into account a number of "contracharges". Kastrup wrote saying "we will have a look at your list and relate to which of your charges according to your terms and conditions of sale". The applicant's solicitor noted these matters in correspondence, but went on to indicate that if a payment of the outstanding balance was not received within ten days of the receipt of a letter of final demand the applicant would initiate legal proceedings pursuant to "article 11 of the applicant's common terms and conditions of sale".

12 6. The respondent did not reply to that letter. Specifically, Aluwood raised no question at that regarding any reference to the common conditions of sale. The applicant's solicitors initiated arbitration proceedings in Denmark.

13 7. While Aluwood contends that it was not on notice of any such terms and conditions from the commencement of the trading relationship, I find this is not so. In fact, in a letter of 18^th August, 2006, which commenced the commercial relationship, Kastrup indicated that the basis of such business relationship would inter alia be in accordance with "1. common sales and delivery conditions of VI (VI: The organisation...