Peter Cremer Gmbh & Co. v. Co-Operative Molasses Traders Ltd

Factual and Procedural Background

Company A, incorporated in a foreign jurisdiction, agreed in August 1983 to sell approximately 6,000–7,000 metric tonnes of molasses to Company B, a cooperative registered in The City. That transaction was completed without dispute and contained an arbitration clause calling for disputes to be resolved under the rules of the Grain and Feed Trade Association (GAFTA) in The City.

In October 1983 the parties negotiated, by telex, letters, and telephone, a second contract for 10,000 tonnes of molasses to be delivered in March/April 1984. The first telex stated that “all other conditions” were as per the August contract, thereby incorporating the earlier GAFTA arbitration clause. A subsequent letter erroneously referred to arbitration “amicably in The City,” but Company B did not sign or return that duplicate contract.

When Company B later attempted to alter the quantity and price, Company A insisted on performance. On 24 January 1984 Company B repudiated the existence of any contract. Company A commenced GAFTA arbitration in The City; Company B declined to participate. On 22 June 1984 the tribunal found that a contract existed, that Company B had breached it, and awarded damages and interest.

Company A sought enforcement of the award in the High Court, which granted an order on 25 February 1985. Company B appealed to the Supreme Court.

Legal Issues Presented

1. Whether the October 1983 communications created a binding contract between Company A and Company B, including an agreement to arbitrate disputes.
2. If a contract existed, whether its arbitration clause required GAFTA arbitration in The City or “amicable” arbitration in another city.
3. Whether the arbitral tribunal exceeded its jurisdiction or was improperly constituted, permitting refusal of enforcement under Sections 9(2)(d), 9(2)(e), or 9(2)(f) of the Arbitration Act 1980.
4. Whether the High Court correctly enforced the foreign arbitral award under Part III of the Arbitration Act 1980.

Arguments of the Parties

Appellant's Arguments (Company B)

• No binding contract existed; therefore there was no arbitration agreement and the tribunal lacked jurisdiction.
• Alternatively, any contract required arbitration “amicably” in The City, not under GAFTA rules; enforcement should thus be refused under Section 9(2)(e).
• Enforcement could also be resisted under Sections 9(2)(d) and 9(2)(f) because the award dealt with matters beyond any valid submission or was not yet binding.

Respondent's Arguments (Company A)

• The October 1983 telex incorporated the August 1983 GAFTA arbitration clause, forming a binding contract.
• The GAFTA tribunal therefore had jurisdiction, correctly found Company B in breach, and properly quantified damages.
• The High Court’s order enforcing the award complied with Part III of the Arbitration Act 1980 and should be upheld.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court, per Judge Finlay, first examined whether the existence of a contract could be raised as a defence under Sections 9(2)(d) or 9(2)(f). The Court held that these provisions presuppose an undisputed submission to arbitration; if no arbitration agreement existed, those defences would not apply. Likewise, Section 9(2)(f) concerns awards that have not yet become binding, not awards alleged to be nullities.

Because enforcement can proceed only in respect of an “award” within Section 6(1), the Court assessed de novo whether the arbitral decision qualified. It concluded that the documentary record—especially the 21 October 1983 telex incorporating “all other conditions” of the August contract—demonstrated a binding agreement that included GAFTA arbitration in The City. The later reference to arbitration “amicably in The City” was treated as a clerical error that did not alter the parties’ true consensus.

The Court reasoned that Company B itself had initially requested the shift from an earlier proposal of arbitration in a different city to GAFTA arbitration in The City, undermining its present contention. Accordingly, the tribunal had jurisdiction; the award was made pursuant to a valid arbitration agreement; and none of the statutory grounds for refusal under Section 9 were satisfied.

Holding and Implications

Appeal dismissed; High Court order enforcing the GAFTA arbitral award affirmed.

Company A may enforce the award for principal, interest, fees, and continuing interest at 11 % per annum until payment. The ruling reinforces that Irish courts will not entertain objections to enforcement based on an alleged absence of contract when the documentary evidence establishes a written arbitration agreement, and it clarifies the limited scope of the refusal grounds in Section 9 of the Arbitration Act 1980. No new precedent was set beyond the immediate parties.