Facts
Erdenet, a Mongolian mining company, agreed to sell copper concentrates to MRI, a Swiss trading company. They settled a dispute referred to London Metal Exchange arbitration by agreeing to enter into three new supply contracts in agreed forms. The parties performed both 2009 contracts. Erdenet refused to deliver under the third contract, for the supply of copper concentrates in 2010. The arbitrators held that Erdenet’s delivery obligation was unenforceable because the contract left material terms to future agreement. MRI appealed on questions of law under section 69 of the Arbitration Act 1996.
Issue
Was the 2010 supply contract enforceable even though it left treatment and refining charges and the shipping schedule to future agreement?
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Decision
The Commercial Court held that the 2010 contract had to be read in the context of the settlement and the related contracts. Their wording showed that the parties intended the 2010 contract to bind them. The outstanding charges and schedule could be determined on a reasonable basis, and the arbitration clause provided a way to resolve disputes over those terms.
The court set aside the award. Erdenet was obliged to deliver under the 2010 contract and, if the parties could not agree the outstanding terms, reasonable charges and a reasonable shipping schedule applied.
Source: Full judgment
