High Court Rules on International Dispute Over Organic Food Supply Agreements

High Court Rules on International Dispute Over Organic Food Supply Agreements

TLDR:

• The High Court ruled on jurisdictional challenges and default judgment in a dispute between Tradin Organic Agriculture BV and Gold Grain Gida Tarim Ürünleri Sanayi ve Ticaret Anonim Sirketi.
• The case involved complex agreements governed by different jurisdictions and laws.
• The court dismissed Gold Grain's application to set aside default judgment.

On 24 June 2024, the High Court delivered a significant ruling in the case of Tradin Organic Agriculture BV vs Gold Grain Gida Tarim Ürünleri Sanayi ve Ticaret Anonim Sirketi, addressing jurisdictional challenges and default judgment in an international dispute over organic food supply agreements.

Gold Grain, a Turkish company, entered into a series of agreements with Tradin, a Dutch company, for the supply of organic foods. Disputes arose between the parties in 2021, leading to a pre-action disclosure application by Gold Grain in the Netherlands, granted in November 2022.

In December 2022, Tradin's solicitors wrote to Gold Grain's lawyers in the Dutch litigation, sending a letter of claim and inquiring about accepting service of a claim in England and Wales. Gold Grain disputed the claim and England and Wales' jurisdiction.

Tradin issued proceedings in England on 30 December 2022, claiming just over £1 million. Gold Grain responded with proceedings in the Netherlands in February 2023, claiming nearly £50 million. The claim form in England was served in Turkey on 2 May 2023, but Gold Grain did not file an acknowledgment of service or a defense.

Tradin applied for default judgment on 15 September 2023, which was ordered on 16 November 2023. Gold Grain applied to set aside the default judgment on 14 December 2023, arguing defective service, a real prospect of success in challenging jurisdiction, and Tradin's failure to provide full and frank disclosure.

The agreements between the parties included a five-year exclusive supplier agreement (ESA) governed by English law, loan agreements governed by English law, and purchase agreements with a Dutch choice of law clause. The loan agreements contained an asymmetric jurisdiction clause favoring English courts.

Gold Grain argued that the claim should be stayed on forum non conveniens grounds due to parallel proceedings in the Netherlands. They also contended that the loan agreements were part of interrelated transactions and that the sums due depended on the delivery and quality of goods.

Tradin countered that Gold Grain had submitted to the jurisdiction of English courts by applying to set aside default judgment under CPR 13. They argued that the jurisdiction clause was clear and that the English claim was independent of the Dutch proceedings.

The High Court dismissed Gold Grain's application, ruling that service was valid despite the jumbled order of pages in the particulars of claim. The court found no real prospect of success in the jurisdiction challenge and determined that Gold Grain had not acted promptly or provided a good reason for the delay.

Furthermore, the court concluded that Tradin had not failed to provide full and frank disclosure in their application for default judgment. The judgment emphasized the importance of engaging with litigation and the consequences of failing to respond to claims.

Legal representatives: Simon Gilson (instructed by Macfarlanes LLP) for the Claimant, Rumen Cholakov (instructed by Gibson & Co Solicitors Ltd) for the Defendant.

Judicial Panel: Master Sullivan

Case Citation Reference: [2024] EWHC 1562 (KB)