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Novasen SA v Alimenta SA

HHJ Mackie QC, sitting as a judge of the Commercial Court, has recently considered the effect of the doctrine of separability of arbitration clauses, in s. 7 of the Arbitration Act 1996, in a case where one party acted as agent to an undisclosed principal. The case involved a FOSFA contract for the sale of groundnut oil. The judge held, amongst other things, that since commodity contracts of this sort contained provisions for FOSFA arbitration, there was an arbitration agreement in existence even if the agent acting for one of the parties was said not to have had authority to conclude a sale contract on behalf of its undisclosed principal. Questions such as whether differences relating to price and place of payment in the contracts between seller and agent, and agent and buyer,  meant that the agent had no authority to conclude the sale contract were therefore questions for the FOSFA arbitrators.

Lawrence Akka appeared for the Defendant