AGA Partners successfully represented a large agri trader from Lithuania in a dispute with a Swiss trading company in London arbitration. The dispute arose under USD1,2 million contract for the supply of Ukrainian sunflower meal.
This was a typical FOB (“Free on Board”) contract, whereby our Client had to present a vessel to one of the Black Sea ports of Ukraine within certain dates, to be further loaded with the sunflower meal delivered by the Respondent.
However, the Respondent refused to deliver the goods to the port, referring to national quarantine in Ukraine due to COVID-19 as a force-majeure event. Disagreeing with Respondent’s position and suffering losses, our Client nonetheless presented the vessel to the Ukrainian Black Sea Port, calling for the execution of the contract.
The situation became even more complicated by the fact that the Respondent accused our Client of so-called ‘phantom nomination’ alleging that the vessel nominated by our Client was actually intended for execution of a different contract, and not the one concluded with the Respondent.
Partner Iryna Moroz commented on this situation:
“Both force majeure and ‘phantom nomination’ of a vessel can justify the non-performance of a contract by a counterparty as a matter of English law.
However, our team of lawyers has managed to provide the arbitral tribunal with all the necessary evidence proving that national quarantine in Ukraine was not a force-majeure event under English Law, entitling the Respondent to refuse to perform the contract. Our team also proved that our Client properly presented a vessel under the Contract and fulfilled its part of contractual obligations.”
After several months of proceedings, the arbitral tribunal fully satisfied our Client’s claim covering a total of about USD200,000 of default damages plus interest, arbitration fees and expenses as well as legal costs.
AGA Partners successfully represented a Swiss trading company (Seller) in a dispute with a Turkish manufacturing and trading company (Buyer) in London arbitration, that arose out of a contract on sale of chickpeas on CIF FO delivery terms for a total value of more than USD1 million.
The dispute concerned the inspection procedure, designed to determine final quality of the goods. In particular, under terms of the sale contract the final quality was to be determined based on an inspection of the goods on loading on board of the vessel. Instead, the Buyer declined to take delivery and terminated the contract based on unsatisfactory results of an informal quality inspection, performed prior to commencement of loading procedures.
AGA Partners managed to prove that an informal quality inspection, allowed to be performed by the Buyer, and/or its results did in no way circumvent finality of quality inspection of the goods, envisaged in the contract. The Buyer’s termination of the contract was found to be premature, and, therefore, unlawful. The Seller was awarded damages in an approximate amount of USD350,000.
It is also notable, in the course of the proceedings the Buyer raised a challenge against the arbitrator, appointed by the arbitration authority instead of the Buyers, on grounds of an alleged lack of neutrality. In particular, the Buyer took position, that the arbitrator lacked neutrality given that he possessed the same nationality, as the legal representatives of the Seller. However, this challenge was dismissed as AGA Partners did establish that arbitrator’s neutrality could not be affected by his nationality in circumstances, where there were no other grounds to challenge his impartiality and/or independence.
“The successful outcome of this case demonstrates that where the contract is clear as to the parties’ contractual obligations, they may not be undermined by an uncertain correspondence between the parties. This is especially relevant with regard to quality clauses, possessing a fundamental nature, as they are aimed specifically to achieve finality as to the quality of the goods and at avoidance of respective disputes.”
The AGA Partners team was led by partners Iryna Moroz and Ivan Kasynyuk with support from senior associates Ievgen Boiarskyi and Iurii Gulevatyi, as well as from associates Yelyzaveta Holovan, Viktoria Tolochko and Pavel Lebedev.
Our practice of dispute resolution and international arbitration is recognized by international rating agencies. The list of cases won by us on behalf of our clients and the high appraisal given by world's leading companies confirm the perfect quality of our services in the field of international trade and agribusiness.
We understand the specific needs of each client and provide tailored solutions to any problem. The exclusivity of the client is the basis of our work, so we handle only those issues that we are professionals in.
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