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.