Per Aspera ad Astra: Aga partners successfully represented the client in London arbitrations

Per Aspera Ad Astra: AGA Partners successfully represented the client’s interests in two instances of London arbitration.

The dispute concerned the buyer's wrongful refusal to accept a large consignment of sunflower seeds worth USD 2 million. The buyer justified his refusal by the presence of poisonous ambrosia seeds in the cargo. The Client had no choice but to terminate the contract with the buyer, resell the goods on the market, and claim the difference between the contract and resale prices, as well as the demurrage costs.

Upon the consideration of the case in the first instance, the award was rendered entirely in favor of the AGA Partners’ Client - the London arbitral tribunal held that the refusal of the goods was unlawful and the Client was entitled to compensation for the damages suffered.

Nevertheless, the opposite side challenged the award of the first instance and filed an appeal to the London arbitration. Buyers argued that as the maximum permissible levels for ambrosia were set by EU directives, exceeding such levels was a sufficient reason for refusal of the goods. At the same time, the seller’s position was that 1) the contract did not provide for the application of EU directives, and 2) EU directives relate only to the sunflower seeds intended for animal feed. In this case, however, the seller supplied sunflower seeds for oil production. Sunflower processing during oil production eliminates any negative effect the ambrosia may have, therefore EU directives do not set any maximum permissible ambrosia levels for sunflower seeds used in oil production.

The appeal instanсe agreed with the AGA Partners’ arguments and found that the buyer's refusal of the goods was unlawful, therefore the seller had every right to compensation for all the losses incurred. The arbitrators not only confirmed the award of the first instance but also additionally satisfied our claim for vessel demurrage compensation, arbitration and legal costs. Therefore, the appeal satisfied all the claims AGA Partners raised on behalf of the Client during the consideration of the case.

This bright victory became possible due to the painstaking work of partners Iryna Moroz and Ivan Kasynyuk, senior associate Dmitry Koval and associate Pavel Lebediev. The well-coordinated work of the team let AGA Partners not only to safeguard the success of the first instance but to surpass it with even more favorable award for the Client in the appellate instance.