The dispute arose out of the contract for the sale of 7,000 mt of Ukrainian milling wheat on a CIF Marmara delivery basis. While the seller was loading the vessel at the Ukrainian port of Kherson, the buyer’s surveyor took the samples of the goods and determined that their quality was not contractual. Given these problems with the cargo, the client refused to make payment against the certificate of the seller’s surveyor showing full compliance with the quality specification. In response, the seller terminated the contract because the buyer refused to pay for the goods.
After the seller commenced arbitration, the buyer revealed that the date of the bill of lading was inconsistent with the daily reports from its surveyor on the progress of loading. The seller’s solicitors, however, denied the argument on the backdated bill of lading and tendered the agent’s statement of facts showing the contractual shipment date. They further argued that, in any event, it was too late for the buyer to raise this matter in arbitration almost a year after the dispute arose.
In the end, the arbitrators upheld our position on the ground that the date of the bill of lading indeed contradicted the circumstantial evidence presented in the case. The tribunal considered such evidence sufficient to find that the bill of lading was not genuine and the seller wrongfully demanded payment for the cargo. It also noted that the buyer had the right to raise objections to the documents already in arbitration as they contained hidden defects which were not apparent on their face at the time of tender.
On this basis, the tribunal awarded the Turkish buyer USD about 300,000 in damages together with the compensation of the arbitration costs.