In any dispute arising from a commodities sale contract, the defendant always has the opportunity to avoid paying damages or to minimise the amount thereof. Even in situations where the issue of liability appears almost hopeless, there is almost always the possibility of minimising damages by challenging the date of default and the correctness of the claim amounts calculated on the basis of market price statements of brokers. 

A good example is a recent arbitration in which the AGA Partners team represented a leading Ukrainian agricultural company in the first instance and on appeal of the London arbitration in a dispute with a Swiss soft commodities trader arising from a contract for the sale of wheat on a CIF Vietnam basis. The dispute concerned the Client’s failure to deliver the goods within the time limit specified in the contract. 

During the arbitration proceedings, AGA Partners’ lawyers convinced the arbitrators that the default date cited by the claimant was incorrect. As a result, damages were calculated based on lower market prices for the goods at other date. The AGA Partners team also succeeded in demonstrating that the amount of damages claimed by the opposing party was more than double the amount of damages actually incurred, by proving the irrelevance of the opposing party’s market price statements and presenting the arbitrators with a range of evidence of lower market prices for the goods as at the date of default. 

As a result, the amount of damages awarded to the opposing party amounted to approximately USD 1.7 million – less than half of their claimed damages of over USD 3.8 million. 

In the appeal arbitration, AGA Partners’ lawyers confirmed the correctness of this position, preventing an increase in the amount awarded to the opposing party by refuting the new evidence submitted by them. 

The team working on the project consisted of partners Ivan Kasinyuk and Iryna Moroz, former senior associate Dmitry Izotov, and associate Viktor Pasichnyk.