AGA Partners is pleased to announce a successful outcome in a London-seated arbitration, where the firm represented one of Moldova’s leading agricultural trading companies (the Buyers) in a dispute against a Swiss agricultural trader (the Sellers). 

The dispute arose out of an FOB contract for the supply of Ukrainian corn. In accordance with the contract, the Buyers duly nominated a vessel within the contractual delivery period and tendered a valid Notice of Readiness. Despite this, the Sellers refused to load the cargo. 

In an attempt to justify their non-performance, the Sellers advanced several arguments, including that no binding contract had been concluded, that the vessel nomination was defective, and that their obligation to perform was conditional upon the Buyers settling alleged outstanding commitments under unrelated contracts. 

AGA Partners successfully demonstrated that a valid and binding contract had been concluded based on the parties’ correspondence, including email/messenger communications, reflecting an established course of dealings where formal signatures were not required. The firm further proved that the Buyers had properly nominated the vessel and that the Sellers had, in fact, accepted such nomination in the course of сommunication and the Tribunal found so.   

Importantly, the Tribunal rejected the Sellers’ argument that performance under the contract depended on payments under separate agreements, reaffirming the principle of English law that each contract is legally independent. There were exceptional circumstances showing the contracts to be interdependent. To this end, the Tribunal also upheld the Buyers’ claims in full, finding that the Sellers committed a repudiatory breach by refusing to load the cargo. The Buyers were awarded damages based on the difference between the contract and market price, along with compensation for demurrage and arbitration costs. 

This case underscores key aspects of commodities disputes, including the recognition of contracts concluded through messenger communications, the strict approach to unjustified non-performance under FOB contracts, and the limited scope of cross-contractual defences under English law. 

The AGA Partners team was led by Iryna Moroz, Partner, supported by Maksym Fesenko, Associate, and Dmytro Izotov, a former Senior Associate of the firm