AGA Partners successfully represented Swiss Sellers in a dispute against Swiss Buyers arising out of a contract for the sale of Ukrainian corn to Turkey. Following the proceedings, the Tribunalawarded the Sellers damages, interest and arbitration costs. 

The dispute arose after the Buyers failed to make the contractual prepayment. The Buyers subsequently refused to perform the transaction and challenged the very existence of a legallybinding contract between the parties. 

The Buyers argued that they had participated in the transaction solely as a financing party and had never become a contractual buyer under the sale contract. On that basis, they contendedthat no valid and binding contract had ever come into existence and that they were under no obligation to perform the transaction. The Sellers, in turn, maintained that all key commercialterms had been agreed and that the subsequent correspondence and conduct of the Buyers’ representatives clearly demonstrated the existence of a valid and enforceable contract. 

The Tribunal agreed with the Sellers. Having reviewed the negotiations, email correspondence and WhatsApp communications, it concluded that a valid sale contract had been concludedbetween the parties. 

The Tribunal also rejected the Buyers’ argument that they had acted merely as a financing participant and found that their representatives’ conduct throughout the negotiations and contractfinalisation process was consistent with their role as contractual counterparties. 

Having found that a valid contract existed between the parties, the Tribunal concluded that the Buyers’ failure to make the contractual prepayment and their subsequent refusal to perform thecontract constituted a material breach of their contractual obligations. As a result, the Tribunal upheld the Sellers’ claims and awarded damages arising from the decline in market prices, together with interest and arbitration costs. 

The case serves as a practical reminder that attempts to challenge the existence of a contract after market conditions turn unfavourable are unlikely to succeed where the parties have alreadyagreed the essential terms of the transaction and moved towards performance. It also highlights the significant evidentiary value of emails, messaging applications and post-agreementconduct in commodities disputes. 

The AGA Partners team was led by partner Ivan Kasynyuk, with support from senior associate Maksym Fesenko. A significant contribution to the matter was also made by Dmytro Izotov and Tetiana Osypenko.