13/12/2013

Bunge SA v Nibulon Trading BV [2013] EWHC 3936 (Comm)

Walker J has allowed an appeal and set aside an award by a GAFTA Board of Appeal which dismissed a claim by Bunge SA. The claim had succeeded on a ‘lapse of claim’ issue and on the merits before a GAFTA first-tier tribunal, but was dismissed by the Board of Appeal, without considering the merits, on the ground that it had lapsed so as to be deemed waived and absolutely barred. The essential issue on the appeal to the Commercial Court was whether Bunge SA’s claim had been admitted for determination by the first-tier tribunal in such a way that the Board of Appeal was obliged to consider it on the merits. Walker J held that the Board’s conclusion that they were not so bound, and thus their decision to dismiss Bunge SA’s claim without reference to the merits, was wrong in law. In particular, the judge held that a conditional decision by the first-tier tribunal to admit the claim as a matter of discretion was a valid decision and exercise of discretion. The judgment includes important consideration of the scope of Rule 21 of the GAFTA arbitration rules and the interplay between the respective discretions of first-tier tribunals and boards of appeal to admit claims that are time barred. The judge remitted the matter to the Board of Appeal to deal with the underlying claim on the merits.

Members of Chambers: Andrew W Baker QC and Malcolm Jarvis for the appellants (instructed by Reed Smith LLP).