29/01/2013

Bunge SA v Nidera BV

Hamblen J handed down judgment on 29 January 2013 in an appeal under section 69 of the Arbitration Act 1996 against a GAFTA Appeal Award. The Appellant Sellers claimed cancellation of a contract for the sale of wheat f.o.b. Novorossiysk, for delivery in late August 2010, when in early August the Russian government prohibited the export of wheat between 15 August and 31 December 2010. The Respondent Buyers treated that as a wrongful repudiation and so terminated the sale contract. Had the sale contract not so terminated, it would have been cancelled without liability later. The appeal concerned the construction and application of the GAFTA Prohibition Clause, the GAFTA Default Clause and the House of Lords decision in The Golden Victory [2007] 2 AC 353. The appeal was dismissed, Hamblen J agreeing with the GAFTA Board of Appeal that the Prohibition Clause did not cancel the sale when the prohibition was enacted, but only if it remained in place until the end of the delivery period, and that the GAFTA Default Clause displaced the rule in The Golden Victory. He also raised for consideration, but did not decide, whether the rule in The Golden Victory applied at all to a ‘one-off sale contract'. The judge gave the Sellers leave to appeal to the Court of Appeal.

Members of Chambers: Andrew Baker QC for the Appellant (instructed by Reed Smith) and Philip Edey QC for the Respondent (instructed by Hill Dickinson)