Arbitration practice: in the process of GAFTA arbitration proceedings Interlegal reduced essentially the amount claimed by counteragents
The dispute arose from the breach of Sales and Purchase Contracts by the Sellers – non-resident companies. The Sales and Purchase Contracts for 20,000 tons of corn were concluded with the Swiss trading company in November 2013. The Ukrainian company acted as a guarantor of performance the contracts.
During performance of the contracts, on the 28th of February the Sellers notified the Buyer that due to difficult situation in Ukraine they were unable to perform their contractual obligations to supply the goods in the contracted amount.
On the 4th of April 2014 the English law firm which represented the Seller’s interests under both contracts announced them in default and initiated the arbitration proceedings where the Ukrainian company acted as the co-Defendant. The Buyer claimed the default price of goods from the Sellers (as of the 4th of April), namely 420,000 USD, under both contracts. The Sellers denied such claims and instructed the lawyers from Interlegal.
During arbitration proceedings, the experts from Interlegal proved that calculation of default price (as of the 4th of April) contradicts to the principle of justice and that the fair date of default should be the 28th of February, i.e. the day when the Sellers announced about their incapability to perform the contracts. Recalculated default cost (as of the 28th of February) made up 250,000 USD under both contracts.
Arbitration agreed with arguments presented by the Defendant’s lawyers and charged the sum almost twice less than the claimed amount.
Dmitriy Zagorodnyuk and Alexey Remeslo, the senior lawyers, and Ilona Bilyuk, the lawyer, under general supervision of Artem Skorobogatov, the associated partner, worked upon the cases.