Interlegal lawyers defended the large international agrarian trader’s interests
12 February, 2021
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Autumn is certainly a hot time for grain terminals. Sometimes the terminal capacity is not enough for the volume of cargo delivered for discharge from the railroad, causing thereby congestion in rail transport or even temporary restrictions imposed by the railroad on railway transportation (so-called convention).
Such circumstances may jeopardize fulfillment of agreed delivery plans and may cause delays in contract performance terms. It is sometimes very difficult to identify the party responsible for such a disruption, since contracts either do not contain clauses thereon or such clauses may be incomplete, unclear or contradictory.
Due to such non-obviousness the parties are extremely reluctant to make mutual concessions, shifting the blame on each other and regularly escalating their claims, bringing them step by step to a dead end. In such case, amicable settlement of the dispute becomes impossible, and the parties inevitably end up in a conflict, resolution whereof shall be possible only at the court or arbitration.
For example, a Swiss company recently applied to Interlegal for legal advice, based on the contracts with a large international holding company on supply of grain (Ukrainian origin). The parties agreed that our Client will deliver the goods to the buyer by rail, towards one of the grain terminals in Ukraine.
After our Client had commenced delivery of goods, just such a situation arose, as described above: due to congestion of the terminal and long queue of railway cars to the terminal, the Client was unable to complete contractual delivery within the agreed period. Therefore, although the convention was never announced, both parties faced a situation where the delivery term had expired long ago, 80% of the goods amounting to ca. 1 million USD still were not delivered, while market price of the goods almost doubled. Since the main reason for failure to comply with deadlines was the situation on the railroad, the parties, each being confident that they were right and not agreeing to make concessions, reached a dead end.
With regards to the fact that the contract between the parties provided for the English law, Interlegal lawyers drafted a legal advice for the Client, with a detailed legal analysis of the current situation, and assisted in drafting a solid negotiating position in order to reach a reasonable compromise.
Due to support of our lawyers, the Client managed to settle the current situation and to maintain partnership with the counteragent. Negotiations resulted in signing an amicable agreement drafted by our lawyers, whereunder the buyer agreed to accept reimbursement amounting to less than 100 thousand USD in exchange for a 4-fold reduction in the volume of the supplied goods, followed by arrangement of delivery term convenient for the Client.
Interlegal lawyer Ganna Liakhova, associate attorney Alexander Bondar and partner Artem Skorobogatov led the case.
