How the war affects international trade

A Turkish company – one of the largest manufacturers of vegetable oils and biodiesel in Turkey – applied to Interlegal. The Client was unable to perform the foreign economic contract on vegetable oil supply from Turkey to Tunisia due to prohibition on export from Turkey. The contract was governed by English law and incorporated one of FOSFA standard proformas.

Turkish government implemented prohibition on vegetable (sunflower, soy etc.) oil in order to facilitate sufficient scope of product at the domestic market, due to disruption of supply chains and breach of navigation in the Black Sea caused by military aggression of the Russian Federation against Ukraine. So our Client referred to Prohibition Clause in the appropriate FOSFA proforma, having prolonged the contractual supply term for 30 days. However, Turkish government did not cancel export restrictions during prolongation term, so the Client stated that the contract shall be treated as automatically cancelled. But the Client’s counteragent disagreed with such interpretation of Prohibition Clause and claimed for loss recovery in the amount over 1 million USD.

Interlegal lawyers helped the Client to strengthen its legal position aimed at negotiations with its counteragent. In particular, we helped to collect the required evidence and justified the Client’s position in view of applicable English law and relevant precedents, so the Client was able to deviate unlawful claim filed by its counteragent, while the latter still could not object anything against our Client.