Interlegal refunded the groundless setoff under the forwarding Contract on CIF terms

Interlegal Сlient, a large foreign trading company, acting as a Buyer, concluded a range of trade contracts on agricultural products sale and purchase with one of the largest European Union traders. The Contracts were concluded on CIF terms, one of the Egyptian ports. Payment was agreed by the Parties mainly on CAD terms.

Under one of the Contracts, treated as a forward Contract, the Buyer conducted advance payment amounting to 4,000,000.00 USD.

Within several months, the Seller were supplying the goods in agreed lots to the ports of destination. In the process of supply, presentation of the shipping documents was delayed to the Buyer’s Bank, causing thereby delays in discharge and vessels’ demurrage. The dispute concerning 600,000.00 USD demurrage payment arose between the Parties.

The Buyer acknowledged the amount partially, while most of the claimed demurrage was rejected. Despite the Seller’s groundless demands and the Buyer’s official rejection, the Seller exercised an alleged rights of set off between the disputed amount of demurrage and advance payment under the forward Contract.

The Client applied to Interlegal to defend the infringed interests.

Interlegal experts analyzed the chronology of contractual supplies under which the disputed demurrage was accrued. In addition, grounds and lawfulness of the set off conducted were assessed. With reference to GAFTA Standard Terms, the English law principles and case law, motivated claims were filed against the Seller under three Contracts, on refunding the set off sums under the forward Contract. Several GAFTA arbitration proceedings were initiated.

Due to active engagement of Interlegal lawyers, the Seller had to join negotiations and agreed to settle the dispute amicably. The Parties signed the Settlement Agreement based on which the Seller paid in full the agreed settlement amount to the Buyer.

Interlegal lawyer Olena Ptashenchuk under general supervision of the partner Natalya Myroshnychenko led the case.