How to save 194,000 USD and to gain friends?

• International Trade

Task

The Client, large international grain trader, used LegalCare program (i.e. legal support of GAFTA/FOSFA contracts) and applied to Interlegal for legal support of the contract on carriage of 25 thousand tons of wheat.

The Seller notified lawyers in advance on potential problem of cargo quality. Under the Contract, foreign material should not exceed 2%, while grain impurity was not covered by the Contract.

Certainly, under the Murphy’s Law, cargo survey showed that 14% of cargo included grains of other crops.

Solution search

The Consignee filed a claim against the Seller amounting to 194,000 USD and emphasized breach of the Seller’s obligation under the Sales Contract (foreign material 2%), so the Seller could face losses inevitably…

But due to LegalCare program the Seller did not face the problem tete-a-tete. Interlegal lawyers studied correspondence under the Contract, contacted the surveyors and, at the moment of filing the claim, drafted the legal counter-opinion.

Due to their prompt engagement, Interlegal lawyers studied the nuances, applied both the Ukrainian State Standard (DSTU) and ISO International Standards, having justified that 2% were heavy impurities, while grain impurity was not covered by the Contract. According to standards, in 14% there were available impurity values, while the goods quality was within the contractual regulations.

Result

The Buyer had to withdraw the claim on poor quality and to accept the goods, while 194,000 USD remained at the Client’s.

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