09/05/2013

Seagrain LLC v Glencore Grain BV

This was an arbitration appeal concerning the construction of the GAFTA Prohibition Clause. Blair J held that the words “executive act … restricting exports” in the GAFTA Prohibition Clause mean an act done by or on behalf of the government, which is in the nature of a formal restriction of exports. It cannot be construed as extending to every action by an official body which has the effect of restricting exports. Beyond that, the Court should not impose a prescriptive interpretation; this is a question for the specialist GAFTA tribunal to determine in light of their experience of the trade.

Blair J therefore dismissed the appeal on the basis that the GAFTA Board of Appeal had not applied the wrong test. He declined to go on to deal with the issue of whether the Sellers had to clearly demonstrate that they had tried all avenues and made all reasonable efforts to either ship the goods or to try and buy replacement goods, noting that this was under appeal in Bunge SA v Nidera SA [2013] EWHC 84 (Comm). The Judge gave the Sellers leave to appeal to the Court of Appeal.

Susannah Jones acted for the respondent (instructed by Reed Smith LLP)