Mr Justice Eder has handed down judgment in Soufflet Negoce v Fedcominvest concerning the ‘Notices clause’ in GAFTA Contract No.64. The same ‘notices clause’ appears in numerous GAFTA standard forms and the judgment is therefore of wider interest. The essential question was whether the provision within that clause stating that “any notice received after 16:00 hours on a business day be deemed to have been received on the business day following” applies to all contracts or only in the case of resales or repurchases. The Judge held that the latter was the case, upholding the Board of Appeal’s award to that effect. It follows that in cases where there are no resales/repurchases, notices received between 16:00 and midnight are not deemed served on the next business day.
The judgment provides clear guidance on the meaning of the frequently-used Notices clause. It also considers the balance between analysing contracts syntactically and on the basis of their underlying commercial purposes. In addition, the judgment touches on the question of the extent to which the court should defer to an assessment by trade arbitrators on where business common sense lies when construing a contract.
Malcolm Jarvis represented Fedcominvest, the successful respondents, on instructions from Hill Dickinson LLP.