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Commercial Disputes Weekly – Issue 1071 March 2022

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"The FOB plus freight approach is fairly conventional as a mechanism of establishing a proxy."Sharp Corp Ltd v Viterra BV

Where a cargo of lentils and peas was not accepted by the buyer at the discharge port in India, the GAFTA Default Clause applied to determine the quantification of damages. The Commercial Court dismissed the appeal against the GAFTA Appeal Board decision and held that the value of the goods had to be determined based on the same terms and conditions as the breached sale contract, namely the cost of buying the same cargo and shipping it between the same ports. The prices in the domestic market in India were not like for like.
Sharp Corp Ltd v Viterra BV (aka Glencore Agriculture BV) [2022] EWHC 354 (Comm), 18 February 2022

Litigation Privilege
In a dispute relating to forward freight agreements (FFA), the claimants withheld disclosure of documents relating to an audit of the FFAs, claiming that they were covered by litigation privilege. The judge concluded that the FFA audit had been arranged for the purpose of supporting claims of mismanagement; the dominant purpose of creating the audit report was not litigation that was in reasonable prospect. The claimant was ordered to reconsider its claim to privilege over the FFA audit documents. However, the claimants had not waived privilege over internal communications and communications with legal advisers relating to discovery of the alleged fraud.
Kyla Shipping Co Ltd and another v Freight Trading Ltd and others [2022] EWHC 376 (Comm), 22 February 2022

A Swiss petroleum supplier has been held to have a good arguable case that an English jurisdiction clause was incorporated into an oral agreement to supply petroleum to a Liberian importer. The parties had entered into a series of spot contracts over 18 months and many of these contracts contained an English jurisdiction clause. That was sufficient to establish a course of dealing.  The parties had concluded a term agreement incorporating an English jurisdiction clause and so the claimant was entitled to bring its claim in the English courts.
Addax Energy SA v Petro Trade Inc [2022] EWHC 237 (Comm), 14 January 2022

Contract formation
LNT’s claim against Airbus for breach of contract was rejected by the Commercial Court on the basis that no binding contract had been concluded. Airbus had issued an Alert Service Bulletin in relation to replacement of planet gears in the type of helicopter owned by LNT. Subsequent correspondence between LNT and Airbus amounted to discussion of the possible solutions and referred to the need for detailed conditions for the retrofit still to be provided. There had been no offer and acceptance, and the discussions were not sufficiently certain and complete to amount to a binding contract.
LNT Aviation Ltd v Airbus Helicopters UK Ltd [2022] EWHC 309(Comm), 21 February 2022

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams:

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