Food & Drink

Advising Swiss commodity traders in a dispute over rice with Indian buyers

We acted on behalf of Swiss based commodity traders in a dispute with Indian based buyers arising from the sale of 10,000 MT of Indian White Rice.

The contract was subject to the rules of the Grain and Feed Trade Association (“GAFTA”) which provided for arbitration under GAFTA rules. English law applied.

The contract was concluded by way of a “quick fire” exchange of emails familiar to those in the trade and a telephone conversation. There was a pressing shipment deadline. The exchange of emails concluding the contract was followed by a formal written agreement specifying terms in greater detail which remained unsigned by the Indian Sellers.

The Indian Sellers subsequently failed to load the rice. The Buyers were required to make payments to the Owners of the vessel arising from the delay caused at load port in addition to the costs incurred to receivers caused by the late delivery of a substitute cargo. Those losses were sought from the Indian Sellers.

The Indian Sellers challenged the jurisdiction of the Tribunal, disputed that a binding contract had been agreed over the telephone or as evidenced by the subsequent email exchange. The terms of the formal written agreement which followed were disputed. Quantum was also vigorously contested. Extensive written submissions were required before the Tribunal were in a position to make an Award.

Arbitration is a confidential process and accordingly the specific facts and outcome must remain confidential to the parties.

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