Olam Global Agri Pte Ltd v Holbud Ltd

Hearing date: 12 November 2025

Approved Judgment

This judgment was handed down remotely at 10.30am on 5 th December 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

THE HONOURABLE Mr Justice Trower

Introduction

This arbitration claim is an appeal under s.69 of the Arbitration Act 1996 (“s.69” and the “Act”) against a GAFTA Board of Appeal (“BOA”) Award No. 4702, dated 2 September 2024 (“the Award”).

The subject of the Award was an FOB sale contract incorporating the general terms of GAFTA Contract No 49 dated 19 November 2021 (“the Contract”). Under the Contract, Olam International Ltd, of which the current claimant Olam Global Agri Pte Ltd is the assignee (together “Olam”) agreed to supply a cargo of yellow corn to Holbud Ltd (“Holbud”) for delivery between 1–15 March 2022 (the “Delivery Period”). The origin of the corn was to be Ukraine or Romania at Olam's option.

The Contract provided Olam with a list of four Black Sea load ports from which to nominate for delivery: Pivdennyi, Odessa or Chornomorsk (in Ukraine), or Constanta (in Romania). Holbud's pre-advice nominating the vessel and its estimated time of arrival (“ETA”) was to be served on Olam not less than eight days before arrival at the load port. The load port was to be declared by Olam to Holbud in writing upon nomination of the vessel by Holbud.

The agreed chronology relating to the events which gave rise to the dispute was recorded in the Award as follows. At 6.30 am on 24 February 2022, the Ukrainian foreign minister announced that Russia had commenced a full-scale invasion of Ukraine. At 11.55 pm on the same day, Ukraine announced the closure of all Black Sea and Azov Sea ports. Between the announcement of the invasion and the closure of the Black Sea ports, Olam declared Ukrainian origin. Holbud promptly rejected the declaration saying that it would not accept any declaration of force majeure if made and saying that the cargo should be loaded from Romania. Just over two hours later Holbud nominated “ MV The Finder”, with an ETA of 6/7 March 2022, as the vessel to perform its obligations under the Contract.

The Finder was then at the Bosphorus and its ETA was unspecific as to which load port the estimate referred to. On the morning of 26 February 2022, Olam nominated Pivdennyi (Ukraine) as the load port, at which stage all Ukrainian Black Sea ports had been closed for two days. Olam requested Holbud to confirm that it would perform its obligations under the Contract.

On 28 February 2022, there was correspondence between the parties on the issue of whether the circumstances which had occurred amounted to an event of force majeure which would have had the consequence that performance under the Contract was suspended under clause 13 of GAFTA 49 (“clause 13”). This clause is entitled ‘Prevention of Delivery’, and the material parts read as follows:

“Should performance of this contract be prevented, whether partially or otherwise, by an Event of Force Majeure, the performance of this contract shall be suspended for the duration of the Event of Force Majeure, provided that Buyers/Sellers (the affected party) shall have served a notice on the other party within 7 consecutive days of the occurrence or not later than 21 consecutive days before commencement of the period of delivery, whichever is later, with the reasons therefor.

…

If the Event of Force Majeure ceases before the contract or any unfulfilled part thereof can be cancelled, Buyers/Sellers shall notify Sellers/Buyers without delay that the Event of Force Majeure has ceased. The period of delivery shall be extended, from the cessation, to as much time as was left for delivery under the contract prior to the occurrence of the Event of Force Majeure. If the time that was left for delivery under the contract is 14 days or less, a period of 14 consecutive days shall be allowed.”

Olam contended that events of force majeure had prevented delivery. Holbud did not accept that it was open to Olam to rely on force majeure arising out of Olam's nomination of Pivdennyi as the load port because at the time of nomination all Ukrainian Black Sea ports had already been closed. Holbud contended that there was no event of force majeure preventing Olam from complying with its obligations to perform by shipping with Romanian origin from Constanta.

On 2 March 2022, Olam sent a formal force majeure notice to Holbud under clause 13, which identified the events of force majeure on which it relied by reference to clause 13. It said that the declaration of Ukrainian origin was made before the closure of all Black Sea ports and could not be changed. It then continued:

“Buyers' latest message purports to reject our force majeure declaration but does not say that Buyers remain able to perform. Indeed, it is our understanding that Buyers cannot currently have a vessel arrive at the load port for receiving the contractual cargo. At the same time, Sellers are currently unable to accumulate and load the contractual cargo.

By this email, Sellers declare force majeure under clause 13 of GAFTA 49 (as incorporated into the contract) for reasons that include but may not be limited to (b) blockade; (c) acts of terrorism; (d) hostilities; unforeseeable and unavoidable impediments to transportation or navigation and/or (k) any other event comprehended in the term “Force Majeure”. Accordingly, performance of the contract is suspended in accordance with the terms of clause 13. For the avoidance of doubt, Sellers remain committed to complying with their contractual obligations.”

On the same day, Holbud rejected that notice and again requested that Olam nominate a Romanian port to perform its contractual obligations. Olam maintained its force majeure notice, which Holbud again rejected on 8 March 2022. Holbud's position was then reflected in an email sent on 9 March 2022, in which it alleged that Olam's refusal to withdraw its declaration of force majeure constituted an unequivocal repudiation of the Contract. However, rather than accepting the repudiation, Holbud stated that it would “refrain from holding Sellers in repudiatory breach until 21 days after the end of the delivery period, and potentially 14 days thereafter, being the suspension period(s) provided for in GAFTA 49 Clause 13”. Holbud stated that it was adopting this course “to keep open the possibility that Sellers might yet be able to deliver Ukrainian origin corn from a Ukrainian port”.

It was found by the BOA and not challenged by Holbud that, from 16 March 2022, which was the day after the final day of the Delivery Period, Holbud had employed The Finder on other work. However, it was only on 26 April 2022, some 41 days after the end of the Delivery Period, that Holbud held Olam in repudiatory breach and terminated the Contract.

On 12 July 2022, Holbud referred the dispute to arbitration. On 14 November 2023, GAFTA's First Tier Tribunal (“FTT”) issued an Award of Arbitration No. 18–721, finding Olam to have been in repudiatory breach of the Contract and liable to Holbud for damages in the sum of €5,793,460 plus interest and costs. Olam appealed to the BOA against Award No. 18–721 on 4 December 2023.

Olam advanced two arguments in its appeal to the BOA. The first argument was that its obligations under the Contract were limited to delivering Ukrainian—origin corn at the port of Pivdennyi and that performance of that obligation was excused by the occurrence of the events of force majeure following on from the Russian invasion and the closure of Ukraine's Black Sea ports. Most of the reasoning in the parts of the Award which recorded the BOA's findings were concerned with this first issue. Olam failed in its arguments on this point but they do not form the subject of the present appeal. Olam accepted that the BOA's conclusions on this issue turned on factual findings and cannot be challenged under s.69.

However, some of the specific findings made by the BOA have relevance both to that first argument and to the questions relating to damages which do arise on this appeal. They include the following:

i) Pivdennyi was an unsafe port when Olam nominated it as the load port on 26 February 2022 and it was prospectively unsafe for the entirety of the Delivery Period by reason of the Russian invasion.

ii) Olam's declaration of force majeure on 2 March 2022 was invalid on the grounds that a seller cannot nominate an unsafe port after it has become subject to an event of force majeure and then use that nomination to claim relief.

iii) Olam was in default of the Contract and the date of default was 26 April 2022, as Holbud expressly kept the Contract open until that date. This date was agreed between the parties in the event that Olam was found to have been in default.

Olam's second argument before the BOA is the primary focus of the present appeal and was described by the BOA as a “second and hitherto unargued issue: that Buyers themselves were unable to perform the Contract”. The essence of the argument was that The Finder, which had been nominated by Holbud, had remained in the Sea of Marmara up until 16 March 2022 when it departed for Novorossiysk in Russia, arriving there on 17 March. It stayed in Novorossiysk until 16...