Pec Ltd (Claimant (Buyers) v Thai Maparn Trading Company Ltd (Defendant (Sellers)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE HAMBLEN |
| Judgment Date | 13 December 2011 |
| Neutral Citation | [2011] EWHC 3306 (Comm) |
| Docket Number | Case No: 2011 FOLIO 500 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 13 December 2011 |
[2011] EWHC 3306 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Hamblen
Case No: 2011 FOLIO 500
Mr Michael Brindle QC and Mr Brian Dye (instructed by Zaiwalla & Co) for the Claimant
Mr Stephen Males QC (instructed by Elborne Mitchell LLP) for the Respondent
Hearing dates: 2 December 2011
Introduction
The Claimant Buyers ("the Buyers") appeal pursuant to s.69 of the Arbitration Act 1996 from the decision of the GAFTA Board of Appeal dismissing the Buyers' claim for damages. The Appeal Award ("the Award") allowed the appeal of the Respondent Sellers ("the Sellers") from a first tier GAFTA Award, dated 4 March 2010 which had awarded damages of US$ 14,520,000 to the Buyers.
The case concerns an FOB contract for the sale of 22,000 mt of Thai parboiled long grain rice ("the contract"). The contractual shipment period was "During April —07 May 2008 with min. 10 working days of pre-advice of vessel arrival." The contract incorporated the terms of GAFTA Form No. 120, clause 7 of which provides that the buyer may claim an extension of the delivery period by an additional period of up to 21 days.
The Buyers failed to provide a vessel to lift the goods during the original delivery period although they had nominated a vessel which was said to have a laycan of 25 April to 7 May 2008. The Buyers contended that the reason that no vessel was presented was because the Sellers were "in repeated anticipatory renunciatory and repudiatory breach". In support of that contention they relied in particular on the Buyers' failure to respond to requests to confirm the load readiness of the cargo. The Board rejected this claim at para. 5.3.5 of the Award and found at para. 5.3.4 that "neither the contract nor GAFTA Form No. 120 provided for any notice to be given by Sellers regarding loadreadiness of the cargo and Sellers, consequently, were under no obligation to respond to Buyers' requests". The conclusion that there was no anticipatory breach by the Sellers is not challenged on appeal. It follows that, as was common ground, because the Buyers did not present a vessel within the original delivery period, the validity of the claim depends (at least) on whether they made a valid claim for an extension of the delivery period in accordance with clause 7 of GAFTA Form No. 120 (paragraph. 6.3 of the Award).
The issue on this appeal is whether one or other of the "notices" relied on by the Buyers constituted a valid claim for an extension in accordance with clause 7. It is common ground that if the appeal succeeds, the award will need to be remitted for the Board of Appeal to deal with all remaining issues.
The Board of Appeal concluded that no valid claim for an extension was made, essentially because they found that the "notices" made the grant of an extension subject to conditions which were not fulfilled. It is the correctness of that conclusion which is challenged on this appeal, an issue which turns on the proper construction of the messages in question.
Background facts
The background facts are set out in section 2 of the Award which provides so far as material as set out below..:
"2.1 THE CONTRACT
On 8 January Sellers agreed to sell and Buyers agreed to buy about 22,000 metric tons of Thai Parboiled Long Grain Rice.
The contract contained the following terms relevant to the dispute:
"Commodity: Thai parboiled long grain rice 100 pct sortexed as per official export standards of Thailand
Quantity: 22,000 MT (5 Pct more or less at buyer's option and at contract price)
Shipment: During April – 07 May 2008 with min. 10 working days of pre-advice of vessel arrival.
Price: A t US$ 385 per M/Ton FOB Stowed
Kohsichang Thailand.
….
All other terms and conditions while not in contradiction with the above shall be as per GATFA 120 including arbitration in London as per GAFTA 125".
Buyers sold the goods on to SSA General Trading Co LLC, a company registered in Dubai.
….
2.5 On 14 April Pawan Jain inter alia e-mailed Sellers that:
" …As per concern 2200mt (5% more or less, at buyer's option) Contract No TME-PEC—080108 dated 8 th January 2008, vessel nominated for the same 'MV Sunrise Ocean' laycan time will be between 25 th April to 7 May in Thailand. Please confirm the status/schedule for 22.000MT …"
2.6 On 16 April Buyers sent the following to Sellers:
"We are pleased to advise you that against the above Letter of Credit we nominate vessel MV Sunrise Ocean or its substitute with laycan 25 th April to 7 th May 2008 and port of loading is Kohsichang, Thailand kly ensure material is ready and bag packed in out brand name triple one and red eagle"
2.7 On 22 April Pawan Jain appointed Seaway Express Co Ltd as ship's agent.
2.8 On 23 April at 13.19 hours Seaway Express Co.Ltd sent Sellers the following e-mail:
SUBJECT ; REF M/V "SUNRISE OCEAN" 22,000 MT BAGGED RICE
KINDLY BE INFORMED THAT THE CAPTIONED VESSEL HAS BEEN NOMINATED TO LOAD YOUR 22,00 MT THAI PARBOILED RICE FOR ACCOUNT OF MESSRS. PAWAN JAIN & SONS AT KOHSICHANG WITH LAYDAYS 25 TH APRIL/07 TH MAY 2008. WE SHALL REVERT HER E.T.A UPON RECEIPT OF FURTHER NEWS. MEANTIME WOULD YOU KINDLY CONFIRM YOU WILL PREPARE CARGO READY FOR LOADING ACCORDINGLY.
2.9 Sellers replied the same day at 14.14 hours:
"We confirm receipt of your mail msg dated April 23 2008 and wish to advise you that we do not have cargo ready on A/C of Pawan Jain & Sons and hence, with due respect, we reject nomination of above vessel."
2.10 Still on 23 April at 15.30 hours Seaway Express sent the following to Sellers:
"SUBJECT: M.V "SUNRISE OCEAN"22,000 BAGGED RICE
Further to our below e mail kindly be informed that the captined vessel presently given ETA on 3rd May 2008. Kindly arrange cargo load ready in time."
2.11 On 24 April at 13.07 hours Seaway Express sent the following e-mail to Sellers which inter alia read:
"SUBJECT – REF M/V "SUNRISE OCEAN" 22,000 MT BAGGED RICE
Kindly be informed that the captioned vessel has been nominated to load your 22,000 Metric Tons of Thai Long Grain Parboiled Rice for account of Messrs PEC Ltd at Kohsichang, the vessel is expected to arrive at Kohsichang on 03rd May 2008 subj AGW/WP/UCE. You are therefore kindly requested to prepare cargo ready for loading timely and confirm you are arranging accordingly."
2.12 On 25 April Seaway Express e-mailed Sellers:
"SUBJECT – REF M/V "SUNRISE OCEAN"22,000 MT BAGGED RICE
Refer to our below e mil which sent to you yesterday, we are still awaiting your confirmation of cargo readiness. Many thanks for your attention/cooperation."
2.13 On 30 April Seaway Express sent the following to Sellers:
SUBJECT REF M/V SUNRISE OCEAN" 22,,000 MT BAGGED RICE ACCT PEC LTD
Kindly be informed that the captioned vessel ETA at Kohsichang on/about 03rd May 2008 subj AGW/WP/UCE and she will load your 22,000 metric tons Thai Long Grain parboiled Rice for account of Messrs PEC Ltd. You will prepare cargo ready timely.
Kindly advise your cargo load readiness as soon as possible. Many thanks for your attention and cooperation."
2.14 M/V SUNRISE OCEAN on 2 May arrived at Kakinada where she loaded a cargo of rice for Nigeria.
2.15 On 3 May 2008 at 22:25 hrs, the Master of M/V SUNRISE OCEAN sent an email to Sellers and Buyers stating:
"PLEASE NOTE ETA BANGKOK 15 MAY 2008, WP AGW."
2.16 On 8 th May Buyers at 20.54 hours sent the following to Sellers:
"Please refer to our various notices for the above contract, also from our shipping agent regarding nomination of the vessel along with the ETA notice of the Master of the Vessel. Since we did not hear from you regarding readiness of the material we did not place the vessel to avoid demurrage.
As a gesture of goodwill, without prejudice to our rights, we are ready to extend the delivery period by 21 days. We are ready to ear all charges for storage, interest insurance and other such normal expenses due for the extension of 21 days. We would once again request you advise us the readiness of the material as per the contract within 2 days.
The last date of shipment was 7th May 2008 and if we do not receive any reply regarding the cargo readiness for loading from your side within 2 days we put you in default of the contract."
2.17 On 8 th May at 15.08 hours, Buyers' London Solicitors, Zaiwalla & Co, sent the following to Sellers:
"Re: Sale purchase contract No. TNT PEC-080108 dated 8th January 2008.
We have been instructed by PEC Ltd of New Delhi who have a Sale Purchase Contract No. TNT PEC-08018 dated 8th January 2008 for sale of 22,000 MT (5 pct more or less at buyer's option) of Thai Parboiled long grain rice.
Under this contract you have contracted to ship April—07th May 2008 22,000 mt of rice 100 pct sorted as per official standards of Thailand to our clients the buyers.
The shipment tern required our client to advise you of the vessel's arrival for loading. Our client informed you by their message of 16 April 2008 of the nomination of the vessel MV SUNRISE OCEAN or its substitute with lay can 25 April to 7 May 2008.
Because of your company's failure to perform another contract earlier Mr Jain of our client visited Bangkok for a personal meeting with yourcompany but that meeting could not take place because he was told by your office that the concerned person in your company was unavailable.
Despite your clear indication that you are not going to perform your obligation under the Contract and therefore you are in breach of the Contract, our client hereby gives you Notice under...
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