CAFI – Commodity & Freight Integrators DMCC v GTCS Trading DMCC

Facts

CAFI – Commodity & Freight Integrators DMCC bought 28,000 metric tonnes of Russian milling wheat from GTCS Trading DMCC under a contract dated 11 March 2022, reference RMW125-11032022-1, at US$465 per tonne C&FFO one Egyptian Mediterranean port, containing a GAFTA arbitration clause. The cargo was loaded at Novorossiysk on 14 March 2022 aboard the "NANA LEEN" and the vessel arrived at Alexandria on 21 March 2022. CAFI said it could not pay because US sanctions against Russia prevented its banks from processing payment; GTCS disputed that and by email of 23 March 2022 declared CAFI in default and the contract at an end, reserving its rights. Through a broker, the parties then negotiated a Second Contract for the same cargo at US$440 per tonne, containing a Termination Clause providing that the First Contract "is terminated and considered void". Payment was made and the cargo discharged in April 2022. GTCS claimed damages for repudiatory breach of the First Contract. The GAFTA First Tier Tribunal dismissed the claim, holding that GTCS had waived its right to damages. A five-arbitrator GAFTA Appeal Board reversed that decision, holding it had no jurisdiction to interpret the Second Contract, and awarded GTCS US$700,000 plus interest, fees and costs. CAFI challenged the Appeal Award under sections 67 and 68 of the Arbitration Act 1996 and sought leave to appeal under section 69 of the Arbitration Act 1996.