Interlegal won the dispute at GAFTA arbitration upon non-performance of the contract regarding prohibition to import yellow peas in India, due to the Buyer’s rejection to accept several lots of peas in view of import restrictions imposed by the Indian government in May 2018. Interlegal Client was the agricultural product supplier on CIF terms.
The Seller fulfilled its contractual obligations in full. The first lot was supplied and paid, with all the other lots accumulated at the sea port for loading on board of the vessel. During the contract performance, the Buyer notified on prohibition to import yellow peas in India for three months and therefore declared on force majeure and rejected the goods acceptance. Later the Buyer stated on the contract frustration, since obligations cannot be fulfilled due to circumstances out of its control, and on its exemption from liability for cargo acceptance and payment.
The Seller insisted that force majeure clause (based on GAFTA 88 proforma) shall not cover the Buyer and, due to CIF supply terms, the goods may be transferred to the sea port of any other country.
GAFTA arbitration tribunal supported in full the Seller’s position regarding absence of frustration and force majeure at the Buyer’s. Arbitrations highlighted that CIF supply basis shall mean sale of documents and stated that the Buyer was not obliged to accept the goods only at the destination port set forth in the contract.
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