Does Short Notice Of Nominated Vessels' ETA Invalidate The Notice?

Thai Maparn Trading Co Ltd v. Louis Dreyfus Commodities Asia Pte Ltd [2011] EWHC 2494 (Comm)

The background facts

This was an appeal by the Sellers (Thai Maparn Trading) under S. 69 Arbitration Act 1996 (error of law) against two arbitration awards issued by the GAFTA Board of Appeal.

The dispute arose out of two FOB contracts for the sale of rice based on GAFTA Form 120. In both cases, the GAFTA Board had upheld the first tier GAFTA awards that the Sellers (Claimants in the appeal) had repudiated the contracts by making it clear to the Buyers (Louis Dreyfus, Defendants in the appeal) that they did not and would not have cargo available to meet the vessel nominated in each case by the Buyers. The GAFTA Board held that these repudiations amounted to a default under Clause 23 of GAFTA 120 and that the Buyers were, therefore, entitled to damages assessed as at the date of the Sellers' default. In both cases, the Sellers had tried (and failed) to argue that the Buyers had given short notice of the arrival of the vessel, which was non-contractual, thus entitling the Sellers to reject the nominations.

The contractual provisions

Both contracts stipulated loading terms that required the Buyers to give a minimum of 7 working days written pre-advice of the vessel's ETA and for NOR to be tendered in writing during normal business hours. The relevant terms of GAFTA 120, as incorporated into each of the two contracts, provided as follows:

The Buyers were to serve not less than a certain number of consecutive days notice of the name and probable readiness date of the vessel and the estimated tonnage required. Provided that the vessel was presented at the loading port in readiness to load within the delivery period, the Sellers should, if necessary, complete loading after the delivery period. Any notice received after 16.00 hours on a business day would be deemed to have been received on the business day following (Clause 6 - Nomination of vessel). Notification of the vessel's readiness to load at the port of loading was to be served on the Sellers at their office at the port between certain specified hours (Clause 10 - Loading). If either party defaulted in fulfilling the contract, the damages payable were to be based on, but not limited to, the difference between the contract price and either (a) the default price obtained by the innocent party by selling to or purchasing from an alternative supplier; or (b) the actual or estimated value of the goods on...