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Arbitration – extension of time refused for delay of 74 days beyond statutory time limit

The Facts

Indonesian coking coal was sold pursuant to an international contract of sale.

Clause 2 provided as follows:

Description / Indonesian coking coal in bulk.

              Quality: In accordance with ASTM standards.

              Description / quality:

              Fluidity (typical) 500DDPM (dial divisions per minute)

              MMR (Mean Maximum Reflectance)(typical) 1.2 %”

Clause 9, headed “penalties” read in part:

“Fluidity: rejection below 250

              MMR: rejection below 1.05 % and above 1.3 %”

Payment was by irrevocable letter of credit against presentation of, inter alia, a load port sampling analysis certificate issued by SGS in conformity with [contractual] specifications.

Despite the SGS certificate failing to record the fluidity and MMR levels, buyers took delivery and paid for the coal. Thereafter buyers instituted an arbitration claim for damages alleging that the coal delivered was off specification.


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