584. Warinco A.G. v Fritz Mauthner [1978] 1 Lloyds Rep 151

Clause 21 GAFTA 100 – prohibition affecting loadport chosen by sellers – no proof that they could not have, by reasonable endeavours, obtained goods from another port within the agreed range

The facts

Warinco sold 1000 tonnes soya bean meal to Fritz, CIF Weser ex Mediterranean port.

Warinco had bought 2000 tonnes of meal shipped from Piraeus.

A government prohibition intervened  making it illegal to ship meal from Piraeus.

Warinco tried to cancel with Fritz which claimed damages.

Findings

A GAFTA umpire and the Appeal Board found in favour of the buyers on the basis that sellers failed to show that they had made reasonable efforts to fill the order by shipping form another Mediterranean port not hit by the prohibition imposed by the Greek Government.

Donaldson J reversed the award but it was restored by Megaw LJ.

Donaldson J recognised the principle applied by the GAFTA arbitrators but considered himself bound by a judgment of Lord Denning MR in Tradax v Andre Cie.

In Tradax, Lord Denning held that in a similar forward selling situation, sellers who were locked in string of contracts did not have to find similar goods elsewhere when their intended supply failed.

Comment

The principle to be extracted from this case is that the exemptions in Gafta 100 are qualified by an overriding obligation on the sellers to deliver.

Insofar as the circumstance that a contract is one in a string should make no difference either to the interpretation of the contract or to the obligations of the parties, Tradax probably wrongly decided but neither Bridge nor Megaw LJJ wanted to say so.

 

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