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
Warinco sold 1000 tonnes soya bean meal to Fritz, CIF Weser ex Mediterranean port.
Warinco had bought 2000 tonnes of meal to shipped from Piraeus.
A government prohibition intervened making it illegal to ship meal from Piraeus.
Warinco tried to cancel with Fritz which claimed damages.
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.
Both Megaw and Bridge LJJ, on not entirely convincing reasoning, felt that Tradax should be confined to its own facts.
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