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Bunge S.A. v Nidera B.V.

The Court of Appeal has dismissed the appeal by the Sellers, Bunge, from the decision of Hamblen J ([2013] 1 Lloyd's Rep.621) who had in turn dismissed their appeal from an award of the GAFTA Board of Appeal. The case concerned the construction of the GAFTA Prohibition Clause and Default Clause and, potentially, the application of The Golden Victory in calculating damages for anticipatory breach in sale of goods contracts.

The Court of Appeal confirmed Hamblen J's decision on the GAFTA Clauses, accepting the argument of Buyers, Nidera, that (i) the contract would only be cancelled under the Prohibition Clause where the relevant prohibition in fact restricted shipment of the relevant type of cargo during the shipment period, and not from the moment, in advance of the shipment period, that the prohibition was imposed (even where the announcement was of a prohibition which would, if it remained in place, cover the entire shipment period); and (ii) damages were to be assessed on the basis of the difference between the market and contract price as at the default date pursuant to the Default Clause even if at common law damages would have been nominal only applying the approach in The Golden Victory. It was therefore unnecessary for the Court of Appeal to consider the application of The Golden Victory to sale of goods contracts, or Hamblen J's suggestion in particular that it does not apply to a ‘one-off' sale.

Members of Chambers: Andrew W Baker QC for the Appellant Sellers (instructed by Reed Smith) and Philip Edey QC for the Respondent Buyers (instructed by Hill Dickinson).