Sanhe Hope Full Grain Oil Foods Production Co Ltd v Toepfer International Asia Pte Ltd [2007] EWHC 2784 (Comm) (28 November 2007)

Sanhe Hope Full Grain Oil Foods Production Co Ltd v Toepfer International Asia Pte Ltd [2007] EWHC 2784 (Comm) (28 November 2007)

Clause 27 is not a liquidated damages clause; damages must be assessed based on actual loss suffered, subject to the upper limit of the difference between contract price and market price. The Appeal Tribunal misinterpreted the clause as liquidated damages. Remission is required for reconsideration of whether Seller would have earned profit from Henan contract but for Buyer's breach.

Citation
[2007] EWHC 2796 (Comm)
Parties
Claimant Buyer (respondent/ Defendant in the Arbitration): Sanhe Hope Full Grain Oil Foods Production Co Ltd; Defendant Seller (claimant/ Appellant in the Arbitration): Toepfer International Asia Pte Ltd
Jurisdiction
England and Wales
Judgment Date
27 November 2007
Procedural Posture
Appeal Under Section 69(1) Arbitration Act 1996 / Judgment on Appeal Against FOSFA Appeal Arbitration Award
Outcome
Award remitted to Tribunal for reconsideration in light of judgment.
Legal Topics
Contract Interpretation, Damages Assessment, Liquidated Damages, Mitigation of Loss
Commercial Law Arbitration Contract Interpretation Damages Assessment Liquidated Damages Mitigation of Loss

Case Brief

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Parties

Sanhe Hope Full Grain Oil Foods Production Co Ltd

Claimant Buyer (respondent/ Defendant in the Arbitration)

Toepfer International Asia Pte Ltd

Defendant Seller (claimant/ Appellant in the Arbitration)

Procedural Posture

Appeal Under Section 69(1) Arbitration Act 1996 / Judgment on Appeal Against FOSFA Appeal Arbitration Award

Legal Issues

  1. 1 Construction of clause 27 of FOSFA Form 22
  2. 2 Assessment of damages under default clause
  3. 3 Whether clause 27 is a liquidated damages clause

Ratio Decidendi

Clause 27 is not a liquidated damages clause; damages must be assessed based on actual loss suffered, subject to the upper limit of the difference between contract price and market price. The Appeal Tribunal misinterpreted the clause as liquidated damages. Remission is required for reconsideration of whether Seller would have earned profit from Henan contract but for Buyer's breach.

Court Disposition

Award remitted to Tribunal for reconsideration in light of judgment.

Orders

  • Remit award to Tribunal to determine if Seller would have earned profit from Henan contract but for Buyer's breach.