Novasen SA v Alimenta SA

Novasen SA v Alimenta SA

The FOSFA Default Clause does not confer a right to damages where no loss has been suffered; it limits damages to the contract-market price differential but does not override the compensatory principle. If the buyer does not buy against the default, damages are assessed by common law and may be nominal if subsequent events show no loss. The appeal succeeds and the award is remitted for further findings.

Parties
Claimant: Novasen S.A.; Defendant: Alimenta S.A.
Jurisdiction
England and Wales
Judgment Date
27 February 2013
Procedural Posture
Arbitration Appeal / Judgment on Appeal
Outcome
Appeal allowed; award remitted for further consideration.
Legal Topics
Assessment of Damages, Interpretation of Standard Clauses, Compensatory Principle, Sale of Goods, Arbitration Act 1996
Contract Law Arbitration Assessment of Damages Interpretation of Standard Clauses Compensatory Principle Sale of Goods Arbitration Act 1996

Case Brief

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Parties

Novasen S.A.

Claimant

Alimenta S.A.

Defendant

Procedural Posture

Arbitration Appeal / Judgment on Appeal

Legal Issues

  1. 1 Does the FOSFA Default Clause exclude common law principles for assessment of damages?
  2. 2 Was the Prohibition Clause applicable?
  3. 3 Would the contract have been cancelled automatically by operation of the Prohibition Clause?

Ratio Decidendi

The FOSFA Default Clause does not confer a right to damages where no loss has been suffered; it limits damages to the contract-market price differential but does not override the compensatory principle. If the buyer does not buy against the default, damages are assessed by common law and may be nominal if subsequent events show no loss. The appeal succeeds and the award is remitted for further findings.

Court Disposition

Appeal allowed; award remitted for further consideration.

Orders

  • Award remitted to the Board of Appeal for further findings in light of judgment.