Seagrain LLC v Glencore Grain BV
The Prohibition Clause requires an executive act that is in the nature of a formal restriction on exports, not merely an act with collateral effects such as delay. The sellers failed to prove that the Ukrainian customs authorities' measures constituted such an act, and thus were not entitled to protection under the clause. The appeal was dismissed as the sellers did not discharge their burden of proof.
- Parties
- Appellant: Seagrain LLC; Respondent: Glencore Grain BV
- Jurisdiction
- England and Wales
- Judgment Date
- 12 December 2013
- Procedural Posture
- Appeal / Judgment
- Outcome
- Appeal dismissed
- Legal Topics
- Interpretation of Prohibition Clause, GAFTA Contracts, Export Restrictions, Arbitration Appeals
Case Brief
Summary, issues, holding and outcome
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Parties
Seagrain LLC
Appellant
Glencore Grain BV
Respondent
Procedural Posture
Appeal / Judgment
Legal Issues
- 1 Whether an executive act must itself restrict exports or whether its effect suffices under the GAFTA Prohibition Clause
- 2 Whether sellers must demonstrate reasonable efforts to ship goods or buy replacements for the Prohibition Clause to apply
Ratio Decidendi
The Prohibition Clause requires an executive act that is in the nature of a formal restriction on exports, not merely an act with collateral effects such as delay. The sellers failed to prove that the Ukrainian customs authorities' measures constituted such an act, and thus were not entitled to protection under the clause. The appeal was dismissed as the sellers did not discharge their burden of proof.
Court Disposition
Appeal dismissed
Orders
- Sellers found in default under the contract
- Sellers liable to buyers in damages
Full Case Text
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