The court considered the effect of the default clause in a standard form of contract which is widely used in the grain trade. On 10 June 2010 the respondents, Nidera BV, whom I shall call ‘the buyers’, entered into a contract with the appellants, Bunge SA (‘the sellers’), to buy 25,000 metric tonnes (+/- 10% in buyer’s option) of Russian milling wheat crop 2010, FOB Novorossiysk. The shipment period was August 2010, but there were provisions for narrowing that period by notice. In the event it was narrowed to 23-30 August 2010. The contract incorporated GAFTA Form 49 (as in effect from 1 January 2006), which is the standard form of FOB sale contract of the Grain and Feed Trade Association, for goods delivered from central or Eastern Europe in bulk or bags.
Held: The compensatory principle established in The Golden Victory is not limited to instalment contracts, and the GAFTA Appeal Board was in error in thinking that it was.
Lord Neuberger, President, Lord Mance, Lord Clarke, Lord Sumption, Lord Toulson
 UKSC 43,  WLR(D) 283,  3 All ER 1082,  BUS LR 987, UKSC 2014/0019
Bailii, Bailii Summary, SC, SC Summary, WLRD
Sale of Goods Act 1979 51
England and Wales
Cited – Maredelanto Compania Naviera SA v BergbauHandel GmbH (The Mihalis Angelos) CA 1-Jul-1970
The parties had agreed a charterparty. The ship was to sail to Haiphong to load a cargo for delivery in Europe. The charterer had a right to cancel if the vessel was not ready on a certain date, but a few days earlier they repudiated the charter. . .
Cited – Golden Strait Corporation v Nippon Yusen Kubishika Kaisha; ‘the Golden Victory’ CA 18-Oct-2005
Measurement of damages for repudiatory breach.
The parties had entered into a charter which was intended to last seven years. The charterers broke the charterparty. A war later occurred which would have cut the contract short in any event.
At First Instance – Bunge Sa v Nidera Bv ComC 29-Jan-2013
The Court was asked: ‘2.1 Is the application of the GAFTA prohibition clause limited to a case where it can be seen after the event that performance of the contract has in fact been prevented by the prohibition in question?
2.2. Does the GAFTA . .
Appeal from – Bunge Sa v Nidera Bv CA 12-Dec-2013
The court heard an appeal from an order upholding an award made by the Board of Appeal of the Grain and Feed Trade Association concerning the effect of the Prohibition clause in the GAFTA standard form of contract for delivery on f.o.b. terms of . .
Cited – Howie v Anderson 1848
The court considered the approach of the Scots courts to anticipatory breach of contract, or renunciation. . .
Cited – Robinson v Harman 18-Jan-1848
Damages for breach of contract should compensate the victim of the breach for the loss of his contractual bargain. Baron Parke said: ‘The next question is: What damages is the plaintiff entitled to recover? The rule of the common law is, that where . .
Cited – Hochster v De La Tour QBD 25-Jun-1853
The plaintiff said that the defendant had given him a contract to travel with him and to act as the defendant’s courier, but then changed his mind. The plaintiff obtained another engagement to start before the proposed term. The defendant said there . .
Cited – Golden Strait Corporation v Nippon Yusen Kubishka Kaisha (‘The Golden Victory’) HL 28-Mar-2007
The claimant sought damages for repudiation of a charterparty. The charterpary had been intended to continue until 2005. The charterer repudiated the contract and that repudiation was accepted, but before the arbitrator could set his award, the Iraq . .
Cited – Garnac Grain Co Inc v HMF Faure and Fairclough PC 1967
The Board was asked what was necessary to establish the raltionship of principal and agent.
Held: In the essence of agency is the element of consent.
Where there is an available market for the goods, the market price is determined as at . .
Cited – Jamal v Moolla Dawood, Sons and Co PC 3-Nov-1915
The plaintiff claimed damages from the buyer for his failure to accept shares contracted to be taken on a particular date. Two months after that date the sellers began to re-sell the shares on a rising market.
Held: Damages for breach of . .
Cited – Doyle v Olby (Ironmongers) Ltd CA 31-Jan-1969
The plaintiff had been induced by the fraudulent misrepresentation of the defendant to buy an ironmonger’s business for 4,500 pounds plus stock at a valuation of 5,000 pounds. Shortly after the purchase, he discovered the fraud and started the . .
Cited – Modern Engineering (Bristol) Ltd v Gilbert Ash (Northern) Ltd HL 1974
The court considered how to construe a clause in a contract which excluded a remedy provided by law. Lord Diplock said: ‘It is, of course, open to parties to a contract . . to exclude by express agreement a remedy for its breach which would . .
Cited – Tai Hing Cotton Mill Limited v Kamsing Knitting Factory (A Firm) PC 27-Jul-1977
(Hong Kong) The buyer brought an action for damages for breach of a contract for the sale of goods. The measure of damages was the difference between the contract price and the market value of the goods at the relevant date. The evidence called at . .
Cited – Koch Marine Inc v D’Amica Societa Di Navigazione ARL (The Elena d’Amico) QBD 1980
The ship owners wrongfully repudiated a charterparty in March 1973, 14 months after its inception. The charterers did not hire a substitute but claimed damages for the loss of profits they would have made between January and April 1974, during which . .
Cited – Bem Dis A Turk Ticaret S/A Tr v International Agri Co Ltd; ‘SELDA’ ComC 31-Oct-1997
The seller had repudiated a CandF contract containing a GAFTA default clause, which did not include any provision allowing the recovery of expenses occasioned by the breach. The buyers made no claim for damages based on the difference between the . .
Cited – Novasen Sa v Alimenta Sa ComC 27-Feb-2013
Arbitration appeal raising issues concerning the construction and application of the FOSFA Prohibition and Default Clauses, and the relevance of subsequent events to the assessment of damages in accordance with common law principles. . .
Cited – Morris-Garner and Another v One Step (Support) Ltd SC 18-Apr-2018
The Court was asked in what circumstances can damages for breach of contract be assessed by reference to the sum that the claimant could hypothetically have received in return for releasing the defendant from the obligation which he failed to . .
These lists may be incomplete.
Updated: 17 July 2021; Ref: scu.549904