CL-2024-000080 - [2025] EWHC 1350 (Comm)

INTRODUCTION

This is a challenge to a Grain and Feed Trade Association (GAFTA) Appeal Award, brought under section 67 (substantive jurisdiction) and/or section 68 (serious procedural irregularity) of the Arbitration Act 1996. In addition, the Claimant seeks leave to appeal on a point of law pursuant to section 69 of the Act.

The present Defendant (“GTCS”), as seller of a cargo of Russian milling wheat, brought an arbitration claim for damages for breach of contract against the present Claimant (“CAFI”) as buyer of the cargo. The claim was rejected by the GAFTA First-Tier Tribunal. However, by the Appeal Award, a panel of five arbitrators reversed that decision and ordered CAFI to pay GTCS damages of US$ 700,000 plus interest, fees and costs.

At the permission stage, GTCS applied for an order striking out the section 67 and 68 challenges on paper. After considering the papers, on 15 July 2024 HHJ Pelling KC ordered that CAFI’s application for permission to appeal under section 69 should be determined, together with any application to strike out the section 67 and 68 challenges, at an oral hearing. The parties subsequently agreed that CAFI’s application for permission to appeal under section 69 should be listed at the same time as the section 67 and 68 challenges (and any application to strike out those challenges), with the substantive section 69 appeal to be determined at the same hearing if permission were granted.

For the reasons set out below, I have concluded that CAFI’s challenges to the Appeal Award under sections 67 and 68 succeed, as does one of its heads of challenge under section 69. At least the portion of the Appeal Award addressing the waiver issue and the award of damages must be set aside. I shall hear counsel on the appropriate disposal of the matter. It may be appropriate for the waiver, damages and related issues to be remitted to a differently constituted Appeal Board for redetermination in the light of the contents of this judgment: though (subject to any time bar objection) a viable alternative might be to leave the issues to be resolved by the GAFTA First Tier Tribunal pursuant to the second arbitration which CAFI has commenced as mentioned later in this judgment.