Zenziper Grains And Feed Stuffs v Bulk Trading Corporation Ltd

Under an FOT contract for imported goods, where delivery may take place at one of several ports or places in the country of destination, the seller must select and notify the delivery place unless the contract provides otherwise. The buyer’s duty to nominate collecting vehicles and arrange collection arises afterwards. An FOT contract of this kind is not analogous to an FOB contract for loading at the country of origin. Courts reviewing trade arbitration awards should give appropriate weight to arbitrators’ understanding of commercial practice.

The parties contracted for the sale of American corn on FOT terms, for importation by the sellers into Israel. The contract did not specify the delivery place, and several silos at different ports could have been used. The buyers repeatedly sought information about where the corn would be available, but the sellers did not provide it. The buyers eventually treated the sellers’ conduct as repudiation and claimed damages.

The GAFTA Board of Appeal held that the sellers had to nominate the delivery place before the buyers had to nominate trucks. On appeal under the Arbitration Act 1979, Moore-Bick J reversed that decision, reasoning by analogy with FOB contracts. The central issue was which party had the right and duty to nominate the place of delivery.

1. Appeal allowed. Potter LJ’s judgment was unanimously adopted by Hale LJ and Thorpe LJ. The judge’s order was set aside and the GAFTA Board of Appeal’s award was restored.
2. An FOT contract for imported goods delivered at one of several ports or places in the country of destination is not analogous to an FOB contract under which the buyer selects the loading port. The practical allocation of responsibilities is materially different.
3. The sellers therefore had the prior obligation to select and notify the delivery place. The buyers could not reasonably be required to nominate trucks or arrange collection without knowing where delivery was to occur.
4. The payment provision requiring notification that the quantity was at the port concerned payment and confirmed only that delivery was to be at a port. It did not determine which party had to nominate the delivery place.
5. The judge was wrong to disregard the commercial understanding of the GAFTA arbitrators. If further findings had been needed, the award could have been remitted for further reasons under section 1(5) of the Arbitration Act 1979.
6. Incoterms did not materially assist. The FCA and DDP terms addressed different or incomplete allocations of responsibility, and FOT was not defined by Incoterms.

• High Court of Justice, Queen’s Bench Division, Commercial Court: Moore-Bick J allowed the sellers’ appeal from the GAFTA Board of Appeal’s award.
• Court of Appeal (Civil Division): The buyers’ appeal was allowed. The judge’s order was set aside and the GAFTA award was restored.