Al Nasr CO for Coke and Chemicals v Fairdeal Supplies Ltd

Where an amendment agreement provides that it will become null and void if not executed, the parties generally revert to their rights and obligations under the original contract as they stood immediately before the amendment. Post-contractual variations, waivers and extensions are not automatically erased. A contract for sale remains alive for future performance where the contractual time for shipment has been waived or extended and performance has been suspended rather than extinguished. Repudiation before performance then entitles the innocent party to damages under section 51 of the Sale of Goods Act 1979.

Al Nasr appealed under section 69 of the Arbitration Act 1996 against an arbitral award of US$2,685,000 in favour of Fairdeal. The dispute arose from a contract for the sale of coke, later amended to provide for a single cargo and a revised shipment period.

The amendment stated that it would be null and void if it was not executed, and that the earlier contract would then be valid. The tribunal found that the original shipment periods had been varied or waived, that performance had been suspended, and that Al Nasr repudiated the contract in February 2008. The central issue was whether the parties reverted to the original contract as first made or as it stood immediately before the amendment.

1. The appeal was dismissed. The tribunal was right to find that the sale contract remained alive for performance and was repudiated by Al Nasr’s message of 4 February 2008.
2. Clause 7 of the amendment agreement meant that, if the amendment became null and void, the parties’ rights and obligations were assessed under the original sale contract as they stood immediately before the amendment. The parties therefore retained the benefit of earlier variations, waivers and extensions of the shipment periods.
3. That construction reflected the natural meaning of the agreement and made commercial sense. The amendment was intended to provide a mechanism for future performance, not to revive an already expired contract while disregarding agreed changes made before the amendment.
4. There was no conceptual difficulty in treating the shipment dates as waived or extended while leaving the contract alive. The analysis was consistent with Charles Rickards Ltd v Oppenhaim, under which a time condition may be waived and later reinstated by reasonable notice.
5. The buyer was consequently entitled to damages under section 51 of the Sale of Goods Act 1979, assessed by reference to February 2008, assuming that this was when the goods ought to have been delivered. The tribunal’s damages assessment by reference to October to December 2007 was mistaken, but the error operated in Al Nasr’s favour and Fairdeal did not seek an increase.
6. The second question concerning the effect of a non-compliant letter of credit required no separate consideration because the tribunal had found that a compliant credit had been opened, save for a defect caused by Al Nasr itself.

• Arbitral tribunal: awarded Fairdeal US$2,685,000 for repudiation of the sale contract. The award was amended by memorandum dated 28 February 2013.
• High Court (Commercial Court): dismissed Al Nasr’s appeal under section 69 of the Arbitration Act 1996.