Alegrow SA v Yayla Agro Gida San Ve Nak AS

On an appeal under section 69 of the Arbitration Act 1996, the court may correct an error of law but must read the award fairly, commercially and with appropriate deference to a trade tribunal. A buyer who has waived or affirmed late delivery may restore time as essential by giving reasonable notice fixing a future delivery date. The buyer cannot treat the seller as in breach during that notice period, or for failing to provide information which the contract does not require. Renunciation requires words or conduct clearly indicating an intention not to perform. An appellate court cannot uphold an award on a new basis where the tribunal made no necessary findings of fact. The appeal was allowed and the award varied.

Alegrow appealed under section 69 of the Arbitration Act 1996 from an award of the GAFTA Appeal Board. The Board had held that Alegrow was in default for failing to provide, by 30 March 2017, a shipment schedule for outstanding rice, and that Yayla could terminate the contract.

The dispute concerned whether Yayla was contractually entitled to demand the schedule and whether Alegrow’s failure to provide it constituted repudiatory or renunciatory breach. Yayla alternatively sought to uphold the award on the basis of renunciation, including renunciation by silence.

1. Appeal allowed. The court varied the award to provide that Alegrow was not in repudiatory or renunciatory breach by failing to provide a shipment schedule by 30 March 2017, and that Yayla renounced the contract by its notice of arbitration.
2. Under section 69 of the Arbitration Act 1996, an award should be read in a reasonable and commercial manner, with the court striving to uphold it and avoiding minute textual analysis. Those principles do not permit the court to give an award a meaning plainly not intended by the tribunal. Appropriate deference is owed to a trade tribunal on matters involving trade practice or communications between trading parties.
3. Yayla’s conduct after the original shipment date had waived or affirmed the contract and meant that time was no longer of the essence. If its email of 29 March 2017 restored time as essential, it did so by fixing 15 April 2017 as the delivery date, provided that date was reasonable. Yayla could not treat Alegrow as in breach before that date for failing to provide a shipment schedule which the contract did not require.
4. The Appeal Board had made no finding that the contract contained, or that the circumstances implied, an obligation to provide a shipment schedule. Its finding that failure to provide the schedule by 31 March was a repudiatory breach was therefore legally erroneous. The Board also made no finding that the period to 15 April was reasonable for shipping the outstanding rice.
5. Renunciation requires words or conduct clearly indicating refusal or inability to perform, or conduct which would lead a reasonable person to conclude that the party no longer intended to be bound. The Board had not addressed renunciation, and the case had not been advanced on that basis before it. The court could not uphold the award on that alternative ground without the necessary factual findings, including findings about all oral and written communications.
6. Silence can amount to renunciation in an appropriate context, but the authorities relied on involved additional conduct making the silence unequivocal. Here the last recorded communications indicated an intention to perform. The facts did not establish renunciation by silence.
7. The award was remitted only as to Alegrow’s counterclaim on liability and quantum. Further argument was required on whether any independent claim by Yayla for simple breach could properly be remitted.

The judgment does not state any prior court judgment. The appeal was brought under section 69 of the Arbitration Act 1996 from Appeal Award No. 4539 of the GAFTA Appeal Board, with permission granted by Teare J.