ADM Industries Centers Ltd (trading as ADM Israel) v Inerco Trade SA

Under GAFTA Form 48 clause 20, “unforeseeable” means a risk whose probability, assessed when the contract is made, is so remote that it is negligible in commercial terms. The inquiry is contextual and may concern a prolonged interruption rather than the underlying event generally. An arbitrator’s evaluative conclusion is not an error of law where the correct test was applied and the conclusion was rationally open.

The notice requirement in clause 20(2) is a condition precedent. Late notice is not excused by absence of demonstrated prejudice. If the award does not determine when the force majeure event began, the issue should be remitted rather than decided by the court. A clause 20 extension does not prevent a seller using clause 10; the clause 10 notice may be served by the first business day after the period as extended under clause 20.

ADM Industries Centers Ltd (trading as ADM Israel) v Inerco Trade SA concerned the sale of Ukrainian corn under a contract incorporating GAFTA Form 48. The shipment period was 15 April to 15 May 2023. During the Black Sea Grain Initiative, Russian inspectors stopped processing inbound vessels. The sellers invoked clause 20, treated the buyers’ rejection as renunciation, and obtained a GAFTA Board of Appeal award of USD 3.12 million.

The claimant appealed under section 69 of the Arbitration Act 1996 on three points: the meaning of “unforeseeable”; whether clause 20 notice was a condition precedent; and whether clause 10 could extend performance beyond clause 20. The court considered whether the award contained errors of law and what remedy followed.

Disposition. The court held that the Board of Appeal made one error of law concerning the clause 20 notice requirement. The award was remitted for a finding on whether the notice was timely. The conclusions on foreseeability and the interaction between clauses 10 and 20 were confirmed.

1. Section 69 and construction. Under section 69 of the Arbitration Act 1996, the court determines questions of law while the arbitrators determine facts. Where construction requires evaluative judgment, the court identifies the correct legal test and should not substitute its own assessment for a rational conclusion reached by a properly directed tribunal. If misdirection leaves the outcome uncertain, remission is ordinarily appropriate. Contractual meaning is assessed objectively, having regard to the reasonable reader, available background and practical commercial implications, as summarised in Providence Building Services Ltd v Hexagon Housing Association Ltd [2026] UKSC 1.
2. Clause 20(1)(k). The approach in Overseas Tankship (UK) Ltd v The Miller Steamship Pty Ltd (The Wagon Mound) (No 2) [1967] AC 617 (PC) was context-specific to tort. The clause required a different commercial assessment. “Unforeseeable” meant a probability, assessed when the contract was made, so remote that it was negligible in commercial terms. It did not mean merely possible or simply unlikely. The distinction between unlikely and negligible was supported by Koufos v C Czarnikow Ltd (The Heron II) [1969] 1 AC 350 (HL). The Board correctly assessed the prolonged interruption, rather than short interruptions generally, and its conclusion was rationally open on the facts. Criticisms of its statistics and use of later events disclosed no error of law.
3. Notice. The words “provided that” in clause 20(2), together with the commercial purpose of prompt notification, made timely notice a condition precedent. The clause contained no substantial-prejudice qualification. The Board had not decided whether the relevant unforeseeable event began on 7 May or 9 May 2023. Applying Sharp Corp Ltd v Viterra BV [2024] UKSC 14, the court could not infer the date unless it inevitably followed from the findings. The matter was therefore remitted. If the event began before 9 May, clause 20 was never validly invoked.
4. Clauses 10 and 20. The court provisionally refined the question of law to reflect the argument actually advanced, consistently with Cottonex Anstalt v Patriot Shipping Mills Ltd [2014] EWHC 236 (Comm) and [2024] UKSC 14. “Originally stipulated period” in clause 10 meant the period extant before any extension under clause 10. Where clause 20 had extended the shipment period, that extended period was the relevant period for clause 10. A clause 10 notice could therefore be served by the next business day after that period ended.

1. High Court (Commercial Court) — On an appeal under section 69 of the Arbitration Act 1996, the court remitted the award for determination of the clause 20 notice issue and otherwise confirmed the Board’s conclusions: [2026] EWHC 1873 (Comm) .
2. GAFTA Board of Appeal — The Board allowed the sellers’ appeal from the first-tier arbitration, awarded USD 3.12 million and costs, and held that clause 20 applied.
3. First-tier GAFTA arbitration — The tribunal held in favour of the buyers, finding that the sellers had not established entitlement to rely on force majeure.