SOUFFLET NEGOCE SA V BUNGE SA

[2010] EWCA Civ 1102, Court of Appeal, Civil Division, Lord Justice Longmore, Lord Justice Wilson, and, Lord Justice Toulson, 13 October 2010

Sale of goods - Delivery of feed barley to take place fob vessel - Sale contract required vessel to be "presented at loading port in readiness to load" - Vessel presented with dirty holds - Seller refused to load - Whether contract required vessel to be fit to give notice of readiness under voyage charterparty or just physically and legally ready to load - GAFTA 49

Soufflet Negoce was the seller (S) and Bunge was the buyer (B) under a contract of sale fob Nikotera, Ukraine of a consignment of feed barley with delivery on any of 14 consecutive days. The contract was on GAFTA form 49 terms. There were provisions for laytime which expressly required the valid tender of a notice of readiness and a provision stating: "All other terms and conditions as per relevant C/P". To perform the sale contract, B would need to enter into a charterparty. The sale contract entitled B to recover from S demurrage incurred under the charterparty if loading exceeded the time stipulated in the charterparty. In arbitration, B claimed damages for failure to load the cargo. The vessel had given notice of readiness to load on the last day of the delivery period. S contended that on that day, the holds were unclean and thus not presented "in readiness to load" during the delivery period. B disputed this and called upon S to load after the 22 October. The refusal of S to do so was treated as repudiatory by B. The case was heard by a panel of arbitrators and then by the GAFTA Board of Appeal. S argued that the degree of readiness required was such that the vessel should be ready to load in all respects as would permit a valid notice by a shipowner to a voyage charterer for the commencement of laytime. B argued that the degree of readiness required was such that it was physically and legally possible for the sellers to load even if the circumstances did not justify the shipowner giving such notice. The GAFTA Board of Appeal gave award for B. S's appeal was dismissed by David Steel J (reported at [2010] 1 Lloyd's Rep 718). This was S's appeal against that judgment. The question upon appeal was whether the GAFTA form requirement that the seller was entitled to complete loading, provided it had presented a ship ready to load within the contractual delivery period, implied that the ship must be ready to load per the common law requirement that she be physically and legally ready to load, or whether the GAFTA clause implied readiness per the charterparty, namely that she was fit to give notice of readiness.