Pioneer Freight Futures Company Ltd (In Liquidation) v Cosco Bulk Carrier Company Ltd [2011] EWHC 1692 (Comm)

Forward Freight Agreements – Automatic Early Termination – Interpretation of 1992 ISDA Master Agreement

Raveena M Tamoria, PhD Candidate, University of Southampton Law School

Introduction

This case involves the claimant Pioneer Freight Futures Company (Pioneer), which is a company incorporated in the British Virgin Islands and now in liquidation since December 2009, bringing a claim against the defendant Cosco Bulk Carrier Company Limited (Cosco). Pioneer entered into a series of 11 forward freight agreements (FFAs) with Cosco; in seven Pioneer was the seller and in four it was the buyer. All the FFAs followed the standard 2007 Terms of the Forward Freight Agreement Brokers Association (FFABA). Those FFAs made in 2007 which were originally on the 2005 FFABA Terms were subsequently amended when the first 2008 FFA was made in June 2008, thereby placing them on the 2007 Terms. The 2007 Terms incorporated by reference the International Swap Dealers Association (ISDA) 1992 Master Agreement (the master agreement).