Lloyd's Law Reporter


[2019] EWHC 1118 (Comm), Commercial Court, Queen's Bench Division, Mr Justice Popplewell, 3 May 2019

Contracts (sale of goods) - Invoice and payment email communications manipulated causing payment to wrong account and shortfall in payment - Arbitration - GAFTA form 119

By an arbitration award dated 2 October 2018, the GAFTA Board of Appeal ordered K, the claimant, to pay to A, the defendant, US$161,616.93 plus interest as the balance of the price due from K as buyers of a cargo of sunflower meal under a contract of sale dated 16 September 2015. The shortfall had arisen out of complications in the payment to A's bank following the hacking of email accounts by a fraudster and forged payment instructions which gave details of a fraudulent account with the same bank for payment. K paid to that account before the fraud was discovered. When the funds were repaid upon discovery, there was a shortfall due to fluctuations in exchange rates. A claimed the shortfall in arbitration and the GAFTA Board of Appeal gave an award in its favour. K sought to challenge the award under sections 67, 68 and 69 of the Arbitration Act 1996. It argued that its contractual obligation was merely to pay to the bank, which had been done.

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