GOOD MORNING FROM LONDON

01 APRIL 2024

BEING AN ADVOCATE – EPISODE 4

EPISODE 3 CONCLUDED;

“Preparation is one thing and much of what has been said hitherto is self-evident. In the next episode the focus is on moral challenges that can confront an advocate. Again, it happens to every advocate at some time in their career. A challenge that discomforts us – compels the advocate to think about what is right and what is wrong.”

You are the advocate for a party to a contract for agricultural produce. Your party (the Seller) failed to perform and is liable in damages for failing to ship the goods within the shipment period which was the month of January 2023. The Seller had agreed to sell and the Buyer had agreed to buy 5,000 mts of the produce for shipment in January 2023. Your client was in breach of contract on 1 February 2023

There is no dispute between the parties that the Seller failed to perform the contract and is liable in damages to the Buyer – the market price for the contract goods on the 1 February 2023 being higher than the contract price – but by how much? The task of the Tribunal is to determine the value of the contract goods on 1 February 2023.

The parties are agreed that the date of default – the first business date following the last date when your client was contractually bound to ship the contract goods – is 1 February 2023. The measure of damages – to which the Buyer is entitled – is the difference on 1 February 2023 between the contract price of the agricultural produce and the market price of the agricultural produce on 1 February 2023

The contract price is $350 per metric ton. The dispute between the Seller and the Buyer relates to the market price for the contract goods on 1 February 2023. If the arbitrators after hearing submissions and evidence from the Seller and the Buyer decide that the market price on 1 February 2023 is, for example, $1000 per metric ton then your client, the Seller, will have to pay the Buyer a sum equal to 5,000 mts multiplied by $650 being the difference between the market price on 1 February 2023 ($1,000 per metric ton) and the contract price ($350 per metric ton.) – damages being $3.25m The key issue for the arbitrators is to decide what is the market price on the 1 February 2023.

The arbitrators will consider the evidence. This can be, first, market reports by companies specialising in providing market information about the contract goods; second, statements (even oral testimony) submitted by brokers and traders orally at the Hearing or in writing; thirdly, copies of contracts evidencing the market price on dates at or around 1st February 2023. The arbitrators may rely on their own knowledge of market prices in which case they need to disclose at the Hearing how they came by the information.

Your task as advocate for the Seller is to persuade the arbitrators on the basis of evidence provided by the Seller that the market price of the agricultural product is $750 pmt, thereby conceding damages of USD2m.

The Buyer’s advocate has done his homework and provided a schedule of market information to show that the market price on 1 February 2023 was $1000 leading to damages of $3.25m. The Seller’s evidence is less substantial consisting of a contract of quite similar goods dated the 30 January 2023 with a market price of USD 750 pmt.

You have a problem. How do you handle it?

EPISODE 4 – Awkward Moments for An Advocate