The story so far. Sellers sued Buyers for failing to open a Letter of Credit within the time permitted by the contract. The Board found in favour of Buyers. Sellers jumped too soon. Time was not of the essence. Buyers did have to open an L/C but no time limit was stipulated. Sellers claim failed as the time permitted to Buyers was unreasonably short. Sellers were in breach. Buyers’ counterclaim for Sellers’ breach succeeded
Now to damages. The market was turbulent. Sellers argued that the market had fallen and had claimed damages on the basis that the market price on the date of default was less than the contract price. Buyers argued that the market had risen and claimed damages on the basis that the market price on the date of default was higher than the contract price.
The Board reviews the market evidence from both sides including brokers’ reports; official statistics from trade associations; anonymised contracts and exceptionally the Board hears oral evidence presented by both sides from market leaders. It quickly becomes apparent that the market had risen and Buyers would be awarded considerable damages. You wonder to yourself why Sellers initiated the arbitration – these commercial oddities occur, you conclude.
On examining the broker’s evidence you spot something odd in Buyers’ documents – some numbers appear to have been adjusted even altered. The fonts have changed. You mention this on WhatsApp to your fellow arbitrators. The hearing is paused. The Board members pull out their magnifying glasses and on three documents in particular they see something suspicious. A Board discussion ensues. What To Do Next?
The Board has options – it decides to adjourn the hearing and inform the parties that they will consult typing experts. Wrong. The Board, first, has to bring their concerns to the attention of the parties and invite comments. Sellers, themselves slow to spot the alleged adulteration suddenly realise they might have a way to avoid all damages and turn up the heat. Buyers, by comparison, are quiet, embarrassed and ask for time to consult their own expert.