The Relevant Facts. Sellers sell + Buyers buy 15,000 mts of Cottonseed Expellers at USD300 per metric ton (pmt) for shipment March/April 2021 CIF Rotterdam. Payment by confirmed irrevocable Letter of Credit. No specific date is given by which the L/C is to be opened.
On 2 March 2021, Sellers, represented by experienced UK lawyers, place Buyers in breach of contract for failing to open a L/C + claim damages of $10 pmt arguing that the market price on 2 March 2021 had fallen to $290. Buyers, from Armenia and acting on their own account, reject Sellers’ claim on the grounds that the market price had risen to $310 and Sellers should have sold the cargo at a profit, not a loss.
The dispute comes before you as Chair of a Tribunal of three arbitrators – the two wingers being party appointed. It is a document only arbitration. No hearing.
You spot an issue as soon as you read the papers. Did Sellers jump too early? Was there still time for Buyers to open a contract conforming L/C. You look at the contract closely to see if time is made of the essence for the opening of the L/C. There is no such time limit in the Contract. You then scour the email exchanges between the parties to see if there is a reference, even an agreement, that provides a date by which the L/C has to be opened. Again – there is none. You scrutinise the submissions to see if there is an argument about a deadline by which the L/C is to be opened. Neither Sellers nor Buyers mention the issue.
It occurs to you – “have Sellers placed Buyers in default for not opening the L/C when Buyers still had time to open the L/C?” The shipment period was March/April. What is the last date by which an L/C has to be opened?