BC Law is pleased to announce a significant success before the GAFTA Board of Appeal in Appeal Award issued on 2 December 2025. Acting for the Buyers/Appellants, our firm successfully overturned a First-Tier award that had previously found the Buyers in default and ordered them to pay over USD 2.2 million in damages, expenses and interest.
The Appeal Board set aside the First-Tier award in full, finding instead that it was the Sellers who were in default, having wrongfully and prematurely terminated the contract in breach of English law and the GAFTA contractual framework.
This is a substantial decision on the proper operation of Section 10 of the Sale of Goods Act, time of the essence, and the doctrines of waiver and contractual estoppel, all of which the Board analysed in depth.
Background
The dispute arose under an international contract of sale for 30,000 MT of corn stored in a bonded warehouse. A First-Tier GAFTA Tribunal had found the Buyers in default for non-payment and awarded the Sellers over USD 2.2 million in damages.
On appeal, BC Law argued that:
- the Buyers made genuine payment attempts that were rejected due to Sellers’ banking issues, and
- in any event, the Sellers’ termination on 26 April 2023 was unlawful as a matter of English contract law because it occurred before the expiry of the Sellers’ own deadline and contrary to the contractually-agreed grace period.
The Appeal Board agreed with the latter, finding this issue alone to be dispositive.
Key Findings of the Appeal Board
1. Premature Termination: A Clear Repudiatory Breach by the Sellers
The Sellers sent a notice on 24 April 2023 granting the Buyers “2 labour days” to make payment. Under English law (Benjamin’s Sale of Goods), when a party is given a number of days to perform, the recipient has until midnight of the final day.
Therefore:
- “Two labour days” from 24 April expired at midnight on 26 April 2023.
- The Sellers terminated the contract at around noon on 26 April.
This meant the Sellers repudiated the contract before their own deadline had expired, a textbook example of anticipatory breach.
The Board held this error fundamental, and sufficient by itself to set aside the First-Tier award.
2. The Contract Required a Mandatory Three-Business-Day Grace Period
Crucially, the contract expressly stated (reflecting Section 10 SGA):
- time is of the essence, but
- the right to terminate only arises after “more than three (3) business days” of payment delay.
The Board found these to be interdependent contractual conditions, neither could be ignored.
Even if the Sellers’ deadline had expired at midnight 26 April, the grace period would have extended the earliest lawful termination date to 2 May 2023.
By terminating on 26 April, the Sellers acted six days too early.
3. Waiver Through Conduct: Sellers Could Not “Blow Hot and Cold”
The Buyers’ down payment was initially due 22 February 2023, yet the Sellers:
- allowed more than two months to pass,
- continued to request payment,
- performed their own obligations (delivering goods into bonded warehouse),
- extended deadlines (10 April and 24 April),
- and never communicated that time remained strictly essential.
Under English law, such conduct constitutes a waiver of strict contractual timing. Once a party has waived a time stipulation, it cannot later rely on earlier delays as grounds for termination without first reinstating time by reasonable, unequivocal notice.
The Board held:
- The Sellers’ 24 April notice did not satisfy the legal requirements for reinstating time of the essence.
- Their subsequent conduct terminating before the deadline showed they did not themselves treat the deadline as essential.
A party who has waived strict compliance cannot subsequently “snap back” to strict rights without proper notice. The Sellers attempted to do precisely that.
4. Estoppel Arguments Were Not Determinative
The Buyers advanced detailed estoppel arguments. The Board noted that, although detrimental reliance was only partially demonstrated, it did not need to decide the estoppel point.
The appeal succeeded on pure contractual interpretation, timing, and waiver principles, objective matters of law that did not require proof of reliance.
Outcome:
The Appeal Board ordered:
- The First-Tier award in favour of the Sellers SET ASIDE IN FULL.
- No damages and no interest were payable by the Buyers.
- Buyers remain liable only for the First-Tier costs (due to their earlier non-participation).
- The Sellers must pay all costs of the Appeal.
This is a complete substantive victory for the Buyers and for BC Law as their legal representatives.
What This Decision Means for the Trade
The Award reinforces several important points for GAFTA traders and practitioners:
1. Deadlines must be interpreted strictly under English law. If a party offers “two days”, they must give the other party the full two days.
2. Contractual grace periods cannot be ignored. If the contract gives additional protection (e.g., three business days), a party cannot strip that protection away when issuing a notice.
3. Waiver operates through conduct, not formality. A party who tolerates delays cannot suddenly terminate without first reinstating strict compliance.
4. Premature termination = repudiatory breach. Even if the other side is late in payment, terminating too early reverses the roles and places the terminating party in breach.
5. GAFTA tribunals will scrutinise timing with precision. The Board applied English law principles rigorously and overturned a First-Tier award because the Sellers “jumped the gun”.
Conclusion
This appellate victory demonstrates BC Law’s ability to dissect complex chains of events, identify decisive errors in contractual interpretation, and present compelling legal arguments before international tribunals.
The GAFTA Appeal Board’s decision confirms that timing, notice, and waiver principles under English law are not merely technicalities, they determine outcomes.
BC Law is proud to have secured this important result for our client and to contribute to the development and clarification of contract law in the international grain and feed trade.