GAFTA Seller's Truly ‘Golden Victory’: Supreme Court Reduces Damages From US$3 Million to US$5

    View Author July 2015
    On consideration of the GAFTA Form 49 default clause, the Supreme Court unanimously held that the clause was not a complete code covering the entire field of damages. As such and in accordance with the compensatory principles set out in Golden Strait Corporation v Nippon Yusen Kubishika Kaisha [2007] 2 AC 535 (“The Golden Victory”), Buyers were not entitled to recover substantial damages for Sellers’ breach of contract where no loss had actually been suffered.   

    The dispute related to the proper construction of the Default Clause in GAFTA Form 49. GAFTA Form 49 is the standard form of FOB sale contract of the Grain and Feed Trade Association for goods delivered from Central or Eastern Europe in bulk or bags. The significance of their lordships unanimous decision, however, is much wider in scope and extends to the interpretation of express damages clauses in any commodities or other commercial contract.