Jurisdiction(s):
United Kingdom

UKSC on s69 Arbitration Act jurisdiction and GAFTA Default Clause damages: strict appellate limits; default price assessed by reference to ex warehouse market – Sharp v Viterra [2024] UKSC 14

Published on: 11 June 2024

Published by a LexisNexis Arbitration expert

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Sharp Corp Ltd v Viterra BV (previously known as Glencore Agriculture BV) [2024] UKSC 14

What are the practical implications of this case?

The Judgment offers clear confirmation of key principles underlying AA 1996, s 69. Delivering the leading Judgment, Lord Hamblen emphasises the restricted nature of any right of appeal under the Act, together with the strong policy justifications for that restriction. The court’s conclusions also reflect the overarching tenet in AA 1996, s 1(c) that judicial involvement in arbitration should be confined to circumstances where it is truly required. Practitioners are likely to appreciate the Supreme Court’s additional guidance on the Gafta Default Clause, whose construction has long divided the arbitration community. In Bunge v Nidera BV [2015] UKSC 43, the Supreme Court stated that the compensatory aim of the law of damages is normally realised by contrasting the contract price with the price that would have been struck under a hypothetical substitute contract on identical terms, save as to the market price of the goods (para [14]). Where there exists an available market for a genuine substitute contract, that remains the proper yardstick for assessment. It confirms that, where such a market exists, this remains correct approach...

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