Final Port of Discharge: Actual or Contractual? AWB (International) Ltd v Tradesmen International (PVT) Ltd [2006] VSCA 210

• Author: Kylie Weir
• Position: Kylie Weir will complete her LLB in 2007. Kylie was a student editor for 2006 / 2007
• Pages: 96-100

Final Port of Discharge : ac tual or contractua l?

AWB (International) Ltd v Trade smen Inte rnatio nal (PVT) Ltd [2006] VSCA 210

Kylie Weir∗

Fac ts

AWB (International) Ltd (the Appellant) contracted in writing to sell Tradesmen International (PVT) Ltd

(the Respondent) 150 000 tonnes ± 5% of bulk Australian Standard White Wheat (the Wheat) on cost and

freight terms (CFR) (the Agreement). Under the Agreement, dated 14 January 2004, the appellant was to

pay for and charter a vessel that would deliver the Wheat to Port Qasim or Karachi Port, Pakistan.

An arbitration clause contained in the Agreement stated, in summary:1

1. Any dispute should be referred to and finally resolved by Arbitration under the UNCITRAL

Rules.

2. Any notice alleging a dispute (including arbitration) must be made in writing and the claimant’s

arbitrator appointed within six months of the vessel arriving at the final port of discharge. If this

procedure is not followed the claimant waives their rights and no arbitration or litigation can

proceed.

The Wheat was shipped in four ships, the first, second and fourth of which were rejected by Pakistan

Quarantine Authority (Quarantine); the last, on 2 March 2004. Following the rejection of the Wheat by

Quarantine the Respondent wrote to the Appellant on a number of occasions:2

1. 26 February 2004 (First Notice) – this letter advised the Appellant of the first two rejections and

stated that while the Respondent would challenge the rejection, they would reserve the right to

recover damages from the Appellant in the case that the Wheat supplied deviated from the

specifications mentioned in the certificate provided by the Appellant.

2. 10 March 2004 – this letter asked for the Appellant’s assistance to re-sell the Wheat. Assistance

was provided and the Wheat was finally discharged on 7 April 2004 in Jakarta, Indonesia.

3. 2 September 2004 – this facsimile stated that further to the letter dated 26 February 2004 that the

Respondent hereby gave notice of arbitration under the terms of the Agreement and that Mr Bruce

Harris had been appointed as Arbitrator.

4. 13 September 2004 – this letter claimed to be a continuation of the letter dated 28 February 2004

and the notice of arbitration and specified ‘such details as are required as the next step’.3

The Appellant responded to communication no. ‘3’ by asking the Respondent to ‘clarify’ whether or not

arbitration was being commenced and asked them to clarify the ‘basis of [the] claim as [the] message [was]

unclear’.4

Both parties and the trial judge accepted that had the Respondent issued the last notice within the allocated

six month period, it would have been sufficient to avoid the time bar.

∗ Kylie Weir will complete her LLB in 2007. Kylie was a student editor for 2006 / 2007.

1 AWB (International) Ltd v Tradesmen International (Pvt) Ltd [2006] VSCA 210, [4].

2 Ibid [5].

3 Ibid.

4 Ibid.

(2006) 21 A&NZ Mar LJ

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