- Offer and acceptance and trade custom applied to arbitration agreements (Black Sea Commodities v Lemarc Agromond)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Arbitration analysis: How does the basic contract law of offer and acceptance apply to arbitration agreements? Is it any different to normal? Sir Michael Burton GBE in Commercial Court said no in a challenge to two Grain and Feed Trade Association (GAFTA) arbitration awards under section 67 of the Arbitration Act 1996 (AA 1996). Second, can you imply an arbitration agreement into a contract by reason of a custom alone (absent any course of dealing)? In this case there was alleged to exist a custom that all contracts for the sale of Ukrainian corn in the Black Sea market provide for GAFTA arbitration in the form of the arbitration clause contained in the GAFTA 49 form. The court doubted the point as a matter of principle, but in this case decided no such custom was made out on the evidence. Written by Oliver Caplin, barrister at Twenty Essex and counsel to Black Sea Commodities.
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