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AVELLUM successfully represents the client in GAFTA appeal

The GAFTA Board of Appeal satisfied in full the Client’s claim of approximately $150,000 (USD) seeking compensation for damages specified in a washout agreement that were caused by the failure to comply with the contract.

A washout agreement is a settlement agreement by which a party seeks to terminate the contract, without declaring a default, with compensation paid by the party who refuses to fulfil the contract. Typically, the compensation is the difference between the contractual price of the goods and the market price of the goods on the day of such a refusal.

The question of whether the parties concluded a washout agreement arises more and more often in trade disputes and has become the “cornerstone” of the case.

Iryna Moroz, partner of AVELLUM, commented as follows: “Our biggest challenge was that the parties discussed the agreement verbally through brokers. In addition, there were no formal labour or contractual relations between the representative of the counterparty and the company represented by him. These circumstances served as a ground for the counterparty to challenge the conclusion of the contract.

However, English law is flexible as to the form of a contract, which can be concluded either verbally or in writing using all possible means of communication. The authority of the company’s representatives is presumed in English law. That is why the existence of formal labour relations or other corporate restrictions in no way affects the possibility of concluding a contract.”

The AVELLUM team successfully proved that the parties had actually agreed the washout agreement verbally through the broker. Furthermore, arbitrators confirmed the general position of English law that any person who represents a company may enter into a contract, regardless of his or her position in the company and the existence of formal labour relations.

The AVELLUM team was led by partner Iryna Moroz with support of senior associate Dmytro Koval.

AVELLUM advises on large infrastructure financing deal

AVELLUM acted as the Ukrainian legal counsel to the European Bank for Reconstruction and Development (“EBRD”) in connection with a senior secured loan of up to EUR2.6 million to Negabarit-Service LLC (“Company”), a Ukrainian leader in the oversized and complex auto cargo transportations.

The loan will help financing the Company’s investment programme for the acquisition of up to 42 trucks equipped with advanced GPS systems and 18 trailers. Industrial customers across Ukraine and the EU will have access to a wider range of oversized cargo transport services following the transaction.

The new trucks will decrease the Company’s operating costs by at least 30% due to a reduction in fuel consumption and maintenance expenditure. The new vehicles will be compliant with EURO-6 or higher emissions standards, which will help decreasing nitrogen oxide (NOx) emissions by 80% and carbon oxide (CO) by 22%.

The EBRD is the largest international investor in Ukraine, which has provided almost EUR13.1 billion to fund approximately 418 projects since 1993.

The AVELLUM team was led by senior partner Glib Bondar with support from counsel Maria Tsabal and associates Oleksandra Kupriichuk and Anna Kalabska.

If you would like to get more information, please visit https://avellum.com/en