AVELLUM successfully
represented an Estonian company in GAFTA arbitration in a dispute regarding
debt recovery under swap contracts.
Swap contracts provide for
exchange of a floating price for a fixed price for the goods on a specified
date, which makes them an effective instrument of hedging the risks arising out
of market price fluctuations. Contrary to ordinary sale contracts of
agricultural products, swap contracts do not provide for the physical delivery
of the goods.
Swap contracts are frequently
used on financial markets. However, they are still on a beginning stage when it
comes to international trade of agricultural products in the Black Sea region.
AVELLUM is amongst the
pioneers of successful dispute resolution under swap contracts in GAFTA
arbitration. In their decision, the GAFTA Tribunal supported the claimant’s
position and awarded the debt under swap contracts in sum of around USD150,000,
as well as interest for the delay in payment.
Besides, AVELLUM has also
successfully continued the practice of dispute resolution under the simplified
procedure in accordance with GAFTA Arbitration Rules 126, which enabled the
claimant to obtain the arbitral award within the shortest time-period.
The AVELLUM team was led by partner Ivan Kasynyuk, with support
from senior associate Iurii Gulevatyi and associates Leila Kazimi and Victoriia
Tolochko.