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.