High Court clarifies competing arbitration clauses and contractual waiver in CAFI – Commodity and Freight Integrators DMCC v GTCS Trading DMCC [2025] EWHC 1350 (Comm)
Authored by Joelle Bisimwa, Associate, and Hannah Jones, Legal Director.
Judgment has been handed down on 3 June 2025 in CAFI – Commodity and Freight Integrators DMCC v GTCS Trading DMCC [2025] EWHC 1350 (Comm) (“CAFI v GTCS”) clarifying the interaction of waiver of contractual rights and competing arbitration jurisdiction clauses. The judgment considers CAFI’s challenge to a Grain and Feed Trade Association (“GAFTA”) arbitration award under sections 67, 68, and 69 of the Arbitration Act 1996 (the “Act”). In a rare outcome, the High Court allowed the challenge under all three appeal avenues.
Background
The dispute concerned the sale of 28,000 MT of Russian milling wheat under two contracts between CAFI as buyer and GTCS as seller. The first contract, dated 11 March 2022 with a contract price of USD465/MT, contained a GAFTA arbitration providing that “[a]ny dispute arising out or under this contract shall be settled by arbitration in accordance with Arbitration Rules N.125 of the Grain and Feed Trade Association, in the edition current at the date of this contract. Such Rules forming part of this contract and of which both parties hereto shall be deemed to be cognizant. Demurrage/ Dispatch / Detention/ Laytime disputes for the port of discharge could be submitted, at Sellers’ option, to the LMAA arbitration, according to LMAA Terms (2017) or, in disputes up to 100,000 USD, to LMAA Small Claims Procedure (2017).” The clause provided for the seat of arbitration to be in London, England.
On 21 March 2022, when the cargo assigned to the first contract arrived in Egypt, CAFI informed GTCS that it could not make payment due to US sanctions against Russia – a position that GTCS disputed. On 23 March 2022, GTCS sought to terminate the first contract on grounds of anticipatory breach. In response, CAFI cited a term of the first contract which excused non-performance due to sanctions.
On 28 March 2022, CAFI and GTCS entered into a second contract which included a termination clause concluding the first contract (the “Termination Clause”). The second contract was also for the sale of 28,000 MT of Russian milling wheat but at a lower purchase price of USD440/MT. It also included an arbitration clause in the same terms as the first contract.
The second contract was performed, however GTCS brought a claim for damages against CAFI for the difference in purchase price.
Proceedings
GTCS commenced a GAFTA arbitration against CAFI for repudiatory breach of the first contract. This required consideration of the second contract, and whether GTCS had waived its right to claim damages under the first contract by the Termination Clause. The GAFTA First-Tier Tribunal (the “Tribunal”) dismissed GTCS’s claim on the basis that the Tribunal did not have jurisdiction to consider the second contract in circumstances where the arbitration was commenced under the first contract, and the second contract was a ‘stand-alone agreement’ with a separate arbitration clause.
GTCS appealed the Tribunal’s decision to the GAFTA Appeal Board (the “Appeal Board”) who reversed the decision, ordering CAFI to pay damages to GTCS in the amount of USD700k (the “Appeal Award”).
CAFI then commenced the current proceedings in the High Court, challenging the Appeal Award under ss67, 68 and 69 of the Act.
Judgment
The High Court allowed CAFI’s challenges to the Appeal Award under Sections 67, 68 and 69 of the Act, as follows:
Section 67 – Substantive jurisdiction
CAFI argued that the Appeal Board was wrong to decide that it had no jurisdiction to interpret the terms of the second contract, or how they impacted on the first contract, and that the arbitration agreement in the first contract was sufficiently wide to encompass the issue of waiver under the second contract.
The Court allowed the Section 67 challenge, finding that the Appeal Board did have jurisdiction to consider the impact of the Termination Clause on the first contract, and that the arbitration agreement in the first contract was able to deal with the wider dispute.
Section 68 – Serious procedural irregularity
CAFI argued that it was a serious irregularity for the Appeal Board to have held CAFI liable for damages notwithstanding that there was a live issue as to whether CAFI’s liability for damages was extinguished by the second contract.
The Court found that the Appeal Board, by deciding that it did not have jurisdiction to consider the second contract, but proceeding to award damages against CAFI, caused a serious procedural irregularity resulting in substantial injustice. Accordingly, the Court allowed the challenge under Section 68 of the Act.
Section 69 – Error of law
CAFI submitted that it was an error of law for the Appeal Board to determine liability for damages in circumstances where it had not determined the issue of whether the Termination Clause extinguished CAFI’s liability for damages under the first contract.
The Court allowed the challenge under Section 69 of the Act, finding that there was an obvious error of law by the Appeal Board in awarding damages against CAFI when it had not determined this issue.
Accordingly, the Court determined that that the Appeal Award should either be set aside or varied insofar as it addresses the issue of contractual waiver and the damages awarded against CAFI.
Conclusion
The decision in CAFI v GTCS is welcomed and reassuring for commercial trading parties, providing clarification that where parties have a contractual dispute, they will not be required to commence multiple arbitrations simply due to a variation to or waiver of an earlier contract. Instead, where faced with competing arbitration clauses, a party (or the court or tribunal) may choose which clause to invoke, and can interpret the terms of the contract in light of the transaction as a whole, to include earlier agreements.
For more information, please contact Joelle Bisimwa and Hannah Jones
Rosenblatt has a dedicated international arbitration team. For arbitration enquiries, please contact Rosenblatt’s Co-Heads of International Arbitration, Sara Paradisi or Dr. Leonardo Carpentieri
August 2025