As Singapore commodities lawyers, PDLegal has extensive experience in advising clients on disputes arising from the international sale of goods. We have advised on transactions arising from various types of commodities including coal, iron ore, nickel as well as liquid cargoes like gasoil and chemical products. Our international trade practice ranges from advising clients on disputes arising from the formation and validity of contracts, force majeure, demurrage claims, documentary credit as well as quality disputes.

What can PDLegal help you with?

PDLegal is a law firm in Singapore that specializes in commodities with a team of experienced lawyers who can help you with a wide range of issues, including:

1. Formation and Validity of Contract

When trading in physical cargoes like coal, iron ore and gasoil, it is very usual for traders to send bids or offers to their counterparties setting out only the main terms, and for negotiations to be carried out on those main terms only. Often, the main terms are agreed first before the formal contract document containing the rest of the terms is exchanged and signed by the parties.

At PDLegal, we are often faced with cases where parties may have agreed on some of the terms but not the others, or when the main terms are agreed but the contract is eventually not signed, and we are asked to advise on whether the contract has been formed, or whether there are any issues affecting the validity of the contract.

2. Force Majeure

Force majeure is a term that every trader would have encountered in the course of his trades. In the coal trade for example, supplies may be disrupted whenever there is severe flooding in Kalimantan causing the mines to flood, or when the roads leading to the port were damaged.

However, not every instance when the supplies are disrupted will constitute a force majeure event as very much depends on the words used in the force majeure clause. Further, the disruption of supplies from one mine may not render performance by the supplier impossible as the supplier may potentially obtain supplies from other sources, albeit at a higher cost.

As commodities lawyers, PDLegal advises on issues on force majeure on a very regular basis and is able to provide timely and practical advice to our clients.

3. Demurrage Claims

Demurrage claims are very common between shipowners and charterers. These claims are equally common between buyers and sellers as the laytime and demurrage clauses in the charterparties are replicated in the sale and purchase agreements as a way to allocate risks arising from delays in loading or discharging.

While the principles on laytime and demurrage is largely identical whether it is contained in a charterparty or a sale and purchase agreement, it is often the case that the laytime and demurrage clause in the charterparty and the sale and purchase agreement do not mirror each other. In an FOB sale contract, it is common to see clauses excluding force majeure events from laytime calculations. The occurrence of an event might fall within the ambit of the force majeure clause in the sale and purchase agreement but that same event may not necessarily be excluded in the charterparty.

PDLegal has advised clients on demurrage claims in connection with their charterparties as well as sale and purchase agreements and has handled numerous arbitrations seated in Singapore, London and Hong Kong on demurrage claims.

4. Documentary Credit

Documentary credits are said to be the lifeline of international trade, and is the most common method of payment used in international trade. At PDLegal, a significant portion of our practice includes advising our clients on issues arising from the use of documentary credits, in particular, credits governed by the UCP600. Often, we have to advise our clients on what constitutes a workable letter of credit when there is a dispute on the terms of the credit to be provided.

The documents to be presented usually include shipping documents. PDLegal’s knowledge of shipping law and practice, coupled with our in-depth knowledge of commodities trading, enables us to provide comprehensive advice to our clients in all aspects of their trades.

The type of work PDLegal has done in this area includes:

• Seeking injunctive relief from the Court to prevent payment on the documentary credit where fraud or unconscionability was alleged
• Claims against the issuing bank for wrongfully rejecting the documents presented
• Advising clients on obtaining payment outside of the documentary credit when the documentary credit failed
• Advising on cases where multiple fraudulent shipping documents were generated and presented to different banks under different documentary credits
  

5. Quality Disputes

Another common problem faced by commodities traders is when the specifications of the commodity received is below the specifications stated in the contract. Ordinarily the starting point would be to consider the terms of the contract to ascertain whether it provides for the load or discharge port survey results to be final and binding on the parties. A very common problem faced by the buyer is when the load port survey results are said to be final and binding but the quality at the discharge port is different from that stated in the load port survey results.

At PDLegal, we work closely with experts and surveyors to ascertain the probable cause of the problem and to determine whether the problem was caused by contamination during shipment, or some other causes.