The Agreement related to individual sales to be arranged for agreed quantities in subsequent addenda.
Pursuant to clause 4 of the Agreement, delivery was to be "CFR to Dakar/Senegal (Incoterms 2010)".
On 10 July 2016, the parties entered into Addendum N°9 to the Agreement under which Sulphur Chemicals GMBH agreed to deliver and Singapore Ressources PTE agreed to take 23 000 Metric tons of solid sulphur in bulk (the Cargo) at a price of USD 218 per Metric ton. The parties later agreed to increase the Cargo to 26 430 Metric tons. The total contract price was therefore USD 5 741 740.
Pursuant to Addendum 9, the payment was to be effected by letter of credit.
The Cargo was loaded on the vessel MV Vis Moot at the port of Gdansk, Poland. During loading, samples of the Cargo were taken and analysed by the Laboratorium Polisk Lab 7 which issued a Certificate of analysis N°01/09/16 indicating that the Cargo conformed to the specifications of the Agreement.
The Cargo arrived at the destination Port of Dakar, Senegal on 20 September 2016 and was discharged on 27 September 2016.
Singapore Ressources PTE did not issue a letter of credit and did not make payment of the contractual price. Rumors indicated that the Cargo was not of good quality. Sailors said that the Cargo was soaked in sea water as a result of a typhon before arriving to Dakar, Senegal.
The CEO of Singapore Ressources PTE is worried that if the Cargo does not complied with the specifications of the Agreement this will be damaging to the Singapore Ressources PTE's factory and might cause interruption to its business.
Advise the CEO of Singapore Ressources PTE (the buyer) in accordance with the United Nations Convention on Contracts for the International Sale of Goods (Vienna Convention).
Your answer should deal with the issues below:
- What should Singapore Ressources PTE (the buyer) do? Describe the various actions that the buyer needs to take.
- The CEO of the buyer ask you to explain what the notice to the seller should contain and what conditions should be complied with by said notice?
- Describe the implications of the use of the CFR Incoterm for the buyer and the seller.
- Is suing Sulphur Chemicals GMBH in Germany the best option for Singapore Ressources PTE? Why?
- What are the other alternatives available to Singapore Ressources PTE in accordance with the Vienna Convention? Why?
Please refer to the United Nations Convention on Contracts for the International Sale of Goods relevant provisions for guidance.
Question 1 : (6 Points in total)
What are the problems with the following clause?
The validity and construction of this Agreement shall be governed by the laws of the Canton of Geneva, Switzerland, or of an Arabic country or both.
Question 2 : (6 Points in total)
Answer the questions below:
- What are the methods of resolving international disputes? Explain each method.
- What are the benefits of arbitration?
Question 3 : 8 Points
Sulphur Chemicals GMBH is the seller company incorporated in Germany. Singapore Ressources PTE is the buyer company incorporated in Singapore.
On 1 March 2016, the parties entered into a Solid Sulphur Agreement (the Agreement) under which Singapore Ressources PTE agreed to purchase and to receive and Sulphur Chemicals GMBH agreed to sell and to deliver up to 10 000 Metric tons of solid sulphur in the year 2016.
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