Sharp Corp Ltd v Viterra BV [2024] UKSC 14

In 2017 Viterra sold peas and lentils to Sharp, on C&FFO Mundra (and Gafta 24) terms; payment cash against documents, with Viterra’s right to re-sell in the event of default. The goods arrived from Vancouver in June 2017 but Sharp failed to pay.  By the time Viterra re-gained possession of the warehoused goods (in Feb 2018) to re-sell, the Mundra prices had risen sharply (due to new local import tariffs). The GAFTA board based Viterra’s damages (some USD5m) on the high comparator of the Feb 2018 C&FFO Mundra price. The matter eventually reached the SC which found that GAFTA erred in so doing and the compensatory principle of damages and the doctrine of mitigation both required that the comparator should be the local ex-warehouse price and not the international import price; in other words, Viterra should not have the benefit of the price-hike.