GAFTA: Assessment of damages for non-acceptance under the default clause
The GAFTA Default Clause governs what is the measure of damages payable in default of fulfilment of the contract by either party. The recent decision in Sharp Corp Ltd v. Viterra BV  EWHC 354 (Comm) concerned an appeal to the High Court on the GAFTA Board of Appeal's decision on the quantum of damages payable under the Default Clause in GAFTA Contract No. 24. It was held that the "actual or estimated value of the goods, on the date of default" is to be assessed on the basis of a notional substitute contract on the same terms, rather than the value of the relevant goods in the market at the discharge port.