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AVELLUM successfully represents international inspection company in ICAC arbitration

April 2019

AVELLUM secured a favourable award for the client in the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (“ICAC”) for a total amount of almost USD200,000.

AVELLUM represented a major international inspection company (“Surveyor”) in a dispute against a global oil trading company, which refused to pay for the Surveyor’s services. The claim concerned a debt collection for the provided services. However, it was further complicated by the counterclaim on the scope of the Surveyor’s obligations and the proper provision of its services.

In particular, the respondent raised arguments on improper sampling and the Surveyor’s liability for unsatisfactory cargo quality, claiming around USD200,000.

AVELLUM’s partner Iryna Moroz commented the following: “Indisputably, surveyors cannot be held liable for the quality of the cargo. The scope of the surveyor’s obligations is limited to the inspection of the cargo’s quality at loading in accordance with the client’s instructions and the issuance of corresponding quality certificates. Should the tribunal favour the respondent’s position, it would set up a dangerous precedent for surveyors companies and the inspection services market. We are certain that the success of the counterclaim would leave the agricultural market in uncertainty as to the limits of liability of inspection companies.”

Nevertheless, during the written submissions exchange stage and oral hearings our team proved that the Surveyor cannot be held liable for the inappropriate quality of the cargo delivered by the shipper, if the Surveyor’s obligations were duly performed. As a result, the tribunal dismissed the counterclaim and satisfied our client’s demands.

The AVELLUM team was led by partner Iryna Moroz, with support from senior associate Iurii Gulevatyi.

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