Marine & International Trade

In Virgo Marine Inc and Nixie Marine v Reed Smith LLP and Barclays Bank PLC [2025] EWHC 1157 (Comm.), the High Court refused Reed Smith’s application for £6 million in security for costs against Zaiwalla & Co’s Dubai-based shipping clients. The claim arises from the freezing of approximately US$13.3 million held in escrow following Virgo Marine’s designation under US sanctions. Although Reed Smith later accepted that its London office was not subject to US sanctions and instructed Barclays to release the funds, the bank declined to do so. Virgo and Nixie commenced proceedings in negligence, breach of contract and breach of trust. Mr Justice Foxton rejected Reed Smith’s security application, holding that there was insufficient evidence that Barclays would refuse to comply with an English court order, describing the contrary evidence as “thin and unpersuasive.”

Zaiwalla & Co defeats security for costs claim in novel £20m sanctions case

In a judgment dated 14 May 2025, the English High Court refused an application by the English solicitors firm Reed Smith seeking £6m in security for costs from Dubai-based ship owners who claim the UK law firm negligently and unlawfully ordered its Bank, Barclays, to freeze the ship owners’ funds held by the firm in escrow after one of the Claimants was designated by the US Office of Foreign Assets Control (”OFAC”). 

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In a landmark judgment, the UK Supreme Court upheld Sharp Corp Limited’s appeal concerning the correct measure of damages under GAFTA Contract No. 24. The dispute arose after Viterra BV declared Sharp in default under contracts for the sale of Canadian Yellow Peas and Lentils, and secured GAFTA awards of approximately US$6 million based on a notional replacement contract calculated FOB Vancouver. Zaiwalla & Co, acting for Sharp, successfully argued that damages should reflect the actual value of the goods remaining in the seller’s hands at Mundra Port, where they had already been customs cleared. By the time of resale, Indian tariffs had materially increased the value of the goods, rendering the notional calculation inconsistent with the compensatory principle. The Supreme Court confirmed that damages must reflect commercial reality rather than a hypothetical substitute transaction and remitted the matter to the GAFTA Appeal Board for reassessment in line with its guidance.

Landmark Supreme Court Judgment: Zaiwalla & Co Secures Victory for Sharp Corp Limited in a High-Profile GAFTA Case

The UK Supreme Court has delivered a landmark judgment determining the correct measure of damages under a sale of goods contract. This judgment arose from an appeal by Rotterdam-based Viterra BV (formerly known as Glencore Agriculture B.V.) against an English Court of Appeal ruling in favour of Delhi-based buyer Sharp Corp Limited (“Sharp”). The case hinged on the correct method of calculating damages under the Default Clause of GAFTA Contract No. 24.

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