contracts for the sale and purchase of palm oil, which were subsequently altered by a price-averaging arrangement between the parties after a fall in the global palm oil price. A dispute arose when JVL accused Agritrade of breach of contract. Agritrade raised two defences to the claim before the arbitral tribunal, however both defences related to what the court considered was a further subsidiary issue, which led to the court’s consideration of the parol evidence rule. The rule provides that where a contract has been reduced into documentary form, a party cannot rely on extrinsic documents or evidence to vary the contract, except in the case of limited exceptions. The arbitral tribunal held that the price-averaging arrangement constituted a recognised exception to the parole evidence rule, and was therefore a valid variation to the contract and defence to the alleged breach. The tribunal’s dismissal of the claim was based on the application of the parol evidence rule to the price-averaging arrangement, a ground which was not raised by Agritrade, and thus not responded to by JVL. On this basis, JVL applied to the Singapore High Court to set aside the award for breach of natural justice. The court allowed the appeal and set aside the award, emphasising that the arbitral tribunal had erred in reversing the burden of proof and expecting JVL to disprove the applicability of the exception to the parol evidence rule, compounded by Agritrade’s failure to raise it as a defence in the first instance.
NZIAC
International Commercial Arbitration International Arb-Med International Mediation
The New Zealand International Arbitration Centre (NZIAC) provides an effective forum for the settlement of international trade, commerce, investment and cross-border disputes in the Australasian/Pan Pacific region.