Two traders thought the deal was done. The court disagreed. No agreed arbitration clause meant no jurisdiction, and "everybody knows" was not enough to prove trade custom.
Ukrainian corn. FOB Odessa. 50,000 MT.
On 9 March 2018, two traders were communicating through a broker in a fast-moving market. They agreed the core commercial points: commodity, volume, quality, price, and shipment window.
Firm offer Pls book it Ok book it Booked on 205.20 Super
Both sides felt the deal was done.
The broker circulated a full contract text covering loading terms, fumigation, demurrage, NOR procedure, and a GAFTA arbitration clause.
Drafting went back and forth in marked-up versions. Most points were resolved. One was not: the notice of readiness acceptance window. The buyer would not move. The seller drew a line. Talks collapsed on 14 March.
The buyer then commenced GAFTA arbitration.
The seller said there was no arbitration agreement. The GAFTA clause had never been agreed in the 9 March exchange, and the full contract was never finalised.
The buyer tried a different route. Both traders gave evidence that they had never done a Ukrainian corn FOB deal without GAFTA 49 and that everybody in the market used it.
The court was not persuaded. Two traders describing their own experience do not establish a binding trade custom.
Trade custom must be proved with proper evidence: documents, witnesses, expert evidence, and proof that the market as a whole operates that way without exception.
Everybody knows is not evidence.
The High Court set aside the arbitral award. No arbitration agreement meant no jurisdiction.
The buyer was left without an award, and without the corn.
"Ok, booked" in a chat may show commercial intent. It does not by itself create a fully agreed contract.
Until both sides have confirmed all terms, including the arbitration clause, there is no arbitration. And in an English court, "everyone does it" proves nothing without evidence.