Barrington, IL (PRWEB) April 23, 2013
Itec Refining and Marketing Co. Ltd. (Itec), Barrington, IL, an ethanol marketing and trading company, has just received $1,073,697.09 from Astra Oil Company LLC (Astra), Huntington Beach, CA, as full payment for wrongful cancellation of a contract. The award judgment was delivered on March 28, 2013 by an Arbitration Tribunal of the Society of Maritime Arbitrators of New York, in accordance with Maritime Arbitration Rules.
The Panel, consisting of three arbitrators, found that Andre Reposo, Astra’s principal ethanol marketing trader, and Astra’s CFO, Ms. Kari Burke, engaged in a pattern of unreasonable and bad faith demands of Itec and, the Panel stated, “… we unanimously conclude that Astra was not commercially reasonable in its dealings with Itec and that its termination of the contract was improper and wrongful.” The Panel’s Award included 100% of claimed damages, plus interest, witness costs, attorney’s fee and costs of the Arbitration Panel.
Itec, through its President, Chet Perry, entered into a contract dated August 3, 2010 with Astra, represented by Andre Raposo, for the sale by Astra to Itec of 1,200,000 gallons of fuel ethanol, according to arbitration filings The contract provided that Itec would open a documentary letter of credit both from a bank and in a format acceptable to Astra. Itec, the ethanol trader, opened its L/C in the timely manner as called for in the contract, and precisely in the format and with the bank approved by Astra. After the L/C was issued, Astra attempted to renegotiate major material terms of both the contract and the L/C, which were unacceptable to Itec. Astra then terminated the contract on August 17, 2010. Itec immediately thereafter commenced arbitration to recover its damages.
The Panel concluded that the documentary letter of credit issued by BNP Paribas (Geneva) in favor of Astra was consistent with the “acceptable L/C format” approved by Astra and thus Itec had satisfied its contract obligations in a timely manner.
The Panel also concluded that the demands of Andre Raposo and Astra’s CFO, Ms. Kari Burke, “must be treated as post agreement requests and judged by standards of good faith and commercial reasonableness,” as required under New York UCC §1-203. “Astra had no right to demand any changes to the contract or the L/C because that would be tantamount to the right to unilaterally modify a contract.” The Panel further concluded “Astra’s demands …were not only unreasonable, but sorely misplaced” and “… plainly overreaching.”
The Panel stated: “Moreover, Astra’s demands cannot be viewed in a vacuum. Not only must they be reasonable in and of themselves, but they must also be reasonable in the context of the transaction and the expectations of the contract counterparty. Here, Astra was oblivious to the reasonable needs of Itec to know that the product it bought was actually delivered to the vessel and conformed to the contract specifications.”
This decision in this dispute between these ethanol marketing and trading companies is to be published by the Society of Maritime Arbitrators as part of their Award Service, and when it is, it will also be available on Lexis.
Contact: Itec Refining and Marketing Co. Ltd.
22 East Dundee Road, Suite 21
Barrington, IL 60010
I. Chet Perry, President