At ASAP Agri, we work closely with legal experts to help clients stay one step ahead of risks — because grain trading isn’t just about price, it’s also about knowing what to do when things go wrong. In partnership with AGA Partners, we take a closer look at one of the most common — and often most contentious — issues in agri trade: getting paid.

Drawing on real arbitration practice, Vladyslav Kapustynskyi (Associate) and Pavlo Lebediev (Counsel) of AGA Partners, together with Kateryna Mudriian, Chief Analyst at ASAP Agri, explore a high-stakes dispute that began with delayed barges and ended in a million-dollar arbitration award — secured through sharp legal strategy and cross-border asset freezes.

This case shows how smart enforcement can tip the scales — and why clear, well-structured contracts are not just a formality, but a vital line of defense.

Kateryna Mudriian: What types of disputes do you see most often in arbitration? 

Pavlo Lebediev: We recently compiled internal statistics for 2024, and disputes over payment for goods clearly topped the list — accounting for roughly 28% of all arbitration cases we handled. That said, this category is far from uniform. It includes everything from cases of total non-payment to partial underpayment of the balance due under the contract.  These disputes often arise from the buyer raising counterclaims — typically relating to quality, demurrage, or previous contracts.

Kateryna Mudriian: And what was the most memorable payment dispute you worked on last year?

Vladyslav Kapustynskyi: Among all the arbitrations, the most dynamic case concerned an FOB shipment of 10 KMT of corn from the port of Reni. The cargo was to be loaded onto barges, which the buyer was obliged to present gradually over the delivery period — no more than two barges per week.  

However, the buyer failed to arrange the barge supply in advance and instead nominated six barges with a deadweight of around 9 KMT in the final five days of the delivery window. Over the following two weeks, the seller managed to load only about 5 KMT onto the barges.  

Complicating matters, the seller was unable to receive payment because their bank did not accept transfers from the buyer’s country. To resolve this, the seller assigned their right to payment under the contract to a third-party company by way of an additional agreement.  

Meanwhile, delays in loading the balance cargo continued. Several barges never berthed within two weeks after the delivery period expired. As a result, the buyer cancelled their nomination and started claiming demurrage for the alleged delay.  

When the seller refused to pay demurrage, the buyer unilaterally offset the demurrage claim against the unpaid portion of the goods. Eventually, the buyer took the position that, following the assignment, the seller had no right to claim payment at all.

Kateryna Mudriian: That’s quite a mess! So, whose side did the tribunal take in the end?  

Pavlo Lebediev: The tribunal awarded the seller approximately 1 000 000 USD for the value of the goods, 200 000 USD in default damages, and 100 000 USD in arbitration costs.

Here’s why:

• Assignment did not preclude the seller from claiming payment. Despite the formal assignment, the tribunal found that the transfer was made solely to facilitate payment collection through a third party. Neither side treated the assignee as a substitute for the seller under the contract. This award is a striking example of the arbitrators’ commercial and pragmatic approach to resolving trade disputes, free from excessive formalism.

• FOB basis allows loading after the delivery period. Under FOB terms, the delivery period usually relates to the buyer’s obligation to present vessels within the agreed time — not the seller’s obligation to complete loading within that period. Many standard forms of grain contracts permit loading to continue after the delivery window has expired.

• Cargo must be loaded within a “reasonable” time. What constitutes a reasonable period depends on the facts of the case. Here, the tribunal considered a two-week loading period to be reasonable, given that the buyer nominated an excessive number of barges at the very end of the contractual window.

Kateryna Mudriian: Winning the case is great — but was the seller actually able to recover the money?

Vladyslav Kapustynskyi: That’s a critical point. Enforcement of arbitral awards can indeed be a real challenge, especially when the respondent is a company with limited assets. Being aware of this risk, we took proactive steps and sought to secure the buyer’s assets even before the award was issued. 

Ultimately, we managed to obtain asset freezes over the buyer’s goods located in Ukraine, as well as over land plots and warehouse facilities in one of the Balkan countries.  

These multi-jurisdictional asset freezes prompted the buyer to enter into settlement negotiations. In the end, the parties agreed on an instalment plan in exchange for lifting the arrest.

Kateryna Mudriian: That’s a strong result. What practical advice would you offer to our readers based on this case?

Pavlo Lebediev: I’d sum it up in three key recommendations:

1) Be careful when agreeing on third-party payments. The contract must clearly specify whether the seller — or a third-party recipient — retains the right to claim payment. At the same time, from the buyer’s perspective, it’s equally important to ensure that any payment made to a third party is explicitly deemed contractual. Clear and unambiguous wording is critical to avoid disputes in arbitration over who holds the right to claim payment.

2) Delays in loading under FOB contracts are tricky. Since FOB terms usually do not fix a deadline for loading itself, buyers must be proactive. If the seller is slow to load, the buyer should issue formal notices with specific loading deadlines. Without doing so, cancelling a nomination may expose the buyer to default claims.

3) Arrests can be an effective tool. Securing an arrest is not easy — the procedure varies significantly between jurisdictions and depends heavily on local law. Still, in non-payment cases, we often advise clients to consider this remedy as a strategic way to exert pressure on the debtor. If successful, an arrest can provide strong bargaining power in settlement negotiations and, ultimately, recovery of the debt.