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The performance from year to year

Dispute over apatite prices could cause a shutdown of plants

Objective

Our client, a major producer of fertilizers entered into a contract for the supply of apatite concentrate with a supplier. During the course of contract fulfillment, a dispute arose concerning the interpretation of the pricing clause (price formula). The supplier’s price calculations were twice as high as calculations made by the client. The supplier sent a warning note to our client, stating that the supplies would be stopped unless the client pays off the indebtedness that purportedly arose due to the application of “incorrect prices”. The importance of the matter for our client was that he would have been forced to shut down two facilities in mono-towns and incur significant losses. Accordingly, our top priority was to prevent any production stoppages. 

Resolution

We filed a suit for the recognition of the supply contract as one made on the basis of the pricing formula argued by our client, i.e. requested the court to interpret the terms of the contract. At the same time, we asked the court for an injunction to prevent the contractor from stopping supplies until the settlement of the dispute. Previously, such injunctions were only used in cases concerning power and water supply. We made arguments that persuaded the court to support our position and protect our client’s interests by preventing the supplier from stopping supplies. The case set a precedent for injunctions in this type of disputes. 

Result

As a result of our selected strategy and professionally formulated position, the supplier agreed to enter into negotiations. The client managed to settle the case in its favor in a short timeframe. 

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