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Lawyers, other representatives, expert(s), tribunal’s secretary

Final Award

WE, THE UNDERSIGNED ARBITRATORS, having been designated in accordance with the arbitration agreement entered into between the above-named Parties as fully described below, and having been duly sworn, and having duly heard the presented evidence and arguments of the Parties, do hereby, AWARD, as follows:
The case arises from a dispute arising from the purchase and sale of soymeal pursuant to Contract Broker’s Contract No. 121385 dated April 17, 2018, between Claimant and Counterclaim Respondent, Tradiverse Corporation ("Tradiverse"), as seller, and Respondent and Counterclaim Claimant, Luzar Trading S.A. ("Luzar"), as buyer, which is governed by the NAEGA No. 2, revised as of March 30, 2018 (the "Contract"). The Contract is governed by New York law.

A. Arbitration Agreement

This arbitration has been conducted pursuant to the provisions of Clause 30 of NAEGA No. 2, which provides:

Buyer and seller expressly agree that any controversy or claim arising out of, in connection with or relating to this contract, or the interpretation, performance or breach thereof, shall be settled by arbitration in the City of New York before the American Arbitration Association (AAA), or its successors, in accordance with the International Arbitration Rules of the American Arbitration Association, as those Rules may be in effect at the time of such arbitration proceeding, which Rules are hereby deemed incorporated herein and made a part hereof, and under the laws of the State of New York. The number of arbitrators shall be three....

The language of the arbitration shall be English.... The arbitration award shall be final and binding on the parties and judgment upon such arbitration award may be entered in the Supreme Court of the State of New York or any other court having jurisdiction thereof. Buyer and seller hereby recognize and expressly consent to the jurisdiction over each of them of the American Arbitration Association or its successors, and all of the courts of the State of New York. The parties agree that arbitration awards may be released by the AAA to the North American Export Grain Association, Inc., for distribution to the interested public. Buyer and seller agree that this contract shall be deemed to have been made in New York State and be deemed to be performed there, any reference herein or elsewhere to the contrary notwithstanding.

The International Arbitration Rules of the American Arbitration Association, which are the International Dispute Resolution Procedures ("ICDR Rules"), govern this arbitration. The Arbitral Tribunal comprises Kathleen James, Andrew Matting, Mark A. Cymrot (Chairman).

B. Parties and Relevant Persons

Tradiverse Corporation is a corporation that operates on a global basis from offices in New York City, Mexico City, and Mombasa, Kenya to source, transport and distribute around the world grain and oilseeds, including wheat, rice, com, soybeans, soybean meals and dried distiller grains. Kabir Ahmad is the CEO and founder of Tradiverse.
Tradiverse is represented in this proceeding by Jeffrey W. Gutchess, Bernardo N. de Mello Franco, Alice Ferot, AXS Law Group PLLC, 2121 NW 2nd Avenue, Miami, FL 33127.
Luzar Trading S.A. is a corporation organized under the laws of Panama, which buys and sells grains and other products, including soymeal. Gustavo A. Vollmer is the CEO and one of Luzar’s founders.
Luzar is represented in this proceeding by Michael E. Unger, Michael Dehart, Freehill Hogan & Mahar LLP, 80 Pine Street, 25th Floor, New York, New York 10005.

C. Procedural Background

On October 1, 2018, Tradiverse submitted a Demand for Arbitration, which alleges, in relevant part, that Luzar breached the Contract and committed fraud, "which stems from the failure of [Luzar] to pay the 10% deposit by September 1, 2018 as required by [the Contract], Luzar’s attempt to fraudulently claim that it had paid the required 10% deposit by September 1, 2018 when it had not, Luzar’s failure to provide adequate assurances of performance, and Luzar’s failure to provide the minimum seven days pre-advice of any vessel’s readiness to load." Tradiverse claims damages in excess of $700,530.00, including lost profits, legal fees, and costs.
On November 14, 2018, Luzar responded to Tradiverse’s claims, in relevant part, by denying that it breached the Contract or committed fraud and alleging that Tradiverse repudiated the Contract and engaged in unlawful self-help when it purported to forfeit the deposit. In a counterclaim, Luzar seeks (a) the profits Luzar would have made if the contract had been fully performed; (b) damages incurred by Luzar for which it is liable to pay its receivers and/or other contracting parties; (c) the return of its 10% deposit Tradiverse has unjustifiably withheld; (d) legal fees, costs, interest, and; (d) punitive damages arising from Tradiverse’s unjustified and continued withholding of Luzar’s 10% deposit under the Contract.
On January 13, 2019, Tradiverse denied the allegations in the counterclaim.
On the morning of the preparatory hearing, Luzar delivered an email to the Tribunal seeking interim measures that would require Tradiverse to return immediately the $700,530.00 deposit that it had purported to forfeit from Luzar or, in the alternative, place the funds in escrow with the ICDR. Later in the morning, Tradiverse responded with an email arguing that the request was improperly made without consultation and was without merit.
The ICDR granted the parties the opportunity to file any objection to the arbitrators based on their disclosures but received no objections, as confirmed in ICDR letters of December 10, 2019 (for the party-appointed arbitrators) and February 22, 2019 (for the Chairman). At the outset of the preparatory hearing held by teleconference on March 7, 2019, the Parties were given an opportunity to question or object to the arbitrators. The Tribunal was accepted without objection.
After a discussion of the merits of the dispute and Luzar’s request for interim measures, the Parties agreed to a schedule for briefing Luzar’s request, the date for a teleconference for hearing arguments on Luzar’s request and any document disputes, and a schedule for the merits proceedings, all of which the Tribunal incorporated into a Case Management Order. The teleconference was scheduled for May 7, 2019 with a Redfern Schedule due three days before, and the merits hearing was scheduled for September 5-6, 2019.
In accordance with the schedule, Luzar submitted a Brief in Support of Its Request for an Interim Award Requiring Tradiverse to return the 10% Deposit or Place it in Escrow with the ICDR supported by exhibits A-G. Tradiverse submitted a brief in Opposition along with exhibits LI-9. Luzar then submitted a reply brief in support of its request. Neither party submitted affidavits or other forms of testimony in support of its position.
On May 6, 2019, the Tribunal issued Procedural Order No. 1 rescheduling the date for the teleconference on Luzar’s request for interim measures and setting forth three questions for the Parties to consider in their arguments.
On the morning of the motion teleconference, May 21, 2019, Tradiverse submitted an email providing written answers to the Tribunal’s questions and making new arguments. After Luzar objected to the email, the Tribunal accepted it but granted Luzar until May 24, 2019 to submit a written response, which it did. During the teleconference, the Tribunal heard argument on Luzar’s request for interim measures and on the document request disputes referenced in the Redfern Schedule submitted three days before the hearing.
On June 14, 2019, the Tribunal issued Procedural Order No. 2, setting forth the Tribunal’s rulings on the document disputes in the Redfern Schedule.
On June 17, 2019, the Tribunal entered an Interim Award, ruling as follows:

(a) Luzar’s request for an order requiring Tradiverse to return the 10% deposit immediately to Luzar was denied; provided, however, the Tribunal reserved jurisdiction to decide on this request as part of its decision on the merits;

(b) Tradiverse was ordered to deposit US$700,530.00 in escrow with the 1CDR within seven (7) business days from the date of the transmittal of the Interim Award to the Parties, under terms established by the ICDR, pending the completion of this arbitration and further order from the Tribunal; and

(c) A decision on an award of costs and legal fees in connection with Luzar’s request for interim measures, including the costs of the escrow account, was reserved until the final award.

On June 26, 2019, Tradiverse submitted emails attaching three new exhibits and asked the Tribunal to reconsider the Interim Award. Luzar responded the next day seeking to rebut Tradiverse’s arguments. After considering the arguments of the Parties and the three new exhibits, the Tribunal denied Tradiverse’s request for reconsideration without prejudice to considering additional evidence at the merits hearing.
Tradiverse has not complied with the Interim Award, saying it would challenge it in court but never providing to the Tribunal grounds for a challenge; Tradiverse never sought a stay of the Interim Award from the Tribunal or to the Tribunal’s knowledge, ever obtained an order from a court staying the award or setting it aside. Tradiverse is, thus, in default of the interim Award.
On July 12, 2019, Luzar sought a default final award based upon Tradiverse’s default of the Interim Award, asking the Tribunal to dismiss Tradiverse’s claims and grant its counterclaim. After reviewing the submissions and hearing the arguments of counsel on July 24, 2019, the Tribunal issued Procedural Order No. 3 denying the request on the grounds that it lacked authority under the ICDR Rules to enter a default award and the remedy sought was not sufficiently related to the failure to post the escrow to grant the request. To the Tribunal’s knowledge, Luzar has not sought to enforce the Interim Award in court.
Also, in Procedural Order No. 3, the Tribunal found that Tradiverse was in default on its obligation in the Case Management Order to produce documents responsive to Luzar’s request by April 24, 2019. Tradiverse made its first partial production on or about July 17, 2019, almost three months late, and said it had additional documents to produce "in the coming days." On Luzar’s request, the Tribunal established July 26, 2019 as the deadline for producing all documents to be presented at the merits hearing absent a showing of good cause.
In the July 23, 2019 teleconference, Luzar asked for permission to file a motion for summary disposition, which Tradiverse opposed. In Procedural Order No. 3, the Tribunal denied that request on the grounds that, without agreement of the Parties, the ICDR Rules do not clearly provide the Tribunal with authority to hear a summary disposition motion.
On August 1, 2019, the Parties exchanged witness statements, exhibits, and prehearing briefs, and on August 19, 2019, they exchanged responsive witness statements and briefs. Tradiverse submitted a witness statement from Kabir Ahmad, CEO and founder of Tradiverse, and Jay O’Neil, an expert offered by Tradiverse to describe industry practices. Luzar submitted a witness statement and responsive witness statement from Gustavo Vollmer Sosa, CEO and founder of Luzar.
On August 9, 2019, Tradiverse submitted an email to the Tribunal asking it to issue a subpoena duces tecum to Pasternak Baum & Co., Inc. ("Pasternak Baum"), the New York broker on the Contract, The subpoena sought a witness to appear at the hearing and the production of documents. Luzar did not object. On August 15, 2019, the Tribunal granted the request on condition that certain terms in the draft subpoena be defined in a manner to limit it to relevant information. After Tradiverse edited the subpoena, the Tribunal issued it.
During the prehearing teleconference on August 21, 2019, Tradiverse asked for permission to have limited direct examination of its witnesses during the merits hearing. In Procedural Order No. 4, the request was granted.
Also, during the prehearing teleconference, the Tribunal announced that it had reconsidered an earlier ruling denying Tradiverse’s request for Luzar’s bank statements for the period of January 1 through October 1, 2018. Based upon new support in its prehearing brief for an argument that Tradiverse had made, the Tribunal ordered Luzar in Procedural Order No. 4 to produce bank statements or other documents sufficient to show how it would perform its obligations under the Contract. Those documents were ordered to be produced for "attorneys’ eyes only" by close of business Wednesday, August 28, 2019.
On August 22, 2019, Tradiverse requested four additional subpoenas to financial institutions with which Luzar had done business. Tradiverse argued that these bank statements were needed to test the credibility of Luzar’s document production in response to the Tribunal’s Procedural Order No. 4. Luzar argued the subpoenas were overbroad and sought irrelevant information. The Tribunal denied the request on the grounds the subpoenas were untimely, overbroad, and not directed at recently ordered new information.
After an agreed continuance, the merits hearing was held on September 11, 2019, at the offices of BakerHostetler LLP in New York. By agreement the proceedings were transcribed, and the transcript has been made available to all Parties and the Tribunal.
At the outset of the hearing, Tradiverse advised the Tribunal that Pasternak Baum had produced 151 pages of documents but objected to producing a witness because Tradiverse had threatened to sue it. The Tribunal denied Tradiverse’s request to continue the hearing to permit it time to enforce the subpoena on the grounds that the hearing had been scheduled for many months, at least one witness had traveled from abroad to the hearing, and Tradiverse had produced its own documents almost three months late, had known about the role of Pasternak Baum since the outset of the arbitration but had delayed until three weeks before the merits hearing to request the subpoena and had taken no action to enforce the subpoena before the hearing.1
During the hearing, the Tribunal heard direct and cross-examination testimony from Gustavo Vollmer Sosa, Jay O’Neil, and Kabir Ahmad, and received Joint Exhibits 1-32 ("JE__").
The Parties submitted simultaneous post-hearing briefs on October 25, 2019 and legal fee and cost requests on November 1 and 6, 2019. The 1CDR closed the record on November 6, 2019.

D. Statement of Facts

Based upon the evidence presented and the arguments of counsel, the Tribunal finds the following facts.
The Parties entered into the Contract on April 17, 2018, which required Tradiverse to provide approximately 20,000 MT of "Hi-Pro Soymeal" of USA origin to Luzar. The Contract incorporated NAEGA No. 2 to the extent its terms do not contradict these terms.2 The Contract provided, inter alia,

(a) PRICE: $16.00 plus CBOT October 2018 Soymeal per short ton.

(b) SHIPMENT: September 15-30, 2018, both dates inclusive. Trains to arrive September 17, 2018 and September 24, 2018, (NAEGA No. 2 uses the term Delivery).

(c) LOADING:... Buyer to give minimum seven (7) days pre-advice of vessel’s readiness to load.

(d) PAYMENT TERMS: Ten percent (10%) cash before September 1, 2018. Balance cash against mates receipt. If the 10% cash not received before pre-advice, then seller can refuse to accept pre-advice and cancel contract.

JE 1.

During August 2018, Luzar began an arbitration against Tradiverse over a dispute arising from a prior shipment of grain. Luzar tried on several occasions—during August 2018— to negotiate a cancellation of the Contract on the grounds the Parties were involved in a pending dispute. When Tradiverse rejected its several proposals, Luzar went forward with the Contract.
On the afternoon of Thursday, August 30, 2018, Tradiverse sent Luzar an invoice for the 10% deposit in the amount of $700,530.00 to be paid before September 1, 2018. Tradiverse’s CEO, Mr. Ahmad, testified the invoice was sent on that late date in order to include the most recent pricing. Luzar’s CEO, Mr. Vollmer, testified that the company did not know the amount to be invoiced and thus, only had roughly 24 hours to complete the wire transfer. According to Mr. Ahmad, Pasternak Baum advised Tradiverse that Luzar would pay on the following Tuesday, September 4, 2019 because it did not have the funds. Tradiverse responded that the delay was unacceptable.
At approximately 5:15 PM on Friday, August 31, 2018, Luzar provided instructions to its bank to wire the 10% payment to Tradiverse in accordance with the terms of the Tradiverse’s invoice. At 7:25 PM on August 31, 2018, Tradiverse declared Luzar in "default" on the Contract. Luzar responded by providing the details of its wire transfer to the broker, which passed the information to Tradiverse. Tradiverse does not dispute that it received notice of these wire instructions but alleges these instructions were "totally bogus."3 On September 1, 2018, Tradiverse sent Luzar an email again declaring a default.
It is undisputed that the funds reached Tradiverse’s bank account on Tuesday, September 4, 2018. After receiving this payment, Tradiverse sent Luzar an email for the third time declaring Luzar in default on the Contract. According to Mr. Vollmer, these default declarations gave Luzar concern that Tradiverse would fail to perform the Contract.
After an exchange of emails, Luzar sent an email on September 6, 2018, stating: "Luzar intends to nominate a vessel ASAP and proceed with execution of the contract. Please confirm that Tradiverse also remains in a position to fully perform the contract." JE 7. On September 7, 2018, Tradiverse responded by email reiterating its declarations of default.4 Luzar responded by email on September 7, 2018, objecting again to Tradiverse’s declaration of default, stating that it "remains ready and able to execute the contract if Tradiverse chooses not to return the full 10% prepayment," and asking Tradiverse to provide "adequate assurance of performance" pursuant to N.Y. UCC § 2-609 by Monday, September 10th at 12:00 PM. JE 7.
Tradiverse describes this request as "a month-long bad faith effort" and "a lawyer’s ploy to escape the Contract..."5 Tradiverse promptly responded, not by saying it was prepared to perform the Contract, but by seeking adequate assurance of performance from Luzar saying "Luzar has a well-documented history of late payments, failure to timely perform contractual obligations, false statements, and refusal to pay invoices. Given that Luzar is now in default of the Contract 121385, and Luzar’s repeated claims that it could perform under the terms of the Contract, Luzar must establish adequate assurance pursuant to N.Y. UCC 2-609..." JE 7. The email continues to accuse Luzar of wire fraud and says, "Tradiverse is in the process of gathering evidence of this purported wire activity from Panama and Tradiverse reserves the right to file a criminal complaint to investigate wire fraud against Pasternak Baum and Luzar." Id. Luzar responded by email that it "remains ready and able to fully execute the contract" as long as Tradiverse provides the adequate assurances requested in Luzar’s prior email." Id. Tradiverse did not then or later say that it would perform the Contract.
Luzar did not nominate a vessel to transport the soymeal pursuant to the Contract. Tradiverse responded on September 10, 2018, with an email stating that Luzar further breached the Contract by failing to nominate a vessel with seven days advance notice prior to commencement of the shipment period, and that due to Luzar’s alleged defaults, it has forfeited the 10% deposit. Luzar objected to Tradiverse’s default declarations and to its position that it was entitled to forfeit Luzar’s deposit.
Tradiverse commenced this arbitration on October 1, 2018.

E. Positions of the Parties

Both Parties argue their conduct was justified by the troubling conduct of the other in connection with prior contracts. The Tribunal is presented with a specific dispute arising from the conduct of the Parties in connection with the Contract and will focus its attention principally on that dispute.
Tradiverse argues that Luzar repeatedly tried to cancel the Contract and then breached the Contract on three occasions: when it failed to deliver the required 10% deposit before September 1, 2018, failed to give adequate assurance of performance, and failed to nominate a vessel to take delivery of the soymeal by September 10, 2018.
Tradiverse further argues that Luzar’s demand for adequate assurances "constituted a bad faith attempt to escape from its contractual obligations to Tradiverse."6 Tradiverse had performed its obligations under prior contracts and allegedly said it would perform this Contract when asked, and thus, Tradiverse argues Luzar request for "adequate assurances" had no objective basis for insecurity and was an improper effort to avoid the Contract.
Tradiverse also argues that Luzar was required to demonstrate that it could perform the Contract but has failed in that burden. According to Tradiverse, Luzar never tried to find an end customer for the soymeal and had a motive for not performing, the market price of soymeal was dropping.
By contrast, Tradiverse argues that it had reasonable grounds to request "adequate assurances" because Luzar, not Tradiverse, breached the Contract by failing to timely remit payment of the 10% deposit. Tradiverse argues it mitigated damages by declaring Luzar in default when Luzar failed to nominate a vessel.
Tradiverse seeks damages in the amount of $856,740.00.
Luzar argues that after Tradiverse rejected its proposals to cancel the Contract in August 2018, it performed its obligation by delivering the 10% deposit of $700,530.00 on September 4, 2018. Luzar argues that the plain, unambiguous text of the Contract means that Tradiverse’s receipt of the 10% deposit after September 1st did not immediately result in a Luzar default of the Contract. The Payment Terms of the Contract provides, in relevant part, that "If the 10% cash not received before pre-advice, then seller can refuse to accept pre-advice and cancel contract." JE 1. Luzar argues that this provision means that Tradiverse did not have the right to declare Luzar in default and cancel the Contract if the 10% deposit was paid at any time prior to the submission of pre-advice, which it was.
After Tradiverse declared a default for purported late payment of the deposit, Luzar asked Tradiverse whether it intended to perform the Contract but Tradiverse never said it intended to go forward. Luzar argues its demand for adequate assurance was justified due to Tradiverse’s repeated declarations of default and its failure to respond directly to its question of whether it intended to perform the Contract. Luzar argues that under New York law, Tradiverse’s conduct constitutes a repudiation of the Contract.
Luzar further argues that Tradiverse’s request for adequate assurances was impermissible under the law, and that even if the request were permissible, Luzar provided unambiguous assurances it intended to perform the Contract. Thus, Luzar argues this purported basis for default is without merit.
Luzar responds to Tradiverse’s argument that it defaulted on the Contract when it did not provide seven days advance notice of the nomination of a vessel to load prior to the commencement of the shipment period by arguing that Tradiverse had already repudiated the Contract, thus, Luzar was relieved of its obligation to nominate a vessel, and in any case, it had until September 23, 2018 to nominate a vessel under the Shipment term of the Contract; thus, Tradiverse’s second ground for declaring a default is also without merit.
Luzar argues that Tradiverse has not provided any legal basis for its position that it forfeited its 10% deposit. In particular, the Contract (including the terms of NAEGA No. 2) contains no forfeiture provision, but includes a merger clause, which establishes that the Contract is the whole agreement between the Parties and can only be amended in writing. Luzar further argues that Tradiverse’s three arguments to support its forfeiture position are inconsistent with the Contract and without merit. Thus, Luzar concludes that the Tribunal should order Tradiverse to return its deposit and award damages, interest, costs, legal fees and punitive damages.

F. Tribunal’s Analysis

In its Demand for Arbitration, Tradiverse alleges four grounds to support its claim that Luzar breached the Contract and committed fraud: (1) the failure of [Luzar] to pay the 10% deposit by September 1, 2018 as required by [the Contract], (2) Luzar’s attempt to fraudulently claim that it had paid the required 10% deposit by September 1, 2018 when it had not, (3) Luzar’s failure to provide adequate assurances of performance, and (4) Luzar’s failure to provide the minimum seven days pre-advice of any vessel’s readiness to load. In its briefing, Tradiverse asserts three grounds to support its claim; it appears to have abandoned the second ground that Luzar allegedly claimed it has made the deposit payment by September 1, 2018. In any case, Tradiverse has presented no evidence to support this argument.
With respect to Tradiverse’s other three arguments, the evidence shows that Luzar initiated the required 10% deposit on August 31, 2018, and it is undisputed that the deposit was received by Tradiverse on September 4, 2018. On August 31, September 1 and 4, Tradiverse sent Luzar emails declaring it in "default" on the Contract. Tradiverse has presented no evidence that the three-day (one business-day) delay in receiving the deposit prejudiced its performance of the Contract in any way. The payment of the 10% deposit on September 4, 2018, may have been a non-material breach of the Contract, but the Payment Terms provision provides Tradiverse the remedy of cancellation of the Contract only if the deposit is not received before pre-advice—that is Luzar’s notice to Tradiverse that it had nominated a vessel to receive the soymeal.
Under the terms of the Contract, the three-day delay in the deposit did not give Tradiverse grounds to cancel the Contract and forfeit Luzar’s deposit. The Shipment and Loading terms read together contemplate that the buyer must provide a vessel ready for loading within the delivery period of September 15-30 and gives notice that the trains will arrive on September 17 and 24. Luzar was required to give pre-advice a minimum of seven days before vessel readiness, which could have been sent at the earliest on September 8 based upon the loading window—of September 15-30—or September 10 based upon the date the first train was to arrive at the Lake Charles terminal. Thus, Luzar’s payment on September 4 was received before the earliest date required for pre-advice and, as such, was not a basis for Tradiverse to declare a default of the Contract.
Tradiverse also alleges that Luzar’s bank advice on August 31, 2018, was fraudulent, but acknowledged in the hearing of May 21, 2019 that it had no evidence of fraud at that time; it hoped to collect evidence of fraud during the arbitration. At the merits hearing, Mr. Ahmad testified that Tradiverse’s sole basis for alleging fraud is the differences between the advice he received from Pasternek Baum about the transmission of the deposit and the notice from Tradiverse’s bank saying the funds had been received.7 That is not a sufficient evidence to prove wire fraud. This allegation of fraud also lacks merit.
Tradiverse argues that Luzar’s request for adequate assurances was without a legal basis. Faced with repeated declarations of default after it paid the 10% deposit, Luzar asked Tradiverse whether it intended to go forward with the Contract. This question took the form of two emails with the second one relying on N.Y. UCC § 2-609(1), which provides that "[w]hen reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance." JE 7. While Tradiverse argues that it repeatedly stated it intended to go forward with the Contract, the record demonstrates that, after its first declaration of default, Tradiverse never answered Luzar’s question of whether it intended to go forward with the Contract.8
Tradiverse’s default declarations and its failure to answer a reasonable question from Luzar provided "an objective factual basis for the insecurity, rather than a purely subjective fear that the party will not perform." Campbell v. Mark Hotel Sponsor, LLC, 109 Civ. 9644 WHP, 2012 WL 3577531, at *14 (S.D.N.Y. Aug. 20, 2012) (internal citations omitted). Before incurring the cost of nominating a vessel, Luzar was entitled to know whether Tradiverse intended to deliver the soymeal.
Tradiverse argues that it "never claimed that Luzar’s default resulted in the cancellation of the Contract.9 However, this argument is contradicted by the terms of the Contract and the testimony of Tradiverse’s own expert, Mr. O’Neil. Default is a defined term in NAEGA 2, Clause 22, which provides that the non-defaulting party can immediately sell the product and recover damages from the defaulting party. Mr. O’Neil’s testimony is consistent with this clause, saying: "... So once I’ve been declared in default, I know we're at the end of that game so to speak or the end of that contract and now its an issue of what, if any, are the damages." Tr. 108-9. He continued:

Q: So at that point the contract’s over?

A: At that point the contract’s over.

Tr. 109. While Tradiverse may not have intended to cancel the Contract, its use of the term default delivered that message.

Mr. Vollmer testified to his doubts about Tradiverse’s intentions based upon the default declarations. Since the reasonable conclusion from Tradiverse’s default declarations is the Contract is over, Luzar had an appropriate basis to ask for clarification. Mr. O’Neil testified that the continued email exchanges demonstrate that the Parties agreed to continue the Contract after the declarations of default. However, Tradiverse does not point to an email that justifies this conclusion and the Tribunal finds none.
Tradiverse’s argument that Luzar was acting in bad faith by just trying to find an excuse to cancel the Contract in a falling market is not supported by the evidence. There is no dispute that Luzar sought to cancel the Contract in August 2018. However, once Luzar delivered the 10% deposit, Luzar repeatedly said it was willing to perform the Contract while expressing a willingness to negotiate a settlement of Tradiverse’s default declarations. Tradiverse did not do the same; it did not say it was willing to perform. Tradiverse’s argument that it had always performed in the past is not adequate justifications for its failure to make the simple statement that it intended to deliver soymeal in accordance with the Contract.
Tradiverse responded to Luzar’s email by demanding, almost immediately, adequate assurances from Luzar. When confronted with Tradiverse’s counter-demand for adequate assurances, Luzar reiterated for at least the third time that it was prepared to perform.
NY UCC § 2-609(4) provides that the failure to provide adequate assurances in response to a reasonable demand constitutes a repudiation of the Contract. Hornet Brewing Company v. Spry, 1997 N.Y. Misc. LEXIS 485 (N.Y. Sup. Ct. 1997); see also, Dresser-Rand Company v. Ingersoll Rand Company, 2019 WL 1434575 (S.D.N.Y. 2019)("Repudiation occurs when a party manifests an intent not to perform, either by words or by deeds.")(citations omitted). Based upon its repeated, unfounded declarations of default and its failure to answer to Luzar’s requests for assurance that it would perform, the Tribunal finds that Tradiverse repudiated the Contract.
Tradiverse argues that, in order to rely upon NY UCC § 2-609(4), Luzar has the burden to demonstrate that it "both ready and able to perform the contract."10 Tradiverse argues that Luzar has failed in this burden because "it (a) had no end customer to purchase the $7 million worth of soybean meal, and (b) refused to produce its bank statements that would have shown if Luzar had $7 million to pay Tradiverse." Id. However, Mr. Vollmer explained that he did not nominate a vessel due to the uncertainty created by Tradiverse’s default declarations (and his view of prior performance). In response to the Tribunal’s order, Luzar did produce redacted bank statements showing a balance of $7 million, and Mr. Vollmer explained that he had multiple options for performing the Contract if Tradiverse had expressed its intention to continue, including using existing lines of bank credit, discounted invoices, or structured lines of credit with certain customers. Tr. 30-35. He had also discussed with customers a possible sale. This evidence is sufficient for Luzar to satisfy its burden of demonstrating it could have performed its obligations under the Contract.
Tradiverse argues that Luzar committed another default when it failed to nominate a vessel to accept the soymeal by September 10, 2018. On that date, Tradiverse declared a fourth default and claimed the 10% deposit was forfeited. However, by that time Tradiverse had already repudiated the Contract, thus relieving Luzar of the obligation to nominate a vessel.
The Contract Shipment and Loading terms also do not support Tradiverse’s argument that Luzar committed a default when it did not nominate a vessel by September 10. The Shipment term provides for a 16-day period between September 15-30 but then gives notice the trains will arrive on September 17 and 24. The Loading term provides a minimum of 7-day notice to the Buyer of the vessel’s readiness to load. The reading of these terms together is ambiguous, suggesting the anticipated deadline for pre-advice could be September 10 (due to the timing of the first train) or September 23 (due to the end of the loading period). However, the Contract does not state any obligations or guarantees related to the train arrivals, and thus, it appears that Luzar had until September 23 to nominate a vessel.
Other Contract terms also weigh against Tradiverse’s position. NAEGA No. 2, Clause 18 contemplates that the buyer has until the 15th day following the last day of the delivery period to nominate a vessel before being declared in default, which would be October 15, 2018, almost five weeks after Tradiverse’s declaration of default. The Contract also includes a Carrying Charges clause that provides no carrying charges will accrue if the nominated vessel files within the shipment (delivery) period, and only if outside that period will there are be carrying charges. Thus, depending upon the length of the delay, the remedy may be carrying charges and not a default.
Mr. O’Neil’s testimony also does not support Tradiverse’s argument. He testified that the "spirit and intent" of the Contract, in his opinion, was to have the vessel be ready to load near the time the trains arrived because soymeal will deteriorate over time. Tr. 115-16. He did not support Tradiverse’s argument that September 10 was a deadline for nominating a vessel when he testified:

Mr. Cymrot: In your opinion preadvice had to be given by September 10th?

The Witness: Certainly by close proximity to the train. It could be the 10th, 11th, the 12th I would imagine and you’d still be right in between those two trains without much problem...


Based upon this analysis, the Tribunal concludes that September 10 was not a firm deadline for nominating a vessel, and, thus, Tradiverse’s default declaration was without basis.
Luzar further argues that Tradiverse has provided no basis for declaring a forfeiture of the 10% deposit. As Tradiverse concedes, there is no provision of the Contract that supports its forfeiture argument. Tr. 243-45. Tradiverse’s principle argument is that the intention of the 10% deposit is to secure Luzar’s performance. Id. However, forfeiture of the 10% deposit was not written into the Contract. The Contract terms lead to a different conclusion.
The Payment Terms define the method and timing for payment from the buyer to the seller for the value of the goods delivered. The Payment Terms provide for the 10% deposit and the balance of the contract price against mates receipt, and for cancellation of the Contract if the deposit is not received before pre-advice. The Payment Terms do not provide that the deposit is forfeited if the Contract is cancelled. Rather, the Default provision in NAEGA No. 2 describes how damages will be calculated. No other provision of the Contract addresses the 10% deposit or provides for a forfeiture. Under the Merger Clause, the Payment Terms represents the entire agreement between the Parties on the terms of the 10% deposit. Tradiverse has not pointed to contemporaneous communications that are not inconsistent with the terms of the Contract. Thus, the Parties did not agree to a forfeiture of the 10% deposit upon default.
Based upon this analysis, Tradiverse has failed to support its claims that Luzar breached the Contract and forfeited its 10% deposit, and thus, its claims are denied.

G. Counterclaim Analysis

In its counterclaim, Luzar asked for return of its 10% deposit, damages and other relief. For the reasons already stated, Luzar is entitled to return of its $700,530.00 deposit plus interest.
Luzar has submitted no evidence of lost profits or other damages. These additional claims of damages are denied, and the Tribunal declines to impose punitive damages. See ICDR Rules, Article 31.
Luzar has sought interest but has not addressed the interest rate applicable to this deposit. The Parties have agreed to an interest rate of 2.5% percent interest per annum over New Prime Rate for Carrying Charges. The Tribunal will apply this reasonable rate to Luzar’s deposit claim from the date Tradiverse wrongfully declared a default and forfeiture of the 10% deposit, September 10, 2018.11

H. Legal Fees and Costs Analysis

Both Parties seek legal fees and costs based upon ICDR Rules, Articles 34 and 35, which give the Tribunal authority to allocate those charges among the Parties.
The Tribunal determines that Luzar is entitled to recover from Tradiverse the full costs of the arbitration and reasonable legal fees, including the costs and fees of the Interim Award proceeding. Luzar is the prevailing party, which, in an international arbitration, generally entitles it to recovery of its costs and fees, and in addition, Tradiverse breached the Case Management Order by producing documents three months late and refused to agree to Luzar’s reasonable requests to shorten and streamline the arbitration, which complicated the arbitration and added to its expense, and Tradiverse is in contempt of the Interim Award entered by the Tribunal on June 17, 2109. See ICDR Rule, Article 24(4). Luzar’s claim for reasonable legal fees and costs of $140,739.68 is, thus, granted.
For the foregoing reasons, Tradiverse’s claim for legal fee and cost of $181,853.15 is denied.

I. Tribunal’s Award

Based upon the facts and analysis provided herein, the Tribunal awards as follows:

A. Tradiverse’s claims for damages in excess of $700,530.00 and lost profits and its claim for legal fees and costs of $181,853.15 are denied in their entirety;

B. Tradiverse shall pay to Luzar:

a. US$700,530.00 as reimbursement of its 10% deposit;

b. Interest on the reimbursement at the rate of 2.5% per annum over New York Prime Rate simple interest from September 10, 2018; and

c. $140,739.68 as reasonable legal fees and costs of this proceeding;

C. Luzar’s claims for other damages, lost profits, and punitive damages are denied; and

D. The administrative fees of the ICDR totaling $25,750.00 and the compensation of the arbitrators totaling $98,694.89 (less amounts advanced) are to be borne by Tradiverse. Therefore, Tradiverse has to pay Luzar an amount of $62,222.44.

The total award of $900,492.12 plus interest is to be paid on or before thirty (30) days from the date of this Final Award.

This Final Award is in full settlement of all claims submitted to this Arbitration. The Tribunal has considered all arguments and evidence submitted by the Parties even if not specifically discussed. All claims not expressly granted herein are hereby denied.

This Final Award may be executed in any number of counterparts, each of which shall be deemed an original, and all of which shall constitute together one and the same instrument.

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