I. Introduction

Payment was to be “net cash against documents” through a named bank. The sellers declared the full contract quantity and this was shipped, the bill of lading being dated 28th February 1977, well within the shipment period, which was February/March 1977. Only 445 tonnes were originally discharged at Le Havre when the ship arrived there on 21st March 1977; the remaining 55 tonnes were over-carried to Rotterdam and there transhipped, eventually to be discharged at Le Havre on 2nd April 1977. Meanwhile, the sellers had, on 22nd March 1977, tendered documents which satisfied the requirements of a c.i.f. contract and which covered the whole 500 tonnes. The buyers, however, refused to pay against these documents and rejected them on the ground that they did not include the G.S.C. certificate referred to in the contract. This was clearly a bad ground for rejection since the G.S.C. certificate could not be issued till after discharge and so could not form one of the shipping documents, which might well have been tendered before arrival of the ship (though in fact they were in this case tendered thereafter). The sellers did not at this stage elect to treat the buyers as being in breach, or rescind the contract. Instead, they obtained a certificate from G.S.C. stating that the parcel of 445 tonnes was “equal to the samples previously sealed by us”. On 30th March 1977 the sellers made a second tender of documents, this time including the G. S.C. certificate; but the buyers again rejected the tender. Two days later, on 1st April 1977, the sellers elected to treat the contract as rescinded2. In the resulting arbitration proceedings, it was found (1) that Argentine Bolita beans were always white; (2) that the 500 tonnes contained a commercially significant quantity of coloured beans (which were a different commercial commodity from Argentine Bolita beans); (3) that the goods did not correspond with the sealed samples; and (4) that they did not, because of the presence of coloured beans, correspond with the contract description. But, although the goods were not actually in conformity with the contract, it was agreed by all the judges who considered the case that the certification clause in the contract precluded the buyers from relying on this fact, at least in relation to the 445 tonnes covered by the G.S.C. certificate. Lloyd, J.3, and the Court of Appeal4 emphasized that