Shipbuilding Agreement - Time limit for Arbitration



A shipbuilding contract provided that Buyer could cancel the contract if delivery was delayed beyond the permitted contractual limits. If Seller disputes such cancellation, it must institute arbitration within thirty (30) days of Buyer’s cancellation and may not refund the installments advanced by Buyer until an arbitration award is handed down.

Buyers cancelled the contract because of delays in delivery. Seller disputed Buyer’s entitlement but failed to commence arbitration within the stipulated time frame.

The Judge agreed with Buyer’s contention that Seller’s right to dispute the cancellation is barred as it failed to meet the 30 days deadline.

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