"Certificate final" clauses - in the pursuit of commercial certainty in commodity trading

The courts would generally expect traders to faithfully follow the procedural machinery carefully deployed in a contract through negotiations and will disapprove of any unilateral attempt at upsetting the code that they agreed to adhere to. At the foot of this approach lies, primarily, the widespread need for commercial certainty in commodity trading where a chain of sales occurs through a set of negotiable documents that pass from hand to hand within a relatively short period of time. Neither the courts nor the parties up and down the chain will therefore be willing to support any efforts at derailing the intricately woven fabric of commercial arrangements jeopardising thereby a number of various business interests spread around the world. In certain circumstances, however, the courts may allow the parties to challenge the conclusiveness of a certificate in order to either uphold the sanctity of contract or protect the parties from fraud or fundamental mistake affecting the contested certificate. Going beyond the tight frames of the common law exceptions would involve a substantial modification of the parties’ rights and the risk of the opening of the floodgates to similar cases which would be calamitous to the commodity sector.

This paper is a brief overview of English case law in relation to “finality clauses” - download your copy here.