High Court overturns arbitral award in Songa v Gardsea, ruling that banking day payment deadlines run to midnight at the place of performance, not the most westerly jurisdiction

The English High Court (Commercial Court) allowed sellers' appeal in Songa Product and Chemical Tankers IV AS v Gardsea Shipping Inc [2026] EWHC 1559 (Comm), overturning a London Maritime Arbitrators Association (LMAA) partial final award and clarifying how payment deadlines operate under a Saleform 2012 memorandum of agreement (MOA, a standard-form ship sale contract). The underlying transaction was the sale of MT Songa Coral for US$25 million, with the purchase price payable in two tranches: a 10% deposit into escrow at Nordea Bank in Norway and a 90% balance one Banking Day before delivery. The contract required release of funds to the sellers no later than three Banking Days after the sellers' notice of readiness (NOR, the formal notification that a vessel is ready for delivery). The Banking Days definition in the MOA listed banks in multiple jurisdictions across different time zones, including Norway, the United States, Canada, the United Kingdom, Switzerland, Turkey, the UAE, and Greece. A dispute arose when payment was not completed by midnight Norwegian time on the final Banking Day, nine minutes after which the sellers purported to cancel the MOA. The LMAA tribunal sided with buyers, holding that the Banking Days definition extended the end of the relevant day to midnight in the most westerly listed jurisdiction, Hawaii. The sellers appealed under section 69 of the Arbitration Act 1996 (which allows a party to challenge an award on a point of English law). The High Court held that the Banking Days definition identified which calendar days qualified as Banking Days but did not redefine when a day began or ended. The relevant day ended at midnight at the place where performance was to occur, which was Norway. The sellers' cancellation notice was therefore valid, and the tribunal had erred in law.