A London-based arbitration tribunal has ordered S Alam Refined Sugar Industries Ltd to pay nearly $1.98 million (about 24.2 crore taka) in damages after finding that the Bangladeshi company wrongfully repudiated a contract to purchase Brazilian raw sugar from Raizen Trading SA.

The tribunal also ordered the company to pay interest, legal costs and about $43,000 (around 52 lakh taka) in arbitration expenses.

The tribunal ruled that S Alam abandoned the deal following Bangladesh's political upheaval in 2024 and that its actions were not legally justified under either the contract or English law, according to documents obtained by Daily Waadaa.

The award, issued on May 11, 2026 by the Sugar Association of London (SAL), concludes an international commercial dispute over a contract signed in December 2023 for the purchase of 110,000 metric tonnes of Brazilian VHP raw cane sugar in two installments.

The ruling comes against the backdrop of Bangladesh's multi-billion-dollar sugar refining industry, which relies almost entirely on imported raw sugar. The country consumes roughly 2.3-2.5 million tonnes of sugar annually, with private refiners importing raw sugar mainly from Brazil for domestic refining.

S Alam is one of the country's largest refiners, operating a Chattogram refinery with an annual refining capacity of around 600,000 tonnes and accounting for an estimated 15-20% of Bangladesh's refined sugar market. In 2023, the group announced plans to invest $400 million in two additional refineries to expand its footprint in the sector.

According to the award, Raizen Trading SA and S Alam reached the deal through WhatsApp exchanges on December 13, 2023, agreeing on prices of $524 per tonne for the first shipment and $523.50 per tonne for the second.

The following day, the parties exchanged a formal business confirmation covering quantity, shipment schedule, payment terms and arbitration under English law through the Sugar Association of London.

The tribunal found that S Alam initially proceeded with the transaction by requesting pro forma invoices in January 2024 to arrange letters of credit for both vessels before seeking amendments to several contractual clauses. Raizen rejected the proposed changes in August 2024, maintaining that the contract had already been concluded under the original business confirmation.

The tribunal also noted that neither party ultimately signed the longer-form written contract circulated later, but ruled that the binding agreement had already been formed through the earlier business confirmation and the parties' subsequent conduct.

The dispute arose after Bangladesh's July-August 2024 uprising.

On August 22, 2024, S Alam notified Raizen that it was invoking force majeure and declaring the contract frustrated. The company argued that nationwide unrest following the student-led uprising, the change of government and subsequent financial restrictions imposed by Bangladesh Bank and other authorities had made performance impossible.

It said banks were prohibited from extending financial services to S Alam companies, preventing the negotiation of letters of credit and making payment impossible.

S Alam further claimed that its bank accounts had effectively been frozen and that it could neither take delivery of the cargo nor complete banking transactions. It therefore declared itself released from all obligations under the agreement.

Raizen immediately rejected the claims.

The seller argued that the contract's force majeure provisions benefited only the seller—not the buyer—and applied only when the seller was prevented from shipping sugar.

It also argued that payment could still have been made through alternative contractual mechanisms, including wire transfers against shipping documents, without relying on a Bangladeshi bank.

Raizen repeatedly demanded written confirmation that S Alam would honour both shipments, warning that failure to do so would amount to repudiation of the contract.

After receiving no such assurance, Raizen terminated the first shipment on September 2, 2024, while reserving its rights regarding the second installment and damages.

The arbitration tribunal agreed with the seller.

The award states that the contract incorporated SAL Rule 124, under which force majeure protections applied only to sellers prevented from shipping sugar and did not entitle buyers to avoid payment obligations.

The tribunal further concluded that the payment provisions expressly allowed payment by bank transfer against shipping documents in addition to letters of credit, meaning S Alam was not confined to financing through Bangladeshi banks.

The tribunal also found insufficient evidence that the restrictions imposed on S Alam made contractual performance legally or physically impossible. Instead, it held that the company's communications amounted to a repudiatory breach by announcing that it would no longer perform the agreement.

To quantify damages, the tribunal accepted that Raizen had hedged its exposure in the futures market after entering the contract and later unwound those positions following S Alam's repudiation.

Using prevailing market prices at the date of termination, the tribunal calculated losses of $36 per metric tonne, producing recoverable damages of $1.98 million based on the contractual quantity of 55,000 tonnes relating to the terminated first shipment.

In addition to damages, the tribunal awarded Raizen interest and directed S Alam to reimburse arbitration costs and legal expenses. The cover page of the award records SAL arbitration fees and costs of £32,430.50, equivalent to roughly $43,000 (around 52 lakh taka), exclusive of VAT.

The proceedings also show repeated attempts by the tribunal to secure S Alam's participation after arbitration commenced.

According to the award, SAL served notices, statements of claim and procedural orders by email and courier at the addresses specified in the contract. DHL twice reported that deliveries sent to S Alam's Chattogram office had been refused, prompting SAL to order further delivery attempts and remind the company of the arbitration rules. 

Despite multiple extensions, the tribunal recorded that S Alam did not file a statement of defence or otherwise participate in the proceedings, leading the case to be decided on the written evidence submitted by the claimant.

A separate DHL tracking record attached to the documents shows that the arbitration award was dispatched from London to Bangladesh in May 2026 but was eventually returned to the sender after delivery was not completed. 

The tracking history records one delivery attempt in Chattogram marked "delivery not accepted" before the shipment was returned to the United Kingdom.

Daily Waadaa sought comment from a representative of S Alam Group regarding the arbitration award but did not receive a response by the time of publication.

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Zulkernain Saer is an investigative journalist