This note traces the convoluted path of the reported judicial proceedings relating to the demise of the International Tin Council [ITC].1 In particular, it attempts to deal with the rulings relating to the measure of damages recoverable by disappointed sellers of tin under s. 50(3) of the Sale of Goods Act 1979.2

The ITC was set up in 1971 as a result of an agreement between those sovereign states which were producers or consumers of tin. Their objective was that the ITC should smooth out fluctuations in the price of the commodity by acting as a buyer and seller of a buffer stock, inter alia, on the London Metal Exchange [LME]. During the early 1980s, the supply of tin on the world market so greatly exceeded demand that the cost of buying buffer stocks sufficient to maintain the price soared. Eventually, there reached a point where the purchase of a buffer stock sufficiently large for this purpose became so expensive that the governments funding the operation unexpectedly refused to provide any further funds. On 24 October 1985, the manager of the buffer stock was forced to announce that he could no longer meet his commitments. As a result, there was a drastic fall in the price of tin and the LME closed the market on the same day. The sums at stake were enormous and those left with losses pursued two different avenues in their search for compensation: (a) against the ITC, etc.; and (b) against buyers reluctant to complete purchases.

A number of different actions were launched to recoup their losses from the ITC and its member states, both by those traders who had tin contracts with the ITC and those banks who had loaned money to it.3

Actions against member states of the ITC were struck out on the grounds that the ITC was a different legal entity from its members.4