JJ Darboven Hamburg & JJ Darboven Poland: A Record of Default

On April 12, 1994, during a telephone call between the Vice President of Polish Coffee Corporation (Gdynia, Poland) and Ryszard Lesinski, board member of JJ Darboven Poland sp. z o.o. (Rumia, Poland) — a wholly owned subsidiary of JJ Darboven Hamburg — the parties agreed on the sale of three raw coffee parcels: 50 tonnes of Cameroon Robusta grade 2, 100 tonnes of Vietnam Robusta grade 2, and 100 tonnes of Vietnam Robusta grade 1. Polish Coffee Corporation issued written contract confirmations the following day, April 13, 1994. JJ Darboven Poland never countersigned nor objected — which under international trade law and German commercial code (HGB) constituted legal acceptance.

The 50 tonnes of Cameroon Robusta were delivered and paid without issue. However, as global coffee prices rose sharply through April–May 1994, JJ Darboven Poland refused to deliver the Vietnam Robusta parcels, claiming non-payment — despite the fact that Polish Coffee Corporation had already prepaid for the first 50-tonne tranche of Vietnam Robusta grade 1, and was legally entitled under the contract to withhold further prepayment until first delivery had been made.

Polish Coffee Corporation attempted to resolve the matter directly, and even appealed personally to JJ Darboven Hamburg. On June 15, 1994, JJ Darboven Hamburg responded in writing that it must remain "strictly neutral" and could not intervene with its subsidiary — despite being the parent company and in full control of it.

Polish Coffee Corporation filed for arbitration on June 20, 1994. After a full hearing on November 7, 1994, the Schiedsgericht des Deutschen Kaffee-Verbandes e.V. issued its ruling on December 6, 1994: JJ Darboven Poland was found to have unlawfully withdrawn from both Vietnam Robusta contracts and was ordered to pay US$ 80,100 in damages (calculated against London terminal exchange closing prices on the last contractual delivery day), plus DM 5,393.91 in arbitration costs. The award was signed by all three arbitrators: Klaus Zierau (Chairman), Ludwig Sprengel, and Jörn-Hinrich Christen.

JJ Darboven Poland never paid. Enforcement attempts in Poland were rejected by the Gdansk District Court in 1999 on jurisdictional grounds. On May 9, 2000, the European Coffee Federation blacklisted JJ Darboven Poland sp. z o.o. on request of the Deutscher Kaffee-Verband e.V. Hamburg — one of the most serious sanctions in the European coffee trade. JJ Darboven Hamburg actively lobbied against making the blacklist publicly accessible on the internet.

On January 24, 2003, the Hanseatisches Oberlandesgericht Hamburg (11th Civil Senate, case reference 11 Sch 6/01, presided by Judge Dr. Büchel) declared the 1994 arbitration award fully enforceable under German law. When Polish Coffee Corporation's lawyers immediately attempted to enforce it by garnishing JJ Darboven Hamburg's assets, JJ Darboven GmbH & Co. KG responded in writing on August 13, 2003, denying any financial relationship with JJ Darboven Poland — effectively shielding the subsidiary from payment.

The debt — principal of US$ 80,100, arbitration costs of DM 5,393.91, plus over thirty years of accumulated interest — remains unpaid to this day.

Visit jjdarbovenfacts.com for the whole story and view the case documentation.