27/06/2012

Great Elephant Corporation v Trafigura Beheer BV

In a judgment handed down by Teare J on 27 June 2012, the Commercial Court decided a dispute relating to a chain sale of crude oil from Nigeria that went wrong.  In breach of local regulations, Total, the operator of the Akpo oil terminal, commenced the loading of the vessel "Crudesky" without the presence of a representative of the Nigerian Oil Ministry, because it believed that the irregular loading had been authorized.  This led to the vessel being detained by the Nigerian authorities for a month and a half, only being released upon payment by Total of a "fine" of US$12 million.  The buyers at the top of the chain of sale contracts incurred considerable demurrage as a result of the delay, and sought to pass their losses down the chain. In a judgment that considered the law on the Sale of Goods Act implied terms of right to sell and quiet possession, and the law on force majeure, Teare J held that the "fine" demanded by the Nigerian authorities had been illegal, but the seller at the top of the chain could not pass its losses down the chain of sale contracts because the force majeure clause in the sale contracts applied.

Charles Kimmins QC and Socrates Papadopoulos, instructed by Ince & Co., represented the successful intermediate sellers Vitol.