19/10/2010

KG Bominflot Bunkergesellschaft für Mineraloele v Petroplus Marketing AG

This was an appeal from parts of the decision of Field J (reported at [2009] 2 Lloyd’s Rep.269) relating to various preliminary issues concerned with the implied obligations of the FOB seller as regards the ability of a cargo of gasoil to remain of satisfactory quality and on specification for a reasonable time after delivery. On the appeal, the seller accepted that, subject to an exclusion clause, there would be an implied term (by virtue of s.14(2) of the SGA 1979 and at common law) that the cargo must be capable on delivery of remaining of satisfactory quality for a reasonable period but argued (a) that there was no further implied term that the cargo was capable on delivery of remaining on spec for a reasonable period; and (b) that both implied terms were in any event excluded by the terms of the contract which provided that there were “no gauarantees, warranties…express or implied of merchantability, fitness or suitability of the oil for any particular purpose”. The Court of Appeal allowed the appeal on the first point but rejected it on the second. On the first point the Court of Appeal concluded that there was no justification for implying the additional term. On the second point the Court of Appeal concluded that there was a long-standing judicial consensus at the highest level that in order to exclude a true condition it was necessary to specifically refer to “conditions”: reference to warranties or guarantees was not sufficient. The seller has sought permission to appeal on the second point.

Philip Edey QC appeared for the Respondent/Buyer, KG Bominflot, instructed by .

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