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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Gunvor SA v Sky Oil & Gas Ltd (Previously Known As Keystone Trade Oil & Gas Group (UK) Ltd) [2018] EWHC 1189 (Comm) (16 April 2018) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2018/1189.html Cite as: [2018] EWHC 1189 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
B e f o r e :
____________________
GUNVOR SA |
Claimant |
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- and – |
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SKY OIL & GAS LTD (Previously known as Keystone Trade Oil & Gas Group (UK) Ltd) |
Defendant |
____________________
THE DEFENDANT did not appear and was not represented.
____________________
Crown Copyright ©
MR JUSTICE BUTCHER:
"- Cargo: Hong Ze Hu
- Buyer: Keystone
- Seller: Gunvor SA
- Quality: Gasoline as per Hong Ze Hu quality at loading (see attached)
- Quantity; 55'307mt +/- 5% in SO
- Parity: STS Hodeidah STS cost and equipment for Buyer's account
- Delivery: 1-2 August
- Price: Total of 37'000'000 USD. To be paid partly as fully as prepayment
- Payment/discharge program:
- Payment of 11.8 million USD latest by August 1st
- After the above payments have cleared Gunvor's account, Gunvor Will discharge 6'913MT into Fair Apollon (expected on August 1st)
- Then we should follow the following payment/discharge plan (Please bear in mind any new discharge has to be preceded by a payment. Cargo is sold 100% prepayment.
Date Payment From
Keystone in
USDDischarge quantity
in MTBefore Aug 01.aout 11'800'000 6'913 08.aout 4'356'409 6'913 15.aout 4'356'409 6'913 22.aout 4'356'409 6'913 29.aout 4'356'409 6'913 05.sept 4'356'409 6'913 12.sept 3'417'955 6'913 19.sept 6'916 Total 37'000'000 55,307
- Laytime: 36H +6H. Time to start counting as soon as the first sts operation starts.
- Demurrage: as per C/P rules.
- Determination of quality and quantity: Loadport of Hong Ze Hu, short tank sampling. Cost 100% on seller's account
- Law: English law, London high court
- STS costs: STS cost and equipment for Buyer's account
- Other terms: INCO TERMS Paris 2010
Additional 6 cargoes of 17'000MT Ron of 92
- Buyer: Keystone
- Seller: Gunvor SA
- Quality: as per Attached specs
- Quantity: 6 X 17'000MT +/-5% in B/O
- Parity: FOB Fujairah
- Delivery: 1 cargo per month (August to January) starting in tentatively 20- 31 August, to be confirmed and mutually agreed between buyer and seller latest on august 10th
- Price: APAG - FOB Singapore (S/barrel) - Gasoline 92 unleaded RIC PGAEYOO 6 plus premium of 1.2 USD/bbl
- Pricing: 5 around BL (2-1-2 or 2-0-2 in case of BL falling on holiday/weekend)
- Credit and Payment terms: Full prepayment prior loading based on Platts quotation 3 days prior first day of expected pricing. Settlement of the difference between provisional and final invoice to be paid 5 days after full pricing is known
- Laytime: 36 + 6 Hours
- Demurrage: as per CP
- Determination of quality and quantity: Load port shore tank sampling. Cost to be split 5050 between buyer and seller
- Law: English law, London high court
- Other terms: INCO TERMS Paris 2010."
"1. BUYER
Keystone Trade Oil & Gas Group (UK) Limited, 14 Basil Street, London SW3 1AJ, United Kingdom.
2. SELLER
Gunvor SA, 80-84 Rue Du Rhone, 1204 Geneva, Switzerland.
3. PRODUCT
Gasoline
...
5. QUALITY
Gasoline meeting Aden specs and as per Hong Ze Hu quality at loading and as agreed between the traders at the time of the transaction.
The seller's obligations with regard to the quality of the product supplied are limited solely to supplying product which corresponds with the description and any specifications set out in the contract.
All other conditions, warranties, or other terms whether express, implied or which would otherwise be imposed by statute with respect to quality, satisfactory quality, suitability or fitness for any purpose whatsoever of the product are hereby excluded.
6. DELIVERY
1 safe port 1 safe berth or discharging place CIF Hodeidah, Yemen ex. Seller's delivering/mother vessel Hong Ze Hu by means of STS transfer onto buyer's receiving/daughter vessel(s) mt TBN/sub(s) during the period August 01-02, 2016.
The seller's obligations with regard to the timing of deliver will be fulfilled provided it could have been reasonably anticipated that upon departure from the loading port the vessel would be able to reach the discharge port and give notice of readiness to deliver prior to 24:00 on the last day of the delivery period. In the event of delivery being a part cargo, seller may give nor after expiry of the delivery period as long as the vessel arrives at the delivery port within the delivery period.
...
8. STS/LIGHTERING OPERATIONS
All lightering operations to be conducted consistent with OCIMF/ICS STS transfer guide and to be organised directly by buyer.
STS equipment and mooring master to be provided by buyer but always to be acceptable to the delivering vessel owners and sellers.
Receiver must supply documents stating the following for lighter vessel:
(A) Be classed with a classification society member of IACS
(B) Be entered with a reputable P & I club, member of the international group of P&I clubs.
(C) Have all HFR class, trading and statutory certificates, records and surveys valid and up to date.
(D) All lightering vessels to be ISPS approved.
(E) Master/owner has final say on acceptance of lighter barge. Lightering/sts costs to be 100% for buyer's account.
If any, all port charges at discharge ports/sts location are for buyer's account and will be settled directly between buyers and agents/authorities at disport.
Any delays in lightering operation due to delay in providing above information will be for buyer's account.
Buyer shall assume and be responsible for payment of any taxes, duties, imposts, fees, charges and dues in respect of the oil or vessel arising in the place of arrival or transhipment of the vessel, if any applicable.
...
10. PRICE/AMOUNT
CIF Hodeida, Yemen by ship-to-ship transfer based on B/L quantity. Total amount to be 37,000,000 USD.
11. PAYMENT TERMS
Payment for the product shall be made in United States Dollars by telegraphic transfer in immediately available funds, without any deduction, offset or counter-claim, at the counters of seller's designated bank, as stated in seller's invoice.
100% prepayment in the amount of USD 37,000,000 for oil shall be made by buyer in US Dollars by telegraphic transfer in full net cash in immediately available funds without deductions, discount withholdings, setoff, or counterclaim upon presentation of seller's commercial proforma invoice (fax/swift/e-mail PDF invoice acceptable) based on bill of lading quantity of MT Hong Ze Hu onto seller's nominated bank account (to be advised by seller in due course).
The prepayment to be effected as follows:
- 1st payment of 11,800,000.00 USD latest by 01st August 2016;
Once Gunvor has received the 1st prepayment amount, Gunvor will authorise discharge of 6,913 MT into buyer's daughter vessel MT Fair Apollon;
- 2nd payment of 4,356,409.12 USD latest by 15th August 2016;
Once Gunvor has received the 2nd prepayment amount, Gunvor will authorise discharge of 7,000 MT into buyer's daughter vessel.
- 3rd payment of 4,356,409.12 USD latest by 22nd August 2016;
Once Gunvor has received the 3rd prepayment amount, Gunvor will authorise discharge of 7,000 MT into buyer's daughter vessel.
- 4th prepayment of 4,356,409.12 USD latest by 29th August 2016;
Once Gunvor has received the 4th prepayment amount, Gunvor will authorise discharge of 7,000 MT into buyer's daughter vessel.
- 5th prepayment of 4,356,409.12 USD latest by 05th September 2016;
Once Gunvor has received the 5th prepayment amount, Gunvor will authorise discharge of 7,000 MT into buyer's daughter vessel.
- 6th prepayment of 4,356,409.12 USD latest by 12th September 2016;
Once Gunvor has received the 6th prepayment amount, Gunvor will authorise discharge of 7,000 MT into buyer's daughter vessel.
- 7th prepayment of 3, 417,954.40 USD latest by 19th September 2016;
Once Gunvor has received the 7th prepayment amount, Gunvor will authorise discharge of the balance quantity of abt 13,394 MT into buyer's daughter vessel.
Any new discharge has to be preceded by payment. Cargo is sold 100% prepayment.
The payment is deemed to be received upon the seller's bank confirmation of the receipt of funds onto seller's designated bank account.
If the buyer fails for whatever reason to procure the transfer of funds for any provisional or final invoice within the time stipulated above, the seller shall have the right to terminate the contract forthwith without in any way limiting any other remedies available to the seller.
Notwithstanding and without prejudice to the above, the seller shall have no obligation to ship/deliver the product unless or until the seller receives the funds in accordance with above and in the event of any delay by the buyer, the seller may, at its option, extend the time for performance of any of its obligations under the contract. The buyer shall be liable for any loss or delay arising as a result, which (if known at the time) shall be invoiced to the buyer and payable as part of the price.
If payment due date falls on a Saturday or a New York banking holiday other than a Monday, payment will be effected on the preceding New York banking day. If payment due falls on a Sunday or a Monday New York Banking Holiday, payment will be effected on the following New York banking day.
In the event of late payment by the buyer, where such delay has not been caused by the seller's inability to submit the required documents on time, the seller reserves the right to charge interest at the rate of LIBOR plus 4 percent per annum in effect on such date. The LIBOR will be equal to the London Interbank offered rate for U.S. Dollars, based on an interest period of 1 month, rounded upwards if necessary to the nearest 1/32 of one percent, administrated by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate as displayed on page LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate). Should there be no such quotation on the due date, the quotation that appears on the first available preceding date shall apply. Interest will run from the due date (inclusive) until the day payment is received into the seller's account (exclusive), calculated on the basis of a 365/360 days per year, pro rata temporis, on the relevant outstanding amount(s) until payment notwithstanding the termination of the contract for any reason whatsoever.
This provision shall not be construed as an indication of any willingness on the part of the seller to provide extended credit as a matter of course and shall be without prejudice to any rights and remedies which the seller may have under the contract or otherwise.
...
17. LAW & JURISDICTION
This contract shall be governed by and construed in accordance with English law. Any controversy, dispute or claim whatsoever arising out of or in connection with this contract or the breach thereof shall be subject to the exclusive jurisdiction of the High Court of Justice in London. For the avoidance of doubt, this will not prevent either party from taking proceedings in any other jurisdiction to obtain security or ancillary relief or to enforce any order or judgement.
...
25. EVENTS OF DEFAULT/TERMINATION APPLICABLE IF PRE- PAYMENT
An event of default ("Event of Default") shall mean any of the following:
(A) The failure of the buyer to make any payment under this contract in full by the due date without offset or to take full delivery in accordance with the provisions of this contract;
(B) The failure of the buyer to provide any payment undertaking, letter of credit, standby letter of credit, parent guarantee, or credit support instrument in accordance with the terms of this contract;
(C) The failure of the buyer to comply with its other obligations under this contract;
(D) Any representation or warranty made by the buyer under the contract shall prove to be untrue when made in any material respect;
(E) Any default under any letter of credit or other credit support instrument or any failure by the issuer of such letter of credit or credit support instrument to pay when required or the occurrence of any event set out in clause (F) above in respect of the issuer of such letter of credit or credit support instrument; or
(F) the failure by the buyer to comply with any of its obligation towards the seller pursuant to any contract other than this contract.
Upon the occurrence of an Event of Default and after notification to the buyer in writing of the occurrence of such Event of Default, any and all payments due from the buyer to the seller shall become immediately due and payable and the seller may (but shall not be obliged to) in its sole discretion:
(A) Notify the buyer of an early termination date (which shall be no earlier than the date of such notice) on which date this contract shall terminate (the 'early termination date');
(B) Withhold any payments due to the buyer until such Event of Default is cured;
(C) Suspend or postpone performance of its obligations under the agreement until such Event of Default is cured or until the seller exercises its right of termination hereunder;
(D) Retain documents or refuse to permit the discharge of any product to the buyer; and/or
(E) Stop or arrest any product in transit, at loading or at discharge or take any other action including the sale of the product to a third party to satisfy all amounts which the buyer owes to the seller to protect the seller's rights as the seller, in its absolute discretion, deems appropriate.
If a notice of an early termination date is given under this clause, the early termination will occur on the designated date whether or not the Event of Default of the buyer is then continuing.
If an Event of Default occurs and an early termination date is established, the seller may (in its absolute discretion) treat this contract as terminated by repudiation on the part of the buyer. The seller may then (in its absolute discretion) proceed to set off any or all amounts which the buyer owes to the seller (whether under this contract, any other contract and/or any account whatsoever) against any or all amounts which the seller owes to the buyer (whether under this contract, any other contract and/or on any account whatsoever). The seller may (in its absolute discretion) declare in the early termination notice that title to the product, where title has passed to the buyer prior to that notice, shall revert to the seller. Where the seller makes such a declaration, title to the product shall revert to the seller upon sending the notice and the seller may, pursuant to (E) above, take such action in relation to the product as is necessary to protect its rights, including the sale of the product to a third party to satisfy all amounts due.
If the seller suspends the performance of its obligations in accordance with
(C) above, the seller shall be under no obligation to perform at a later date an obligation the time for the performance of which has expired during the suspension.
The buyer shall indemnify and hold the seller harmless from all losses, damages, costs, and expenses including legal fees that the seller would not have incurred but for the event of default and/or the exercise by the seller of any of its remedies hereunder.
The provisions of this clause and the seller's rights hereunder shall be without prejudice to, shall be additional to and shall in no way limit or exclude any right of termination, setoff, combination of accounts, lien, or other right to which the seller is at any time otherwise entitled (whether by agreement, operation of law, contract, or otherwise)."
(1) the value of the 5,988.567 mt of gasoline that was discharged from the Hong Ze Hu and for which, on the basis to which I have just referred, the Defendant never paid, namely for the sum of US$4,006,291.44; and
(2) the market losses in relation to the Remaining Product which the Defendant wrongfully failed to pay for or take delivery of, calculated on the date the contract was terminated. That sum is claimed for in the amount of US$11,539,527, together with the sum of US$438,750 being the cost to the Claimant of accessing what it says was the relevant available market, namely in Fujairah not in Yemen.
The Claimant also claims interest on those sums and its costs in these proceedings.
"...will treat your failure to perform as a repudiation of the contract which Gunvor will accept and will terminate the contract."
This message, the Claimant contends, constituted a clause 25 notice of early termination which detailed an early date of termination, namely 12 o'clock on 1 September 2016. Secondly, when that deadline elapsed without payment from the Defendant, Mr Chamayou sent a second message at 15:02 on 1 September 2016 which terminated the contract.