The OW Bunker Group had gone into insolvency. Purchasers from them were no concerned at the possibility, under the industry standard tersm, of having to pay twice.
Held: The owners’ appeal from the arbitration award failed.
The court rejected the owners’ argument that the contract was one for the sale of goods, holding that it was necessary to look behind the language of the contract to ascertain exactly what the parties had undertaken to do. OWBM had not undertaken to transfer property in the bunkers delivered to the vessel because both parties had specifically envisaged that some, if not all of them, were likely to have been consumed in the vessel’s engines before the time for payment had come. When that happened they ceased to exist and it became impossible to transfer property in them: ‘In these circumstances the question arises, as already mentioned, what was the consideration for the money payment which the Owners agreed to make if it was not the transfer of title? In my judgment the true nature of the parties’ bargain was that OWBM would deliver or arrange for delivery of the bunkers, which the Owners would be immediately entitled to use for the propulsion of the vessel.’
Males J approved the arbitrators’ reasoning in paragraph 51 of the award where they had said: ‘ Stripped of all unnecessary detail, the deal between the parties was that OWBM would ensure delivery of the bunkers, the use of which would be immediately available to the Owners, who would pay for them according to OWBM’s invoice. Such an agreement does quite obviously resemble in some respects a contract of sale, but its terms and their performance do not to any extent rely on property or title or their transfer.’
Obiter, Males J expressed his opinion on an appeal by OWBM which would only have arisen for decision if the appeal had succeeded, and granted permission to appeal to the owners, but refusing that of OWBM for its own cross appeal.
Males J
[2015] EWHC 2022 (Comm), [2015] 2 Lloyd’s Rep 563
Bailii
England and Wales
Citing:
Cited – FG Wilson (Engineering) Ltd v John Holt and Company (Liverpool) Ltd ComC 5-Sep-2012
. .
Cited by:
At ComC – PST Energy 7 Shipping Llc Product Shipping and Trading SA v OW Bunker Malta Ltd and Others CA 22-Oct-2015
The oil owners had contracted for its transport with OWBM aboard Res Cogitans under standard terms which would allow the captain to use the oil for navigation before transfer of the title in the oil. The court was now asked whether the agreement . .
At ComC – PST Energy 7 Shipping Llc and Another v OW Bunker Malta Ltd and Another SC 11-May-2016
Parties had entered into a bunker supply contract which contained a retention of title clause in favour of the supplier. It purported to allow the buyer to use the goods before title came to be passed.
Held: The owner’s appeal failed. It did . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 02 January 2022; Ref: scu.550208
