KG BOMINFLOT BUNKERGESELLSCHAFT FÜR MINERALÖLE MBH & CO KG V PETROPLUS MARKETING AG

[2009] EWHC 1088 (Comm),Queen’s Bench Division, Commercial Court, Mr Justice Field, 22 May 2009

Sale of goods – Goods rejected by buyer – Whether an implied term of the sale contract that goods capable of enduring a normal voyage such that upon arrival they would still be of satisfactory condition – Whether an implied condition of the sale contract that goods reasonably fit for the purpose of remaining within the specifications of the sale contract during their time on board the designated vessel and for a time thereafter – Whether defendant’s obligation limited to supplying goods within specification upon shipment FOB – Sale of Goods Act 1979, section 14

The defendant seller had sold gasoil to the claimant buyer FOB Antwerp to be shipped on board Mercini Lady. The buyers rejected the goods, alleging that upon arrival to El Ferrol, the gasoil no longer conformed to the sediment specifications in the sale contract, and brought proceedings alleging broadly that the sellers were in breach of implied terms under the Sale of Goods Act 1979. Buyers relied on an express term of the sale contract (clause 18) and denied that the contract contained the implied terms asserted by the buyers. Four preliminary issues fell to be determined by Field J. The first question was whether it was an implied term of the sale contract, pursuant to section 14(2) of the Sale of Goods Act 1979 and/or at common law that the goods would, on delivery under the sale contract, be capable of enduring a normal voyage such that upon arrival at their destination following such a normal journey (and for a reasonable time thereafter) they would still be of satisfactory quality and/or in accordance with the contractual specification. To this, Field J responded that there was not, but there was an obligation on the seller under section 14(2) of the 1979 Act and at common law to deliver gasoil that was of satisfactory quality not only when the cargo was delivered on to the vessel but also for a reasonable time thereafter, and under the term implied at common law, the gasoil had to remain in accordance with the contractual specification after delivery on the vessel for a reasonable period. Secondly, on the assumption that defendants knew from the terms of the sale contract that the goods were to be carried on board Mercini Lady or substitute, was it an implied condition of the sale contract, pursuant to section 14(3) of the Sale of Goods Act 1979, that the goods would, on delivery under the sale contract, be reasonably fit for the purpose of remaining, during their time on the vessel and for a reasonable time thereafter, within the specifications set out in the sale contract?, to which Field J responded in the negative – the question to ask was only what was a reasonable time in the circumstances for the goods to remain fit for purpose. Thirdly, the defendants' obligations under the Sale of Goods Act under section 14(2) and/or at common law were not limited to the supply of goods which complied with their contractual specifications upon shipment. Finally clause 18 of the sale contract did not preclude the implication of the term identified in the answer to question 1. In the judgment, Field J notably rejected the argument that the implication into FOB sales terms of a warranty of merchantability was any different from its implication into CIF or C&F sales. Goods sold under an FOB contract must be merchantable not only upon delivery but also for a reasonable time thereafter. He also held that there was no good reason in logic, common sense or commerce for confining the application for Mash & Murrell to sales of perishable goods.