GLENCORE ENERGY UK LTD V TRANSWORLD OIL LTD (THE "NARMADA SPIRIT")

[2010] EWHC 141 (Comm), Queen's Bench Division, Commercial Court, The Hon Mr Justice Blair, 3 February 2010

Sale of goods - Contract - Whether contract came to an end or was affirmed - Whether the claim was time barred - Measure of damages for breach - Pricing declaration - Incorporation of revised edition of standard terms

Glencore as buyer claimed against Transworld as seller in respect of a contract on FOB terms for the sale of a cargo of oil, which Glencore in turn had made arrangements to onsell. On the morning of 30 March 2008 the tanker Narmada Spirit was waiting to berth. The crew of a tug that was to assist in that operation was subject to a kidnapping, which in the event was resolved quickly. Transworld contended that the tanker could then have lifted the cargo, but that by then it had sailed away. Thereafter the parties sought to put in place alternative arrangements, but these ended in failure. The sale contract contained a pricing declaration clause whereby the price was determined by the average of the price of Brent crude over five days following declaration by Glencore. Such declaration was made on 26 March 2008 for 27 March to 2 April 2008 as the pricing period. Glencore's position was that whatever the status of the contract of sale following the abortive lifting, in a telephone conversation of 8 April 2008 the parties had mutually affirmed the contract. The pricing declaration had by then become part of the contract. Transworld's contention was that loading not having taken place in accordance with the contract, the contract had expired unperformed.