Lloyd's Maritime and Commercial Law Quarterly
OF FOB SALES, SELLERS’ OBLIGATIONS AND DISCLAIMERS
Bominflot v. Petroplus (The Mercini Lady)
The Sale of Goods Act 1979 has a great deal to say about the qualities that goods sold have to have. By contrast, it says very little about just when they have to have those qualities. Field J faced a neat little conundrum based on this point in KG Bominflot Bunkergesellschaft Für Mineralöle mbH & Co KG ¨ v. Petroplus Marketing AG (The Mercini Lady).1 His answer, while understandable, nevertheless has its difficulties.
PM bought some 40,000 tonnes of gasoil from BB. The contract was fob Antwerp for shipment to Spain. It provided detailed specifications of, among other things, the permissible sediment levels; it excluded any “guarantees, warranties or representations, express or implied, or [sic] merchantability, fitness or suitability of the oil for any particular purpose or otherwise, which extend beyond the description of the oil set forth in this agreement”; and it stipulated that an expert inspector’s report on the oil’s condition when in the Belgian shore tanks was to be “final and binding for both parties, except in case of fraud or manifest error”. Having received a clean bill of health from the relevant inspectors in Antwerp, the cargo was duly shipped; but despite an entirely uneventful four-day voyage it was over-sedimented and unusable on arrival in El Ferrol. Did the buyers have a claim for damages (quantified at something like $3 million) against the sellers? The sellers understandably said they did not. This being an fob contract, risk and all other responsibility passed to the buyers on shipment: the sellers’ duty had been to load a cargo of the correct specification in Belgium, no more and no less, and under the contract the clean inspector’s report was conclusive evidence that they had done just that.
At first sight one might have thought the sellers’ position unassailable: but, on a preliminary issue, Field J refused to accept it. His argument was essentially this. Where goods were to be sent to the buyer, the seller’s duty was to provide goods that were satisfactory at the time of shipment and also to ensure that they remained so for a reasonable time afterwards. This rule applied to an fob contract as much as to any other; the oil was admittedly off-specification on arrival a reasonable time—four days—after shipment; and hence the inspector’s certificate was beside the point, since it only precluded argument as to the oil’s condition at shipment.
On one point, it is suggested that this judgment is clearly right. In so far as there is any duty owed by a seller in respect of the continued condition of goods after shipment, there is no reason to distinguish fob contracts from any others. Despite some sceptical
LLOYD’S MARITIME AND COMMERCIAL LAW QUARTERLY
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