GREAT ELEPHANT CORPORATION V TRAFIGURA BEHEER BV AND OTHERS (THE "CRUDESKY")

[2013] EWCA Civ 905, Court of Appeal (Civil Division), Lord Justice Longmore, Lord Justice Tomlinson and Lord Justice Underhill, 25 July 2013

Charterparty (voyage) - Sale contracts - Cargo of oil loaded in Port Harcourt without requisite clearance - Vessel restricted from sailing - Demurrage - Force majeure

The oil tanker Crudesky, owned by Great Elephant, was chartered to Trafigura on a voyage charter on BPVOY3 terms. On 31 August 2009 she started loading a cargo of crude oil bought by Trafigura from Vitol SA who had in turn bought it from Vitol Asia, to whom it was sold by China Offshore Oil Singapore International Pte Ltd (COOSI). The sale and purchase contract between Vitol and COOSI incorporated Incoterms 2000 under which the seller was required to clear the goods for export and Total's General Terms and Conditions for FOB sales of Crude Oil. The loading occurred at a terminal off Port Harcourt, Nigeria without clearance from the headquarters of the Nigerian Department of Petroleum Resources (DPR). This was due to an erroneous assumption of the lifting supervisor of the terminal operator (Total) that verbal authorisation by a representative of DPR in Harcourt was sufficient. The loading was completed on 1 September 2009 when the required clearance was also granted, yet it was revoked on the same day. On 7 September 2009 Total was briefed by the headquarters of DPR that loading without clearance was a violation of statutory procedures. Subsequently the vessel was detained by authorities and released against payment of a fine imposed by Nigerian authorities in October 2009. Shipowners Great Elephant claimed demurrage and other sums accrued during delay from Trafigura pursuant to the charterparty. Trafigura in turn sought to pass on to the Vitol companies the liability it so incurred and some additional costs under their sale contract (which was on the terms of Nigerian National Petroleum Corporation - NNPC - Conditions), and the Vitol companies sought to pass on their liability to COOSI. At first instance, Teare J had approved the owners' demurrage claim in part and had held that the Vitol companies had no liability to Trafigura. Great Elephant appealed on the unsuccessful part of the demurrage claim and Trafigura appealed on downstream liability.