NEWLAND SHIPPING AND FORWARDING LTD V TOBA TRADING FZC

[2014] EWHC 661 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Leggatt, 12 March 2014

Sale of goods - Sums advanced under previous contracts - Sale contract providing for discount as means of repayment - Sale contract terminated - Whether unjust enrichment

The claimant, Newland, had sold two cargoes of gasoil and gasoline to the defendant, Toba, for which substantial advance payments were made but which were never shipped. New contracts were concluded under which Newland undertook to deduct 20 per cent from the purchase price to give credit for the advances. One of these, the contract at issue, was dated 17 March 2011 and was for the sale of 5,000mt +/- 10 per cent in seller's option of hydropurified gasoil to be delivered CPT Serkhetabad Station, Turkmenistan. This contract was terminated by Newland in April 2011 on the ground that payment had not been made within two banking days of the final price being established, as required by clause 7. In this action Newland claimed sums said to be payable by Toba upon the termination of the contract after Toba failed to pay for goods which had been shipped. Toba denied that there had been a valid termination and that any of the sums claims were recoverable. It counterclaimed for restitution of the advance payments to which Newland argued that any rights under the first contracts had been replaced by rights under the subsequent contracts.