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ENGLISH SALE OF GOODS LAW

Lloyd's Maritime and Commercial Law Quarterly

ENGLISH SALE OF GOODS LAW

Djakhongir Saidov *

211. BP Oil International Ltd v Vega Petroleum Ltd, Dover Investments Ltd 1
FOB (Incoterms 2000)—whether the buyer entitled to an “FOB” delivery or confined to the right to lift the crude oil—seller’s nomination of laycan-termination—unjust enrichment—failure of basis—Sale of Goods Act 1979 (SGA), s.54—estoppel by convention and by representation—time bar—whether restitution is subject to difference in value
Between June 2013 and February 2015, BP Oil International Ltd (“buyer”) entered into a series of contracts which provided for sale of 211,387 barrels of Gulf of Suez Mix crude oil (“GOSM”) “FOB Ras Shukheir Terminal”. Pursuant to those contracts, the buyer paid a total of US$17,235,448 to the First Defendant, Vega Petroleum Ltd, and the Second Defendant, Dover Investments Ltd (together “the Defendants”). The contracts were on materially identical terms. Clause 6 provided:
“Delivery shall be given and taken FOB RAS SHUKHEIR TERMINAL.[2]
At the Buyer’s option delivery can be given and taken FIP at the inlet flange of the SUMED system in AIN SUKHNA REGION, EGYPT. However such option shall be mutually agreed between the Buyer and the Sellers, provided that, such option shall not result in any additional expense or delay in payment to the Sellers.”
Clauses 7 and 8 provided:
“For each Month M, the fixed price per US barrel shall be the mean of the Platts Dated Brent assessments as published during the period from and including the first day of Month M up to and including the last day of Month M adjusted by a differential ‘D’.
For each Month M and by no later than the COB London of the 5th of Month M+1, Buyer will notify Vega of the value of ‘D’.
For the purposes of pricing and payment, the quantity of oil available to be lifted (the ‘Invoiced Quantity’) in each Month shall equal the Estimated Qty for Month M plus or minus any Difference allocated to such Month M under the provisions of clause 5 above.”
Clause 32.3 (time-bar) provided:
“… any claim arising under the Agreement and any dispute under Section 38 shall be commenced within 2 years of the date on which the crude oil was delivered or, in the case of a total loss, the date upon which the crude oil should have been delivered. Failing which the claim shall be time barred and any liability or alleged liability of the other party shall be finally extinguished.”

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