Mamidoil-Jetoil Greek Petroleum Company SA v Okta Crude Oil Refinery AD [2001] EWCA Civ 406 (22 March 2001)

Mamidoil-Jetoil Greek Petroleum Company SA v Okta Crude Oil Refinery AD [2001] EWCA Civ 406 (22 March 2001)

Clause 1 of the 1993 contract imposed an obligation on the Refinery to allow Jetoil to handle all crude oil purchased for its own account, not merely an option. The contract was not binding for a fixed ten-year term unless the handling fee was agreed for future periods; in the absence of agreement on the fee, the contract did not continue, and a reasonable fee could not be implied beyond the agreed periods.

Citation
[2001] EWCA Civ 406
Parties
Appellant / Respondent to Cross Appeal: Mamidoil-Jetoil Greek Petroleum Company SA; Respondent / Cross Appellant: Okta Crude Oil Refinery AD
Jurisdiction
England and Wales
Judgment Date
22 March 2001
Procedural Posture
Appeal and Cross Appeal From Commercial Court, Queen's Bench Division / Court of Appeal (civil Division) Judgment
Outcome
Appeal dismissed; cross-appeal dismissed.
Legal Topics
Contract Construction, Implied Terms, Exclusive Dealing, Reasonable Price, Enforceability of Agreements to Agree
Contract Law Commercial Law Contract Construction Implied Terms Exclusive Dealing Reasonable Price Enforceability of Agreements to Agree

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Parties

Mamidoil-Jetoil Greek Petroleum Company SA

Appellant / Respondent to Cross Appeal

Okta Crude Oil Refinery AD

Respondent / Cross Appellant

Procedural Posture

Appeal and Cross Appeal From Commercial Court, Queen's Bench Division / Court of Appeal (civil Division) Judgment

Legal Issues

  1. 1 Whether the 1993 contract between Jetoil and the Refinery imposed an obligation on the Refinery to allow Jetoil to handle all crude oil purchased for its own account (exclusivity)
  2. 2 Whether the 1993 contract was binding for a fixed ten-year term or only for periods where the handling fee was agreed (enforceability and duration)

Ratio Decidendi

Clause 1 of the 1993 contract imposed an obligation on the Refinery to allow Jetoil to handle all crude oil purchased for its own account, not merely an option. The contract was not binding for a fixed ten-year term unless the handling fee was agreed for future periods; in the absence of agreement on the fee, the contract did not continue, and a reasonable fee could not be implied beyond the agreed periods.

Court Disposition

Appeal dismissed; cross-appeal dismissed.

Orders

  • Declaration that the 1993 contract imposed an obligation on the Refinery to allow Jetoil to handle all crude oil purchased for its own account during the periods for which the handling fee was agreed.
  • No continuing obligation after 1999 in the absence of agreement on the handling fee.