BP Gas Marketing Ltd v La Societe Sonatrach & Anor [2016] EWHC 2461 (Comm) (07 October 2016)

BP Gas Marketing Ltd v La Societe Sonatrach & Anor [2016] EWHC 2461 (Comm) (07 October 2016)

The court held that the figure '51.41' in clause D2.2.2(ii)(b) of the JSA is a constant, reflecting the regulatory maximum Wobbe index, and not a variable or proxy for operational Wobbe. The formula must be applied as written. No implied terms as contended for by Sonatrach are to be read into the JSA. There was no agreement at the September 2006 Steering Committee meeting to amend the JSA, nor did BP breach any obligation of good faith. The invoices issued by BP are valid and enforceable.

Citation
[2016] EWHC 2461 (Comm)
Parties
Claimant: BP Gas Marketing Limited; First Defendant: La Societe Sonatrach; Second Defendant: Sonatrach Gas Marketing UK Limited
Jurisdiction
England and Wales
Judgment Date
07 October 2016
Procedural Posture
Commercial Contract Dispute / High Court Trial Judgment
Outcome
Claim allowed
Legal Topics
Contract Interpretation, Implied Terms, Cost Allocation, Good Faith Obligations, Amendment of Contract, Enforcement of Invoices
Contract Law Commercial Law Energy Law Contract Interpretation Implied Terms Cost Allocation Good Faith Obligations Amendment of Contract +1 more

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Parties

BP Gas Marketing Limited

Claimant

La Societe Sonatrach

First Defendant

Sonatrach Gas Marketing UK Limited

Second Defendant

Procedural Posture

Commercial Contract Dispute / High Court Trial Judgment

Legal Issues

  1. 1 Proper construction of clause D2.2.2(ii)(b) of the Joint Shipper's Agreement (JSA) regarding nitrogen cost allocation
  2. 2 Whether implied terms contended for by Sonatrach are part of the JSA
  3. 3 Whether the parties agreed to amend the JSA at the September 2006 Steering Committee meeting

Ratio Decidendi

The court held that the figure '51.41' in clause D2.2.2(ii)(b) of the JSA is a constant, reflecting the regulatory maximum Wobbe index, and not a variable or proxy for operational Wobbe. The formula must be applied as written. No implied terms as contended for by Sonatrach are to be read into the JSA. There was no agreement at the September 2006 Steering Committee meeting to amend the JSA, nor did BP breach any obligation of good faith. The invoices issued by BP are valid and enforceable.

Court Disposition

Claim allowed

Orders

  • BP is entitled to recover £3,362,216.16 from Sonatrach, plus contractual interest at LIBOR+3% from November 2008.