Standard Chartered Bank v Ceylon Petroleum Corporation

Standard Chartered Bank v Ceylon Petroleum Corporation

CPC had capacity to enter into the derivative contracts T8 and T9 because they were incidental and conducive to its statutory objects as a commercial oil importer and trader, regardless of whether they were hedging or speculative transactions.

Parties
Claimant/respondent: Standard Chartered Bank; Defendant/appellant: Ceylon Petroleum Corporation
Jurisdiction
England and Wales
Judgment Date
27 July 2012
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Corporate Capacity, Derivative Contracts, Statutory Interpretation, Hedging Vs Speculation
Commercial Law Corporate Law Corporate Capacity Derivative Contracts Statutory Interpretation Hedging Vs Speculation

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Parties

Standard Chartered Bank

Claimant/respondent

Ceylon Petroleum Corporation

Defendant/appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether CPC had capacity to enter into derivative contracts T8 and T9 under its establishing statute
  2. 2 Whether the contracts were hedging or speculation and if that affects CPC's capacity

Ratio Decidendi

CPC had capacity to enter into the derivative contracts T8 and T9 because they were incidental and conducive to its statutory objects as a commercial oil importer and trader, regardless of whether they were hedging or speculative transactions.

Court Disposition

Appeal dismissed

Orders

  • The contracts T8 and T9 are binding on CPC.
  • Judgment for Standard Chartered Bank for US$166,476,281.