Fal Oil Co Ltd & Anor v Petronas Trading Corporation SDN BHD

Fal Oil Co Ltd & Anor v Petronas Trading Corporation SDN BHD

Petronas failed to prove on the balance of probabilities that the cargo loaded onto the Devon at the STS point contained excess water; the evidence did not establish when or how the contamination occurred. The demurrage clause in the sale contract was construed as an independent obligation, not limited to indemnity, based on its wording and context.

Parties
Claimant/respondent (1st Appeal), Appellant (2nd Appeal): FAL Oil Co. Ltd.; Claimant/respondent (1st Appeal), Appellant (2nd Appeal): Credit Agricole Indosuez (Suisse) SA; Defendant/appellant (1st Appeal), Respondent (2nd Appeal): Petronas Trading Corporation Sdn Bhd
Jurisdiction
England and Wales
Judgment Date
07 July 2004
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal and Cross Appeal From Commercial Court
Outcome
Petronas's appeal dismissed; Fal Oil's appeal allowed on demurrage issue.
Legal Topics
Demurrage, Laytime, Sale of Goods (c&f Contracts), Burden of Proof, Liquidated Damages, Evidence (contamination of Cargo)
Commercial Law Contract Law Shipping Law Demurrage Laytime Sale of Goods (c&f Contracts) Burden of Proof Liquidated Damages +1 more

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Parties

FAL Oil Co. Ltd.

Claimant/respondent (1st Appeal), Appellant (2nd Appeal)

Credit Agricole Indosuez (Suisse) SA

Claimant/respondent (1st Appeal), Appellant (2nd Appeal)

Petronas Trading Corporation Sdn Bhd

Defendant/appellant (1st Appeal), Respondent (2nd Appeal)

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal and Cross Appeal From Commercial Court

Legal Issues

  1. 1 Whether Petronas established that the cargo loaded onto the Devon at the STS point contained more than the contractual maximum of 1% water and sediment
  2. 2 Whether the demurrage provision in the sale contract operated as an indemnity or as an independent obligation

Ratio Decidendi

Petronas failed to prove on the balance of probabilities that the cargo loaded onto the Devon at the STS point contained excess water; the evidence did not establish when or how the contamination occurred. The demurrage clause in the sale contract was construed as an independent obligation, not limited to indemnity, based on its wording and context.

Court Disposition

Petronas's appeal dismissed; Fal Oil's appeal allowed on demurrage issue.

Orders

  • First appeal dismissed.
  • Second appeal allowed.