ERG Raffinerie Mediterranee SPA v Chevron USA Inc (t/a Chevron Texaco Global Trading) [2007] EWCA Civ 494 (22 May 2007)

ERG Raffinerie Mediterranee SPA v Chevron USA Inc (t/a Chevron Texaco Global Trading) [2007] EWCA Civ 494 (22 May 2007)

Where an FOB contract includes a laycan provision allowing the vessel to present at any time up to the end of the delivery period, the obligation to load within laytime is not a condition of the contract. The buyer is not entitled to terminate for failure to load by the end of the delivery period; the remedy for delay is demurrage, not termination, unless a frustrating time has elapsed.

Citation
[2007] EWCA Civ 494
Parties
Claimant/respondent (seller): ERG Raffinerie Mediterranee Spa; Defendant/appellant (buyer): Chevron USA Inc (trading as Chevron Texaco Global Trading)
Jurisdiction
England and Wales
Judgment Date
22 May 2007
Procedural Posture
Civil Appeal (commercial Contract) / Appeal From High Court (commercial Court) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
FOB Contracts, Laycan Provisions, Repudiatory Breach, Demurrage, Conditions and Warranties in Contracts
Commercial Law Contract Law Shipping Law FOB Contracts Laycan Provisions Repudiatory Breach Demurrage Conditions and Warranties in Contracts

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Parties

ERG Raffinerie Mediterranee Spa

Claimant/respondent (seller)

Chevron USA Inc (trading as Chevron Texaco Global Trading)

Defendant/appellant (buyer)

Procedural Posture

Civil Appeal (commercial Contract) / Appeal From High Court (commercial Court) to Court of Appeal

Legal Issues

  1. 1 Whether time of delivery in an FOB contract with a laycan provision is a condition of the contract entitling the buyer to terminate for late delivery
  2. 2 Whether the buyer was entitled to terminate the contract for failure to load within the delivery period

Ratio Decidendi

Where an FOB contract includes a laycan provision allowing the vessel to present at any time up to the end of the delivery period, the obligation to load within laytime is not a condition of the contract. The buyer is not entitled to terminate for failure to load by the end of the delivery period; the remedy for delay is demurrage, not termination, unless a frustrating time has elapsed.

Court Disposition

Appeal dismissed

Orders

  • Judgment for the sellers (ERG Raffinerie Mediterranee Spa)
  • Buyers (Chevron USA Inc) limited to demurrage as per contract; no right to terminate for late loading within laytime