INEOS Manufacturing Scotland Ltd. v Grangemouth Chp Ltd & Anor [2011] EWHC 163 (Comm) (11 February 2011)

INEOS Manufacturing Scotland Ltd. v Grangemouth Chp Ltd & Anor [2011] EWHC 163 (Comm) (11 February 2011)

EU emissions allowances issued under the Regulations do not fall within the definition of 'CO2 Emissions Credits' in the ESA; they are not credits but permits/allowances, and the commercial context and contractual balance indicate the parties did not intend clause 3.4 to encompass such allowances. Fortum O&M, not GCHPL, was the operator of the CHP Plant and the legitimate holder of the GGE Permit; allowances did not accrue to GCHPL. No breach or implied obligation arose.

Citation
[2011] EWHC 163 (Comm)
Parties
Claimant: INEOS Manufacturing Scotland Limited; First Defendant: Grangemouth CHP Limited; Second Defendant: Fortum O&M (UK) Limited
Jurisdiction
England and Wales
Judgment Date
11 February 2011
Procedural Posture
Commercial Court Claim / Judgment After Trial
Outcome
Claim dismissed
Legal Topics
Interpretation of Contractual Terms, Emissions Trading, Allocation of Carbon Allowances, Obligations Under Supply Agreements
Contract Law Commercial Law Environmental Law Interpretation of Contractual Terms Emissions Trading Allocation of Carbon Allowances Obligations Under Supply Agreements

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 16 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

INEOS Manufacturing Scotland Limited

Claimant

Grangemouth CHP Limited

First Defendant

Fortum O&M (UK) Limited

Second Defendant

Procedural Posture

Commercial Court Claim / Judgment After Trial

Legal Issues

  1. 1 Whether EU emissions allowances fall within the contractual definition of 'CO2 Emissions Credits' under the Electricity Supply Agreement
  2. 2 Whether such allowances 'accrued' to Grangemouth CHP Limited
  3. 3 Whether Grangemouth CHP Limited was obliged to ensure IMSL obtained the benefit of allowances

Ratio Decidendi

EU emissions allowances issued under the Regulations do not fall within the definition of 'CO2 Emissions Credits' in the ESA; they are not credits but permits/allowances, and the commercial context and contractual balance indicate the parties did not intend clause 3.4 to encompass such allowances. Fortum O&M, not GCHPL, was the operator of the CHP Plant and the legitimate holder of the GGE Permit; allowances did not accrue to GCHPL. No breach or implied obligation arose.

Court Disposition

Claim dismissed