Fal Oil Co Ltd & Anor v Petronas Trading Corporation SDN BHD [2004] EWCA Civ 822 (07 July 2004)

Fal Oil Co Ltd & Anor v Petronas Trading Corporation SDN BHD [2004] EWCA Civ 822 (07 July 2004)

Petronas failed to prove on the balance of probabilities that the cargo loaded onto the Devon at the STS point contained more than the permitted 1% water and sediment. The evidence did not establish when or how the excess water entered the cargo, and suspicion is insufficient to discharge the burden of proof. On demurrage, the sale contract provision was construed as indemnificatory, not a free-standing obligation, aligning with established authority and the contract's wording.

Citation
[2004] EWCA Civ 822
Parties
Claimant/respondent in 1st Appeal, Appellant in 2nd Appeal: FAL Oil Co. Ltd.; Claimant/respondent in 1st Appeal, Appellant in 2nd Appeal: Credit Agricole Indosuez (Suisse) SA; Defendant/appellant in 1st Appeal, Respondent in 2nd Appeal: Petronas Trading Corporation Sdn Bhd
Jurisdiction
England and Wales
Judgment Date
07 July 2004
Procedural Posture
Appeal and Cross Appeal From Commercial Court (queen's Bench Division) / Court of Appeal (civil Division) Judgment
Outcome
Appeal and cross-appeal dismissed; judgment of Morison J upheld.
Legal Topics
Sale of Goods, Demurrage, Laytime, Burden of Proof, Evidence, Charterparty, Indemnity, CIF Contracts
Commercial Law Shipping Law Contract Law Sale of Goods Demurrage Laytime Burden of Proof Evidence +3 more

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Parties

FAL Oil Co. Ltd.

Claimant/respondent in 1st Appeal, Appellant in 2nd Appeal

Credit Agricole Indosuez (Suisse) SA

Claimant/respondent in 1st Appeal, Appellant in 2nd Appeal

Petronas Trading Corporation Sdn Bhd

Defendant/appellant in 1st Appeal, Respondent in 2nd Appeal

Procedural Posture

Appeal and Cross Appeal From Commercial Court (queen's Bench Division) / Court of Appeal (civil Division) Judgment

Legal Issues

  1. 1 Whether Petronas established on the balance of probabilities that the cargo loaded onto the Devon at the STS point contained more than the permitted contractual maximum of 1% water and sediment
  2. 2 Whether the demurrage provision in the sale contract operated as a contract of indemnity or as a free-standing provision

Ratio Decidendi

Petronas failed to prove on the balance of probabilities that the cargo loaded onto the Devon at the STS point contained more than the permitted 1% water and sediment. The evidence did not establish when or how the excess water entered the cargo, and suspicion is insufficient to discharge the burden of proof. On demurrage, the sale contract provision was construed as indemnificatory, not a free-standing obligation, aligning with established authority and the contract's wording.

Court Disposition

Appeal and cross-appeal dismissed; judgment of Morison J upheld.

Orders

  • Petronas's appeal dismissed: no defence established to Fal Oil's claim for price of cargo.
  • Fal Oil's cross-appeal on demurrage dismissed: demurrage provision construed as indemnity.