PST Energy 7 Shipping LLC Product Shipping & Trading S.A. v O.W. Bunker Malta Ltd & Ors [2015] EWCA Civ 1058 (22 October 2015)

PST Energy 7 Shipping LLC Product Shipping & Trading S.A. v O.W. Bunker Malta Ltd & Ors [2015] EWCA Civ 1058 (22 October 2015)

The contract was not a contract for the sale of goods within the meaning of the Sale of Goods Act 1979 because the parties contemplated that the bunkers would be consumed before property could pass; the essential bargain was delivery and immediate right to use, not transfer of title. Failure to transfer title did not relieve the owners from the obligation to pay for the bunkers.

Citation
[2015] EWCA Civ 1058
Parties
Claimant/appellant: PST Energy 7 Shipping LLC; Claimant/appellant: Product Shipping & Trading S.A.; Defendant/respondent: O.W. Bunker Malta Ltd; Defendant/respondent: ING Bank N.V.
Jurisdiction
England and Wales
Judgment Date
22 October 2015
Procedural Posture
Appeal From Arbitration Award (commercial Court, Queen's Bench Division) / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Sale of Goods, Retention of Title, Bunker Supply Contracts, Implied Terms, Passing of Property, Obligation to Pay, Interpretation of Commercial Contracts
Commercial Law Contract Law Maritime Law Sale of Goods Retention of Title Bunker Supply Contracts Implied Terms Passing of Property +2 more

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Parties

PST Energy 7 Shipping LLC

Claimant/appellant

Product Shipping & Trading S.A.

Claimant/appellant

O.W. Bunker Malta Ltd

Defendant/respondent

ING Bank N.V.

Defendant/respondent

Procedural Posture

Appeal From Arbitration Award (commercial Court, Queen's Bench Division) / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the contract for supply of bunkers was a contract for the sale of goods under the Sale of Goods Act 1979
  2. 2 Whether failure to transfer title in the bunkers relieved the owners from the obligation to pay
  3. 3 Whether an implied term required OWBM to pass title or ensure a licence to consume the bunkers

Ratio Decidendi

The contract was not a contract for the sale of goods within the meaning of the Sale of Goods Act 1979 because the parties contemplated that the bunkers would be consumed before property could pass; the essential bargain was delivery and immediate right to use, not transfer of title. Failure to transfer title did not relieve the owners from the obligation to pay for the bunkers.

Court Disposition

Appeal dismissed

Orders

  • Failure to transfer title in the bunkers does not release the owners from their obligation to pay for them.
  • Parties invited to make submissions on the appropriate form of order.