BP OIL INTERNATIONAL LIMITED v GLENCORE ENERGY UK LIMITED

BP OIL INTERNATIONAL LIMITED v GLENCORE ENERGY UK LIMITED

The contract was formed on 2 April 2019 on the terms of the Recap and GT&Cs, not on Glencore's additional terms. Glencore breached the quality clause by delivering oil contaminated with organic chlorides, which was not of usual quality. The appropriate measure of damages is the difference in value between sound and...

Source-derived case information.

Parties
Claimant: BP Oil International Limited; Defendant: Glencore Energy UK Limited
Jurisdiction
England and Wales
Judgment Date
09 March 2022
Procedural Posture
Commercial Contractual Claim / Final Judgment After Trial
Outcome
Judgment for the claimant (BPOI) against the defendant (Glencore) for breach of contract and damages.
Legal Topics
Breach of Contract, Damages, Quality of Goods, Mitigation of Loss, Battle of Forms, Measure of Damages, Sub Sale Relevance, Exclusion of Consequential Loss
Contract Law Sale of Goods Breach of Contract Damages Quality of Goods Mitigation of Loss Battle of Forms Measure of Damages +2 more

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Summary, issues, holding and outcome

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Parties

BP Oil International Limited

Claimant

Glencore Energy UK Limited

Defendant

Procedural Posture

Commercial Contractual Claim / Final Judgment After Trial

Legal Issues

  1. 1 What were the binding terms of the sale contract between BPOI and Glencore?
  2. 2 Was there a breach of the contractual quality clause and/or section 59.1.1 of the GT&Cs?
  3. 3 What is the appropriate measure of damages for the contaminated cargo?

Ratio Decidendi

The contract was formed on 2 April 2019 on the terms of the Recap and GT&Cs, not on Glencore's additional terms. Glencore breached the quality clause by delivering oil contaminated with organic chlorides, which was not of usual quality. The appropriate measure of damages is the difference in value between sound and contaminated oil, assessed by reference to the actual sale to BPOESA at Dated Brent minus $8/bbl. The sub-sale to BPESE is not relevant to the measure of damages. BPOI is also entitled to recover storage, transportation, demurrage, and cargo volume losses as direct consequences of the breach.

Court Disposition

Judgment for the claimant (BPOI) against the defendant (Glencore) for breach of contract and damages.

Orders

  • Glencore to pay BPOI US$5,960,095 for diminution in value of the cargo.
  • Glencore to pay BPOI US$3,682,713 for storage and transportation costs.