Choil Trading SA v Sahara Energy Resources Ltd

Choil Trading SA v Sahara Energy Resources Ltd

The contract required naphtha of normal PHRC quality; the supplied cargo was grossly contaminated with MTBE, which is not a normal by-product and is not tolerated above 50 ppm. Sahara was in breach of the implied condition that the cargo would comply with its description and be of satisfactory quality. Damages are assessed as the difference between the value of sound and contaminated cargo, including reasonable mitigation costs and demurrage, less sums due to Sahara.

Parties
Claimant: Choil Trading SA; Defendant: Sahara Energy Resources Ltd
Jurisdiction
England and Wales
Judgment Date
26 February 2010
Procedural Posture
Commercial Contract Dispute / Final Judgment
Outcome
Judgment for the claimant (Choil Trading SA)
Legal Topics
Sale of Goods, Damages, Quality of Goods, Demurrage, Mitigation of Loss, FOB Contracts
Commercial Law Contract Law International Trade Sale of Goods Damages Quality of Goods Demurrage Mitigation of Loss +1 more

Case Brief

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Parties

Choil Trading SA

Claimant

Sahara Energy Resources Ltd

Defendant

Procedural Posture

Commercial Contract Dispute / Final Judgment

Legal Issues

  1. 1 What were the contractual terms as to quality of the naphtha?
  2. 2 Was Sahara in breach of contract by supplying naphtha contaminated with MTBE?
  3. 3 What is the proper measure of damages for breach of warranty of quality?

Ratio Decidendi

The contract required naphtha of normal PHRC quality; the supplied cargo was grossly contaminated with MTBE, which is not a normal by-product and is not tolerated above 50 ppm. Sahara was in breach of the implied condition that the cargo would comply with its description and be of satisfactory quality. Damages are assessed as the difference between the value of sound and contaminated cargo, including reasonable mitigation costs and demurrage, less sums due to Sahara.

Court Disposition

Judgment for the claimant (Choil Trading SA)

Orders

  • Sahara to pay Choil $389,880.03 as the balance due after set-off of claims and counterclaims.