BP Oil International Ltd v Target Shipping Ltd

BP Oil International Ltd v Target Shipping Ltd

The charterparty did not specify a rate for transatlantic overage freight; therefore, BP was liable to pay a reasonable sum for overage freight, not the full amount invoiced and paid. BP's payment of the excess was made under a mistake of law, and they are entitled to recover the overpayment. The parties' exchanges did not amount to a binding variation, estoppel, or rectification. SAC6 did not entitle BP to load at Marmara in the circumstances, and BP did not effectively invoke it.

Parties
Claimant: BP Oil International Limited; Defendant: Target Shipping Limited
Jurisdiction
England and Wales
Judgment Date
14 June 2012
Procedural Posture
Commercial Contract Dispute (charterparty) / High Court Judgment After Trial
Outcome
BP entitled to recover any overpayment of overage freight; inquiry ordered as to reasonable amount of overage freight due
Legal Topics
Charterparty Interpretation, Overage Freight, Mistake of Payment, Rectification, Estoppel, Broker Authority
Commercial Law Shipping Law Contract Law Charterparty Interpretation Overage Freight Mistake of Payment Rectification Estoppel +1 more

Case Brief

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Parties

BP Oil International Limited

Claimant

Target Shipping Limited

Defendant

Procedural Posture

Commercial Contract Dispute (charterparty) / High Court Judgment After Trial

Legal Issues

  1. 1 Whether BP was liable for overage freight under the charterparty and at what rate
  2. 2 Whether BP was entitled to recover overpaid freight as money paid by mistake
  3. 3 Whether the parties' exchanges or conduct gave rise to a binding variation, estoppel, or rectification

Ratio Decidendi

The charterparty did not specify a rate for transatlantic overage freight; therefore, BP was liable to pay a reasonable sum for overage freight, not the full amount invoiced and paid. BP's payment of the excess was made under a mistake of law, and they are entitled to recover the overpayment. The parties' exchanges did not amount to a binding variation, estoppel, or rectification. SAC6 did not entitle BP to load at Marmara in the circumstances, and BP did not effectively invoke it.

Court Disposition

BP entitled to recover any overpayment of overage freight; inquiry ordered as to reasonable amount of overage freight due

Orders

  • Inquiry as to the proper amount (if any) BP should recover for overpaid overage freight
  • Submissions invited on commission issue and terms of order