Gemcorp Commodoties Trading S.A. v Zeefacto Oil & Gas Company
| Jurisdiction | England & Wales |
| Judge | Mr Justice Popplewell |
| Judgment Date | 13 July 2018 |
| Neutral Citation | [2018] EWHC 3938 (Comm) |
| Date | 13 July 2018 |
| Docket Number | Case No: CL-2018-000007 |
| Court | Queen's Bench Division (Commercial Court) |
[2018] EWHC 3938 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr Justice Popplewell
Case No: CL-2018-000007
Mr N Casey (instructed by Clyde & Co) appeared on behalf of the Claimant
Mr S Du appeared on behalf of the Defendant
APPROVED JUDGMENT
The claimant applies for summary judgment under CPR part 24. The claimant was called Kingbird Commodities S.A. at the time when the events in dispute took place. It has since changed its name to Gemcorp Commodities Trading S.A.. An application for permission to amend to change the name of the claimant is not resisted, and I grant permission accordingly.
The factual background is this. Following meetings in London in early 2016, the parties entered into two sale contracts, whereby the claimant agreed to sell and the defendant agreed to buy two cargoes, in each case, of 20,000 metric tonnes of diesel fuel oil, plus or minus 10 per cent in claimant's option, with delivery to take place to DAP offshore Lome by a ship-to-ship transfer during March and April 2016. The first contract was entered into on 7 March 2016 (“the March Contract”), and the second was entered into on 8 April 2016 (“the April Contract”).
Under the March Contract, the cargo was delivered and was ultimately paid for by the defendant, albeit late. The claim with which I am concerned is for the balance of the purchase price under the April Contract. The contract terms provided at clause 5 for the price to be calculated by a formula by reference to prices publicised in Platts European Marketscan, plus a premium, each of which would be denominated in US dollars. Clause 7 is headed “PAYMENTS” and provides as follows:
“Payment shall be made free of buyer's bank charges without discount, deduction, set-off or counterclaim in United States Dollars by telegraphic transfer of immediately available funds… not later than 90 calendar days from the “daughter” vessel bill of lading date at offshore Lome …”
Clause 11 was a governing law and jurisdiction clause which provided for English law and exclusive jurisdiction of the High Court in London. Clause 14 was a force majeure clause and provided in relevant part:
“Neither seller nor buyer shall be liable in damages or otherwise for any failure or delay in performance of any obligation hereunder, other than the obligation to make payment where such failure or delay is caused by force majeure, being any event, recurrence or circumstance reasonably beyond the control of the respective parties, including without prejudice to the generality of the foregoing. The clause enumerated a number of specific causes, one of which was, “restrictions imposed by any governmental authority.”
The cargo under the April Contract was delivered by the claimant to the defendant onto three daughter vessels on 24 April 2016. It is common ground that the price calculated in accordance with clause 5 was US$9,598,032.61 and the price fell due for payment, 90 days thereafter on 22 July 2016. It was not paid when due. There were during 2017 seven separate part payments on dates between 28 March and 23 October 2017 in the total sum of US$1,149,597.99. That leaves an unpaid balance of the purchase price which is claimed in these proceedings of US$8,448,434.62. In addition, interest is claimed in accordance with clause 7 which provided for interest on late payment at five per cent over one-month Libor on US deposits.
Following the last of those payments, the claimant's solicitors sent a letter before action on 23 November 2017. The defendant responded by letter of 5 December 2017. The letter was on the defendant's letterhead and was signed by a Mr Andrew Quist. He described himself as in-house counsel for and on behalf of the defendants. I have been told by Mr Du, who has appeared on behalf of the defendants, that he is a Ghanaian lawyer. In that response, the defendants appear to accept that there is an outstanding liability to make the contract payment: the heading describes the subject matter as “outstanding contract payment”; the substantive response draws attention to an alleged duty on the part of the claimant to mitigate its loss, thereby impliedly accepting that there would otherwise be a liability for the claimed amount. The gist of the letter was to seek further documentation.
The claimant considered that the documents requested were irrelevant to the substantive claim and said so in response. On 4 January 2018, these proceedings were commenced by the issue of a claim form to which particulars of claim were attached, and they were served on the defendant on 6 February 2018 together with the response back. The deadline for filing an Acknowledgment of Service was 28 February of 2018. No Acknowledgment of Service was filed on that date.
On 18 April 2018, the claimant's solicitors, Clyde & Co, were sent a photograph of an Acknowledgment of Service dated 10 March 2018. That photographed Acknowledgment of Service was unsigned, but the box for recording the details of the signatory read, “In-house counsel, for and on behalf of defendant company,” a Nigerian registered entity. No such Acknowledgment of Service had, so far as the evidence shows, been signed and no Acknowledgment of Service was lodged or filed in the Commercial Court.
There was also attached to the email from Mr Quist, sent to Clyde & Co on 18 April, a document headed Defence and Counterclaim. That document appeared to be signed by Mr Quist, describing himself as duly authorised, for and on behalf of the defendants, and had attached to it a Statement of Truth which said, “I believe that the facts stated in this Defence and Counterclaim are true. I am duly authorised by the defendant to sign the statement on its behalf.” There was no indication in that document of the source of any information or belief, so far as Mr Quist is concerned. The document was not lodged or filed with the Commercial Court as a statement of case.
The procedural position, therefore, is that there has been no Acknowledgment of Service and the so-called Defence and Counterclaim is not a statement of case in the proceedings, although it is relied on for its evidential weight in the current application. The claimant would be entitled to enter judgment in default of Acknowledgment of Service. However, no doubt with an eye to enforcement, it does not seek to enter judgment on that basis but seeks permission to apply for summary judgment on the merits. That permission is not opposed and I have granted it.
The principles which apply to summary judgment applications are not substantially in issue. Under CPR part 24.2, the court may give summary judgment on a claim if it considers that the defendant has no real prospect of succeeding in its defence of the claim and there is no other compelling reason why the case should be disposed of at trial. In this context, a real prospect of success means a prospect which is more than fanciful or merely arguable. In order to be better than merely arguable, it must be a defence which carries some degree of conviction.
The defendant has put forward two arguments in resisting the application for summary judgment. The first is that the contract was frustrated. What is said is that after the delivery of the cargo by the claimant, it was then on-sold by the defendant in Nigeria at prices in Naira which reflected the prevailing exchange rate of US$1 to 197.5 Naira and that the defendant arranged affairs with its buyers, such that they would prepay and enable the defendant to have sufficient cash in Naira to meet the 90-day payment deadline. The case is that the defendant then applied to the Central Bank of Nigeria to exchange its Naira for dollars but that on or around 15 June 2016, and before such exchange could take place, the Central Bank of Nigeria announced that it would abandon the previous position under which the currency was paid at a particular rate against the US dollar. The effect of that decision was a devaluation of the Naira within a matter of days from $1 to 197.5 Naira, to a figure which was as low as $1 to 285 Naira. It said that that resulted in a shortage of Naira held by the defendant which in turn resulted in protracted and continuing delay in completing payment. The defendant's case is that nothing could have been done, in practical terms, to protect itself...
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Bedford Investments Ltd v Mr Nicholas James Sellman
...dispute arising between the parties (see Popplewell J as he then was in Gencorp Commodities Trading SA v Zeefacto Oil and Gas Co [2018] EWHC 3938 (Comm)); b) In order for such clauses to be effective, they need to be capable of enforcement by way of application for summary judgment (see Mi......