Sahara Energy Resource Ltd v Société Nationale de Raffinage SA (Sonara)
| Court | Queen's Bench Division (Commercial Court) |
| Judge | Mrs Justice Cockerill |
| Neutral Citation | [2024] EWHC 3163 (Comm) |
| Date | 09 November 2024 |
| Year | 2024 |
| Counsel | Timothy Young Kc,Stephen Du,Joseph Rich,Riaz Hussain Kc |
Neutral Citation Number: [2024] EWHC 3163 (Comm)
Case No: CL-2021-000232
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
KING’S BENCH DIVISION
COMMERCIAL COURT
Rolls Building
Fetter Lane
London
EC4A 1NL
Before:
MRS JUSTICE COCKERILL DBE
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Between:
SAHARA ENERGY RESOURCE LTD
Claimant
- and -
SOCIÉTÉ NATIONALE DE RAFFINAGE S.A. (SONARA)
Defendant
- and -
SAHARA ENERGY RESOURCE DMCC
Additional Party
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- - - - - - - - - - - - - - - - - - - - -
Timothy Young KC, Stephen Du and Joseph Rich (instructed by Reed Smith LLP) for the
Claimant
Riaz Hussain KC (instructed by Squire Patton Boggs (UK) LLP) for Defendant
Hearing dates: 2,3,7,8,14 October 2024
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APPROVED JUDGMENT
This judgment was handed down remotely and in private by the judge and circulated to
the parties’ representatives by email. The date and time for hand-down is deemed to be
Monday 9 December 2024 at 09:30am.
High Court Approved Judgment Sahara v Sonara
Mrs Justice Cockerill:
INTRODUCTION
Sahara’s claim and the issues in the case
1. The central claims made by Sahara against Sonara are simple. They are for breach of (i)
a contract dated 14 January 2013 (“the 2013 Contract”) for the purchase of crude oil,
(ii) various further crude oil contracts concluded in 2014, 2015 and 2016. This
apparently simple case has however given rise to a raft of legal and factual issues.
2. The first complication is that the claims are not pursued simply, or even primarily, as
claims for breach of those contracts. They are ultimately substantially based on a “Joint
Report” dated 5 September 2019 following a “reconciliation meeting” between the
parties. This Joint Report is said by Sahara to encapsulate an agreement settling
disputes as to the various elements of the claims.
3. The second complication is that the claims have layers. Sahara originally claimed both
principal sums and interest (including both contractual interest and what is referred to
as Incremental Interest) as well as default changes and foreign exchange differential in
relation to four cargoes. What remains in issue now are only the elements other than
principal and contractual interest (which have been paid). There are three disputed
heads of claim:
i) Incremental Interest: i.e. the difference between the contractual interest rate and
the rate from time to time payable to Sahara’s Banks where cargoes were
financed by loans;
ii) Excess Interest and Penal Charges i.e. charges raised by the Banks for failure to
make prompt payment under letters of credit, where the relevant cargoes were
financed by letters of credit;
iii) FX losses arising from cargoes charged in Euros, which equate to the difference
between the figure produced by a conversion to Euros at invoice date and the
ultimate payment date (the Euro having fallen against the US dollar in the
relevant period).
4. The reason why all these different elements arise is this: Sonara did not pay for one
cargo until 2016, and the other three outstanding cargoes until 2019. Therefore, whilst
Sonara was contractually obliged to pay for the cargoes in under 4 months, it in fact
paid for them only after 5-6 years. Sahara’s claims are therefore ones which they make
to make themselves good for this extremely long delay – in essence Sahara says that
because of the delay its own banks hit it with raised and ultimately penal interest
charges and it lost money on the $/€ conversion.
5. The fact of the delay is not in issue. Nor, really, is the contention that Sahara has
suffered many of the losses it claims to have done – though the exact amount of proved
quantum is in issue. What is the main issue is whether these losses are recoverable
under the terms of the contracts or the Joint Report and whether it is now too late for
Sahara to claim them.
Page 3
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1 cases
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Sahara Energy Resource Ltd v Société Nationale De Raffinage S.A. (Sonara)
...case settled ahead of the hearing there. The view of Professor Edwin Peel writing in the LQR (“The Scope of a demurrage Clause” LQR[2024] EWHC 3163 (Comm) Mrs Justice Cockerill DBE Case No: CL-2021-000232 IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES KING'S ......
