Statoil ASA v Louis Dreyfus Energy Services L P

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeTHE HONOURABLE MR JUSTICE AIKENS,Mr Justice Aikens
Judgment Date29 Sep 2008
Neutral Citation[2008] EWHC 2257 (Comm)
Docket NumberCase No: 20071115

[2008] EWHC 2257 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Honourable Mr Justice Aikens

Case No: 20071115

Between :
Statoil A.s.a
Claimant
and
Louis Dreyfus Energy Services L.p
Defendant

Ms Philippa Hopkins (instructed by Ince & Co, Solicitors, London) for the Claimant

Mr Michael Holmes(instructed by ReedSmith, Solicitors, London) for the Defendant

Hearing dates: 23 rd and 24 th September 2008

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HONOURABLE MR JUSTICE AIKENS Mr Justice Aikens

Mr Justice Aikens

The Claim

1

The claimant (“Statoil”), a Norwegian company trading in oil and gas, claims the sum of US$435,833.12 from the defendant, (“LD”), which is a United States company within the very well known Louis Dreyfus group of companies that trades in a large range of commodities. Statoil says that this sum is the balance of demurrage due to it under the terms of a contract for the sale of a cargo of so-called liquid propane gas (“LPG”), made in August/September 2006 between Statoil as sellers and LD as buyers (“the contract”).

2

There was a short trial which lasted 1 1/2 days on Tuesday and Wednesday, 23 and 24 September 2008. It was most efficiently conducted by Miss Hopkins, for Statoil, and Mr Holmes for LD.

3

I heard evidence from 4 witnesses. Statoil called, first, Mr Nils Breivik, an LPG trader employed by Statoil, who negotiated the terms of the contract in August and September 2006. Secondly, Statoil called Mr Ole Rostrup, who was the senior demurrage analyst of Statoil in the period November 2006 to April 2007. He was involved in calculating Statoil's claim for demurrage against LD under the contract and the discussions which took place with his opposite number at LD, Mr Ray Hodge, in that period.

4

LD called, first, Mr Patrick Gorgue, its LPG trader who negotiated the contract with Mr Breivik, through the medium of Mr Steffen Andersen, a broker with Lorentzen & Stemoco (“L&S”), who broked both the LPG contract and also the charterparty for the carrying vessel. LD also called Mr Ray Hodge, the manager of LD's vessels logistics department, who negotiated the demurrage issues with Mr Rostrup in the period November 2006 to April 2007.

5

The evidence of Mr Breivik and Mr Gorgue turned out to be of only peripheral importance to one of the four issues in the case and did not involve the other issues at all. Both were as helpful as they could be in the circumstances. Mr Rostrup and Mr Hodge's evidence was central to two of the issues in the case. I will have to make some findings on their evidence in the course of this judgment.

6

The dispute between the parties concerns four issues, which I can summarise briefly now, in the hope that this will be helpful as I go through the facts. The first issue is: what were the terms of the contract for the sale of the LPG? In particular, did the contract contain a term that demurrage claims had to be submitted by the sellers to the buyers within 90 days of the completion of discharge of the vessel and, further, that any claim made after that time bar would not be valid? LD says that it did; Statoil says that it did not.

7

The second issue concerns an agreement made between Mr Rostrup and Mr Hodge as to the amount of demurrage due from LD to Statoil. That agreement was made on about 26 January 2007, for a demurrage sum of US$103,527.84. For reasons which will become apparent in a moment, I will call this the “first settlement agreement”– without pre-judging the issues. It is accepted by LD that Mr Rostrup of Statoil had made an error in calculating this sum, because he had thought that the vessel had completed discharging on 13 October 2006, when in fact she had not completed discharging until 24 October 2006. The correct calculation for demurrage (which is agreed) would have been, in fact, some US$ 539,360.96. Mr Hodge accepted, in cross examination, that he realised that Mr Rostrup had made this mistake and he decided to keep quiet about it. The second issue, therefore, is whether the first settlement agreement is not binding on Statoil, either because it was void for unilateral mistake, or it is voidable (in equity) for unilateral mistake and Statoil have avoided it.

8

The third issue arises out of a telephone conversation that Mr Rostrup and Mr Hodge had on 19 March 2007. Mr Rostrup's evidence was that in the course of that conversation Mr Hodge agreed, on behalf of LD, to a second settlement agreement in relation to demurrage. Mr Rostrup says that Mr Hodge agreed to pay demurrage in the sum of US$ 539,360.96, less the sum already paid. Mr Hodge denies that he agreed to this on the telephone.

9

The fourth issue arises if there was a demurrage time bar provision in the contract, the first settlement agreement is not binding on Statoil and the second settlement agreement was not, in fact, made. In those circumstances, the question is: can Statoil now advance its demurrage claim in the full sum (which is agreed as a figure) of US$ 539,360.96.

An outline of the facts

10

On 28 July 2006, Statoil, as Charterers, concluded a charterparty for the LPG carrier “Harriette N” (“the vessel”) with BW Gas, Oslo as agents for her owners. The charter was for one voyage from Norway to several possible ranges of discharge ports, to be nominated in due course. These ranges included the West Coast Mexico range. The cargo was to be 32,000 tons of LPG (5% more or less in owners' option). The charter provided for demurrage to be paid at the rate of US32,000 per day pro rata. The laycan range was 9 – 11 August 2006.

11

The negotiations for the contract between Statoil and LD were conducted through the medium of Mr Andersen, the broker at L&S. The two traders at Statoil and LD respectively did not email one another directly, nor did they talk to one another on the telephone. All material communications were made by each trader emailing Mr Andersen, who passed the information on to the other side. There was one relevant telephone call between Mr Breivik and Mr Andersen, which I will refer to below.

12

At 1822 hrs (European time) on 2 August 2006, Mr Andersen of L&S sent an email to Mr Gorgue giving him a “firm indication” (ie. an offer) from Statoil for the sale of 32,000 tons of LPG (plus or minus 5% at seller's option) on terms cif Topolobampo, which is a port on the West coast of Mexico. The terms offered included laytime of 30 days (Sundays and holidays included) and a demurrage rate of $40,000 a day or pro rata. That last proposal would mean, of course, that if the laytime were exceeded for the loading and discharging of the cargo, then the buyers would be liable to pay demurrage to the sellers at the agreed rate. The object of such a provision in a cif contract is to ensure that the first seller in a chain of such contracts, who will frequently be the charterer of the vessel, will be able to cover its liability to the shipowner for any demurrage incurred under the charterparty for the vessel.

13

The firm offer also included terms as to the price of the LPG and the delivery date. LD was asked to give a prompt reply.

14

At 1849 that day Mr Andersen sent an email to Mr Breivik at Statoil, forwarding LD's firm counter indication, subject to reconfirmation. The only difference at this stage was in the price. That was followed by another firm indication from Statoil, relayed by Mr Andersen to LD on 3 August at 0907 hours. Again, at this stage, the bargaining concerned the price.

15

Then at 1646 on 3 August, Mr Gorgue sent an email to L&S, the brokers, with a counter from LD, setting out full terms of a proposed contract. Under the heading “Demurrage” was the following:

“As per Charter Party

ANY DEMURRAGE CLAIM SHALL BE SUBMITTED BY SELLER WITHIN 90 DAYS AFTER COMPLETION OF DISCHARGE. ANY CLAIM MADE AFTER THIS TIME BAR SHALL NOT BE VALID. BUYER AND SELLER SHALL AGREE TO THE DEMURRAGE AMOUNT BY 90 DAYS FROM BUYER'S RECEIPT OF SELLER'S CLAIM. THEREAFTER, IF ANY DISPUTE OUTSTANDING, BUYER SHALL PAY ALL UNDISPUTED AMOUNTS PROMPTLY.

16

Towards the end of the email it states that the Shell International Trading and Shipping Company Ltd General Terms and conditions of sale for Petroleum products and feedstocks will govern the transaction, except as specifically set out above and where not in conflict with specific terms agreed.

17

At the end of the terms the email stated, “Sellers contract administration will issue a full sales contract upon fixing”. In other words, if the contract was agreed, it would be Statoil's contract administration department that would be responsible for finalising and issuing the full contract terms. It is usual in this trade for the seller's contract department to produce the agreed contract wording in full.

18

At 1733 hours on 3 August, L&S sent to Mr Gorgue at LD an email which started: “thanks your counter to which Statoil accept/except:”. The email then set out a number of terms, which were under the same headings that Mr Gorgue had used in his previous email. Not all the headings were set out but only those where Statoil wished to make some counter offer to the terms proposed by LD.

19

Under the heading “Demurrage:” were the letters and numbers “USD 40,000 PDPR”. There was no reference to the remainder of the wording that had been under the heading “Demurrage” in the email sent by Mr Gorgue.

20

At the end of the email it stated that the Statoil General Terms and Conditions were to apply.

21

At 1752 hours on 3 August, Mr Gorgue emailed Mr Andersen of L&S in the following terms: “we can accept/except” and then a number of issues are dealt with. These do not include anything on...

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