Vitol Bahrain Ec v Nasdec General Trading LLC and Others
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Males,Mr Justice Males |
| Judgment Date | 01 November 2013 |
| Neutral Citation | [2013] EWHC 3359 (Comm) |
| Docket Number | Case No: 2012 Folio 1474 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 01 November 2013 |
[2013] EWHC 3359 (Comm)
The Honourable Mr Justice Males
Case No: 2012 Folio 1474
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr James Collins QC (instructed by Stephenson Harwood) for the Claimant
Mr Robert Thomas QC (instructed by Transport Law Ltd) for the Defendants
Approved Judgment
Hearing date: 25 th October 2013
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.
Introduction
This is an application by the claimant ("Vitol") to continue an anti-suit injunction initially granted by Cooke J on 24 May 2013 to restrain the second and third defendants (together "Fal Oil", companies incorporated respectively in Dubai and in Sharjah in the United Arab Emirates) from pursuing any application to join Vitol to proceedings commenced by Fal Oil in Fujairah in the UAE and from making any claim against Vitol in connection with the title to two cargoes of oil other than in the present action. As matters have since developed, Vitol has now been joined as a party to the proceedings in Fujairah and seeks the continuation of the injunction in a modified form requiring Fal Oil to take positive steps to extricate it from those proceedings.
The Fujairah proceedings were originally begun against a company called VTTI Fujairah Terminals Ltd. VTTI is a company which is 50% owned by the Vitol group, the other 50% being owned by MSC Berhad of Malaysia. It operates an oil storage facility in Fujairah where it leases tanks to Vitol. Vitol does not contend that Fal Oil's pursuit of the Fujairah proceedings as originally constituted was or would now be vexatious or oppressive and does not criticise the procedures of the Fujairah court. But it does contend that Fal Oil's attempt to bring it into the Fujairah proceedings is vexatious and oppressive conduct which ought to be restrained by an injunction.
The underlying dispute concerns title to two cargoes of oil which were the subject of two sale contracts between Vitol as buyer and a company called Nasdec General Trading LLC as seller. Nasdec provided warranties, expressly governed by English law, that it had good title to the oil, which was delivered to Vitol and stored in the tanks leased by Vitol from VTTI. Fal Oil, however, contends that this was oil which Nasdec (a Dubai company operated by a former Fal Oil employee) had dishonestly misappropriated from it, with the consequence that Nasdec did not itself have good title, and therefore could not pass a good title to Vitol, so that the oil remains the property of Fal Oil.
As explained below, that was not how Fal Oil's case was initially put. Nevertheless the current position is that the question whether Nasdec had a good title to the oil is central to both proceedings. Vitol brings this action in England, seeking primarily a declaration that Nasdec had a good title to the cargoes or, in the alternative, damages against Nasdec for breach of the warranties which it had given. It has obtained permission to serve the claim form on the two Fal Oil defendants, who have indicated that they propose to challenge the jurisdiction of this court but have not yet done so. In Fujairah Fal Oil has brought proceedings against VTTI (but initially, not against Vitol) in which Nasdec is also a party, seeking to establish that it has title to the oil.
Vitol was content with this position, not least as it appeared that the Fujairah proceedings were moving towards a dismissal of Fal Oil's claim. However, on 5 May 2013, almost 11 months after the commencement of the Fujairah proceedings and six months after the commencement of this action, Fal Oil sought for the first time to join Vitol as a defendant to the Fujairah proceedings. It was this that prompted Vitol's application for an anti-suit injunction.
Background
The cargoes in question were sold by Nasdec to Vitol pursuant to two sale contracts, dated 30 March and 8 May 2012, for the sale of low sulphur fuel oil DES (delivered ex ship) at VTTI. The contracts were respectively for 600,000 and 620,000 barrels of oil, with a maximum sulphur content of 0.145% by weight. Payment was to be made 15 days after commencement of discharge against presentation of documents, which included a warranty of title but did not include bills of lading. Property was to pass as the oil passed the vessel's permanent flange at the discharge port. The contracts were subject to the law and exclusive jurisdiction of the courts of Dubai, but they provided that the warranty of title to be given by Nasdec was to be governed by English law.
Warranties of title were provided by Nasdec for each cargo in the agreed form. The warranty in the case of the first cargo stated as follows:
"We refer to an outturn quantity of 600,022 US Barrels of Oil delivered to you by vessel MT AL KHALIDIA at VTTI Terminal, Fujairah and discharged during 18 April 2012.
In consideration of your payment of the full purchase price of USD 61,640,860.00 we hereby expressly warrant that we have marketable title, free and clear of any lien or encumbrance to such material, and that we have full right and authority to transfer and effect delivery of such material to you.
This warranty of title shall be governed by and construed in accordance with English law and any disputes, controversies or claims arising out of or in relation to this warranty of title shall be subject to the exclusive jurisdiction of the English courts."
The warranty in the case of the second cargo was in the same form.
The first cargo, carried on a vessel called "AL KHALIDIA", was discharged at the VTTI terminal at Fujairah between 17 and 20 April 2012. It had been loaded on board the vessel at Khorfakkan in the UAE. A bill of lading dated 16 April 2012 was issued, in the standard Tanker Bill of Lading form, which did not name the shipper but stated that the cargo was consigned to the order of Nasdec. The bill incorporated the terms of the applicable charterparty, which as it contained a London arbitration clause was governed by English law. Vitol paid for the cargo. It did not obtain an original bill of lading, which did not form part of the contractual shipping documents, but it did obtain a non-negotiable copy of the bill.
The second cargo, carried on a vessel called "SEA LION", was discharged at the VTTI terminal between 31 May and 3 June 2012. It too had been loaded at Khorfakkan. A bill of lading dated 30 May 2012 was issued in the same form as for the "AL KHALIDIA" cargo. Vitol paid for this cargo also, and again obtained a non-negotiable copy of the bill of lading.
Both the carrying vessels were owned by subsidiaries of Fal Oil. It appears that both vessels had been chartered to Sudan Petroleum Corporation, although Fal Oil contends that the fixture recaps evidencing these charterparties are not genuine. Nevertheless it is certain that the Fal Oil owned vessels did discharge the cargoes into the tanks leased by Vitol at VTTI. Fal Oil should therefore be in a position to show where the oil (which in total amounted to 175,442.156 mt with a total contract price of US $119,481,290.13) had come from.
Fal Oil first intimated a claim in relation to these cargoes in a letter to VTTI dated 11 June 2012. After referring to the cargoes, the letter continued:
"You recognise that you have confirmed safe receipt of the said cargo and have confirmed that it is in fact according to the agreed supply specifications.
You have, without any legal cause or explanation, denied Fal Oil they would of the due price of USD 119,481.13 representing the full price of the cargo noting that the transfer of the title of the cargo was subject to the full settlement of the cargo price.
Accordingly, we hereby put you on notice to, within 24 hours from receiving this letter, transfer the full cover price of USD 119,481,290.13 to our below designated bank account."
I accept the submission of Mr James Collins QC for Vitol that in this letter Fal Oil was clearly asserting a contractual claim to the price. Although it did not identify the contract pursuant to which this claim was made, it was asserting the existence of a contract or contracts of sale and claiming a right to payment thereunder.
VTTI responded on 13 June 2012, pointing out correctly that it was a terminal that stored oil, that it did not buy, sell or trade in oil products, and that it had no recorded commercial dealings with Fal Oil. It continued:
"Based on the product information contained in your letter we confirm that the terminal received approximately the volume of oil stated and this oil was stored in tanks leased to Vitol Bahrain."
Vitol's contact details were then given. The letter was also copied to Vitol, who responded on the same day explaining that it had purchased the two cargoes, had paid for them in full, and considered that it was the right and proper owner of them. Accordingly Fal Oil had been told by 13 June 2012 that it was Vitol which had purchased the cargoes, which had possession of them in the tanks leased from VTTI, and which claimed ownership of them. It might have been expected, therefore, that if Fal Oil wished to pursue the matter, it would do so with Vitol.
Instead, however, on 14 June 2012 Fal Oil Dubai applied for and obtained an attachment order over refined products stored in VTTI. The attachment was sought in support of a claim for the price of the cargoes of which Fal Oil was said to be the owner "as per" the...
To continue reading
Request your trial
-
Aon UK Ltd v Lamia Corporation Srl & Others
...save to say that I respectfully adopt the summary of their effect by Males J in Vitol Bahrain EC v Nasdec General Trading LLC [2013] EWHC 3359 (Comm) at [49] – [58]. However, I should mention the leading Court of Appeal authority on this issue of Star Reefers Pool Inc v JFC Group [2012] 1......
-
Jurisdictional Rule "x" in the Conflict of Laws: Challenges of Policy and Security in Internet Torts With Business Implications
...state of flux. Id. 40. Du Pont v. Agnew [1987] 2 Lloyd's Rep. 585, 589 (Eng.). See also Vitol Bahrain EC v. Nasdec Gen. Trading LLC [2013] EWHC (Comm) 3359 [46] (Eng.).41. The U.S. District Court for the Eastern District of Pennsylvania went as far as stating that it was irrelevant to this ......