|[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]|
England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> PST Energy 7 Shipping LLC Product Shipping & Trading S.A. v O.W. Bunker Malta Ltd & Ors  EWCA Civ 1058 (22 October 2015)
Cite as:  EWCA Civ 1058,  1 Lloyd's Rep 228,  2 WLR 1072,  1 All ER (Comm) 503,  WLR(D) 426
[New search] [View without highlighting] [Printable RTF version] [Buy ICLR report:  2 WLR 1072] [View ICLR summary:  WLR(D) 426] [Help]
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr. Justice Males
Strand, London, WC2A 2LL
B e f o r e :
Vice-President of the Court of Appeal, Civil Division
LORD JUSTICE LONGMORE
LORD JUSTICE McCOMBE
| PST ENERGY 7 SHIPPING LLC
PRODUCT SHIPPING & TRADING S.A.
|- and -
|(1) O.W. BUNKER MALTA LTD
(2) ING BANK N.V.
Mr. Robert Bright Q.C., Mr. Marcus Mander and Miss Clara Benn (instructed by Allen & Overy LLP) for the respondents
Hearing date: 17th September 2015
Crown Copyright ©
Lord Justice Moore-Bick :
(i) whether OWBM had property in the bunkers at any material time (Issue 1);
(ii) whether the retention of title clause in OWBM's terms prevented property in the bunkers from passing to the owners (Issue 3);
(iii) whether OWBM could recover the price of the bunkers under section 49(1) of the Sale of Goods Act 1979 (Issue 4);
(iv) whether OWBM had any other claim under the contract (Issue 6(a));
(v) whether the Sale of Goods Act 1979 applied to the contract between OWBM and the owners (Issue 9).
"46. In these circumstances the question arises, as already mentioned, what was the consideration for the money payment which the Owners agreed to make if it was not the transfer of title? In my judgment the true nature of the parties' bargain was that OWBM would deliver or arrange for delivery of the bunkers, which the Owners would be immediately entitled to use for the propulsion of the vessel."
"51. Stripped of all unnecessary detail, the deal between the parties was that OWBM would ensure delivery of the bunkers, the use of which would be immediately available to the Owners, who would pay for them according to OWBM's invoice.
Such an agreement does quite obviously resemble in some respects a contract of sale, but its terms and their performance do not to any extent rely on property or title or their transfer."
"6. It is well-known in the industry . . . that many bunker suppliers sell on terms including retention of title clauses along the supply chain . . .
7. It is well known by shipowners and charterers that suppliers of bunkers are frequently sub-sellers, and that the terms on which bunkers are sold frequently include retention of title clauses.
. . .
18. RMUK was aware that the OWB T&Cs would include or were likely to include both a retention of title clause and an express provision that, prior to payment, Owners would be in possession of the Bunkers as bailee[s] and would not be entitled to consume them other than for the propulsion of the Vessel.
19. RMUK was aware that OWB Malta was supplying the Bunkers to the Vessel for consumption.
20. RMUK was aware that the Bunkers might be being purchased for immediate use and might accordingly be wholly or partly consumed during the period of 30 days' credit which RMUK had granted to OWBAS. Such consumption might also occur before the expiry of any contractual credit period agreed between Owners and (the relevant) OWB company. This happened in respect of the present stem the subject matter of this arbitration."
H.1 Title in and to the Bunkers delivered and/or property rights in and to such Bunkers shall remain vested in the Seller until full payment has been received by the Seller of all amounts due in connection with the respective delivery. . . .
H.2 Until full payment of the full amount due to the Seller has been made . . . the Buyer agreed [sic] that it is in possession of the Bunkers solely as Bailee for the Seller, and shall not be entitled to use the Bunkers other than for the propulsion of the Vessel, nor mix, blend, sell, encumber, pledge, alienate, or surrender the Bunkers to any third party or other Vessel."
The nature of the contract
"42. . . .the combined effect of (1) the retention of title clause, (2) the period of credit before payment fell due, (3) the permission given to the Owners to consume the bunkers, and (4) the fact that some or all of the bunkers supplied were likely to be consumed before the expiry of the credit period with the consequence that property therein would cease to exist, means that the parties must be taken to have understood that it was likely that title would never be transferred to the Owners. It was possible that it would be, but not likely. It was certainly not an essential part of the transaction that it should be. As Atkin LJ said in the well-known case of Rowland v Divall  KB 500, "the whole object of a sale is to transfer property from one person to another". In the present case, however, the combination of features listed above means that it cannot have been the object of the contract to transfer property from OWBM to the Owners: both parties knew that this was unlikely ever to happen. Even if it did, because some bunkers remained unconsumed after 60 days, that was not fundamental to the transaction."
"43. . . . It stands to reason that what the Owners were paying for was not a title which they were never going to get, but something else."
"46. . . . In my judgment the true nature of the parties' bargain was that OWBM would deliver or arrange for delivery of the bunkers, which the Owners would be immediately entitled to use for the propulsion of the vessel."
Owners' liability to pay for the bunkers
Lord Justice Longmore :
"A contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price."
Section 49(1) relates to an action for the price and provides:-
"Where, under a contract of sale, the property in the goods has passed to the buyer and he wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods."
These sub-sections complement one another by providing that the Act applies to a contract to transfer property in goods and that an action for the price is maintainable once property is transferred.
Lord Justice McCombe :