KG Bominflot Bunkergesellschaft v. Petroplus Marketing
DMC Category Rating: Confirmed and Developed
Case note contributed by Jim Leighton, BSc (Hons), LLB (Hons), LLM (Maritime Law), Trainee Solicitor of Hill Dickinson LLP and International Contributor to DMC’s CaseNotes
An analysis of the gasoil, in accordance with the terms of the contract, was found to be on-specification at the loadport following shipment. However, upon arrival at its intended destination, some four days later, the gasoil was found to have exceeded the maximum sedimentary requirement of the specification clause.
The buyer’s case was that there was implied term that the gasoil would remain on-specification (a) through the duration of a normal voyage from shipment until discharge and for a reasonable time thereafter, or (b) for a reasonable time following shipment. The seller’s case was that any implied terms of the nature proposed by the buyer were inconsistent with other terms of the contract and were also precluded by the exclusion clause.
As regards the arguments that the implied terms were inconsistent with other express terms in the contract or were excluded by the exclusion clause, the judge held that the requirement that the goods answer a detailed specification was not inconsistent with an obligation that the goods be of satisfactory quality both at the point of delivery and for a reasonable time thereafter. Nor was the specification clause inconsistent with an obligation that the goods remain on specification post delivery for a reasonable time.
The certificate final clause was not inconsistent with the proposed implied terms. This was because (1) the specification only required the gasoil to be on specification at the point of delivery / on shipment onboard the vessel, and (2) the loadport certificate would only be final as to the matters referred to in the specification clause at the point of delivery.
As for the exclusion clause, so deeply ingrained was the status of a condition in English law, as an obligation the breach of which gives the counterparty the right to terminate the contract or to affirm the contract and sue for damages, that the exclusion clause was not to be construed as extending to conditions, unless it expressly so provided. But in this case, the word "conditions" appeared nowhere in the clause.
However, given that the contract failed to exclude expressly the implication of terms in the nature of a condition and because there is clear law implying such a term into CIF, C&F and FOB contracts, the decision is perhaps less unexpected than it initially appears to be. In effect, achieving the intended commercial purpose of certificate final clauses is predominantly dependent on the express exclusion of implied terms. This in turn depends on the use of clear and precise language to achieve these ends.
The present case therefore mainly turns on the fact that the exclusion clause did not include express reference to "conditions". Alternatively, the certificate final clause would need to have been more precise in its language to ensure that once-and-for-all finality for all quantity and quality claims, including those following shipment, was achieved.
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