In PST Energy 7 Shipping LLC Product Shipping & Trading S.A. v O.W. Bunker Malta Ltd & Ors  EWCA Civ 1058 (available on BAILII) bunker suppliers OWBM delivered bunkers to a vessel at a Russian port, on 60 days’ credit. Under the contract they reserved title until payment but, realising that bunkers exist to be burnt, consented to the ordinary use of the bunkers to propel the ship.
Big deal, you might say: what’s the hassle? Well, the suppliers had bought from other suppliers RMUK also on reservation of title terms — not including any provision for use — and hadn’t paid. The shipowners were at a loss who to pay — OWBM or RMUK. To forestall a demand from RMUK the shipowners argued that they could not have to pay OWBM, since OWBM had not provided title to the bunkers and hence were in breach of s.12 of the SGA. Males J said ( EWHC 2022 (Comm)) that the owners were bound to pay OWBM. This was not, he said, a sale of goods at all (!!), since both parties contemplated that by the time property passed there wouldn’t be any goods for the shipowners to become owners of. The shipowners had agreed to pay, not for oil, but for a licence to burn oil: they had received this, and therefore had no defence to a claim for payment.
A screwy result? Certainly looked like it, and expedited leave to appeal was given. Not that it did any good: the CA has now dismissed the appeal and confirmed the shipowners’ liability to pay. What, you might ask, if the shipowners now find themselves liable to RMUK? We’ll leave that to another day, says the court.
At the risk of sounding cynical, this looks like at least another couple of terms’ school fees assured to the lawyers engaged in sorting out this debacle. And you thought the definition of what counts as a sale of goods was a boring subject …
Hard on the heels of legislation in the Insurance Act 2015 about fraudulent claims by the insured, readers may like to know that insurers can now take comfort from s.57 of the Criminal Justice and Courts Act 2015 concerning third party dishonesty. Essentially where there is substantial dishonesty in or about an injury claim the entire claim falls to be dismissed, subject to a “substantial injustice” exception.
LLM Credit and security students might care to note s.1 of the Small Business, Enterprise and Employment Act 2015. This gives the right to pass regulations disallowing anti-assignment clauses where the interests of receivables financiers are concerned. This effectively reversing Helstan v Herts CC  3 All ER 262.
An interesting decision of the Federal Court of Australia in The Sam Hawk  FCA 1005. For the purpose of determining if a claimant has a maritime lien for a contractual claim (here the supply of bunkers), the law of the contract under which the bunkers were supplied controls. The court refused to follow the Privy Council in The Halcyon Isle  AC 221 .
More details at http://www.hfw.com/Arrest-of-the-SAM-HAWK-October-2015
This is a blog for commercial lawyers. Three other blogs (or rather, one blog and two discussion lists) help keep us well-informed and deserve a plug.
First, there’s a new North American blog based at Harvard, entitled New Private Law: Project on the Foundations of Private Law. Started brilliantly and promises well. Go to http://blogs.law.harvard.edu/nplblog/
Second, the Association of American Law Schools’ AALS Contracts listserv. Mainly US, but some English and European input too. A listserv is essentially an email exchange facility. If you have a thought, you send it to their composite email address (email@example.com) and it automatically goes to all subscribers. Long threads can build up. You have to be a subscriber to participate. To become one, send an email to firstname.lastname@example.org with just the wording SUBSCRIBE AALSCONTRACTS in the message body. Enquiries to the list owner at email@example.com. You get a steady trickle of emails, which occasionally becomes a gush when something sexy comes up.
Third, there’s the Obligations Discussion Group (ODG). Also a listserv; same principles as above. Run by the excellent Prof Jason Neyers at the University of Western Ontario in London, Ontario, Canada. English and Commonwealth predominantly; some US. Intelligent, informal and fun. To join, contact Jason Neyers at firstname.lastname@example.org. A bit like London buses: you can go a long time with nothing at all and then your inbox gets deluged with argument for a few hours.