Lloyd's Maritime and Commercial Law Quarterly
OF BUNKERS AND RETENTION OF TITLE: WHEN IS A SALE NOT A SALE?
Andrew Tettenborn *
The Res Cogitans
In July 2015 eyebrows were discreetly raised at the news of Males J’s determination that an agreement to bunker a ship on reservation of title terms was not a contract for the sale of goods. On the other hand, it was noted that permission to appeal the decision had been very smartly given, and not a great deal more notice was taken at the time. But, now that the Court of Appeal has agreed with Males J, the case is worth at least a second look.
PST Energy 7 Shipping LLC v OW Bunker Malta Ltd (The Res Cogitans)
1 was part of the fallout from the collapse of the OWB group, previously one of the world’s biggest bunker suppliers. Put in its simplest terms and cutting where necessary through the corporate thicket, in November 2014 OWB bunkered PST’s tanker Res Cogitans at a port in Russia. The bunkers were supplied on 60 days’ credit and under a reservation of title clause. That clause made explicit what would probably have been implicit anyway, namely that the shipowners could consume the bunkers in the ordinary way even while the suppliers remained unpaid. OWB had itself got the bunkers on 30 days’ credit from Rosneft; this was again on reservation of title terms, though without any explicit licence to consume. Not having been paid by OWB, Rosneft understandably insisted that the bunkers still belonged to it and demanded that PST pay it direct. At the same time, however, PST also faced contractual demands for payment from OWB (or rather their bankers, but nothing
CASE AND COMMENT
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