'CHEMSTRANS RHINE' - Sampling Dispute Underlines Need For Clarity In Contracts

In Mena Energy DMCC v Hascol Petroleum Ltd (The "CHEMSTRANS RHINE") (2017), the Court was asked to examine a dispute over the quality of a cargo of fuel oil in a matter where the sampling procedure became a central issue.

The Facts

Hascol, a Pakistan-based importer, entered into a contract for the sale and purchase of a shipment of fuel oil, described as "HSFO 125 cSt", from Mena, a UAE based trader of crude oil and petroleum products.

By way of background, HSFO with a viscosity of maximum 125 cSt is not available as a finished product in the region; the product coming out of the refineries generally has a viscosity of over 180 cSt. The common practice to get to a product of viscosity of 125 cSt or lower is by the blending of the higher viscosity HSFO with other components such as gasoil and cutter stock.

The blending can either be done on board the vessel or in shore tanks before loading. Blending in shore tanks is more efficient for producing a homogenous product compared to blending on board (using the ship's heating and circulation system), as the different components may not be fully blended by the time of the vessel's arrival at the discharge port.

However, this would usually not be a problem as the cargo would be thoroughly blended during the discharge process, as discharge would be carried out under pressure. This could be a problem if the contract requires the product to be homogenous in the ship's tanks as opposed to being homogenous in the shore tanks after discharge.

In the present case, the different components were not pre-blended in the shore tanks before they were loaded onto the vessel at Fujairah.

Upon the vessel's arrival at Karachi, spot samples were drawn from the vessel's tanks. This was done in the presence of personnel from the Hydrocarbon Development Institute of Pakistan (HDIP) as well as SGS.

Two common methods of sampling are used in the industry - spot sampling or running sampling. Spot sampling takes samples of the cargo from specified heights in the tank, e.g. upper, middle and lower or top, middle and bottom. Running sampling draws a container through the full height of a column, thus obtaining a sample which is representative of the cargo at all depths. If the cargo is not homogenous or stratified, spot samples would not give an accurate picture of the overall cargo quality.

Further, sampling can be done in a closed or open system, i.e. with hatches closed or open. In this particular instance, the samples...

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