Force Majeure, Foreseeability And FOB Incoterms

Great Elephant v. Trafigura Beheer BV and Others (Crudesky) [2012] EWHC 1745 (Comm) and [2013] EWCA Civ 905

Ince & Co recently represented Vitol Asia and Vitol S.A. before the Court of Appeal in the matter of the Crudesky. The case arose out of the loading of a cargo of crude oil in late August/early September 2009 at the Akpo FPSO Terminal (the "Terminal") off the coast of Nigeria, which is operated by Total.

The background facts

The key facts, as summarised by the Court of Appeal, were as follows:

China Offshore Oil ("COOSI") sold and Vitol Asia bought a parcel of 1 million barrels of Akpo Condensate for delivery FOB at the Terminal. Shortly thereafter, Vitol Asia sold the same quantity on the same terms to Vitol S.A., who in turn on-sold the cargo to Trafigura, also on FOB terms. Trafigura nominated the Crudesky ("the Vessel"), which it had already chartered from Great Elephant Corporation as disponent owners ("Owners"), on an amended BP Voy 3 form. The Vessel arrived at the Terminal on 29 August 2009. The Master tendered NOR at 00.01 on 30 August and laytime under the charterparty began at 06.01 that day. The Vessel berthed on 31 August and hose connection was made, but loading could not begin because the export valve was padlocked and no representative from the Department of Petroleum Resources ("DPR") was present with a key to unlock the padlock - the DPR representative at the Akpo Terminal having left the previous day without informing Total and without the permission or approval of the DPR in Port Harcourt. As a result, Total's lifting supervisor, Mr Bankole, telephoned the DPR office at Port Harcourt to ask when a DPR representative would arrive at the Terminal and was informed that a Mr Idoniboye would arrive sometime on 1 September. Mr Bankole then discussed the matter further with DPR's Head of Operations at Port Harcourt, Mr Pepple, and asked if it would be possible to begin loading while the DPR representative was not present at the FPSO. Later on 31 August, following that conversation, the padlock on the export valve was cut on Mr Bankole's instructions and loading began. Mr Idoniboye arrived at the Terminal on 1 September. At about the same time, Total's Lagos office asked for written clearance for loading from the DPR in Lagos. The Lagos office was the "official" office authorised to grant loading clearance, not the DPR in Port Harcourt which had been approached by Mr Bankole. Written clearance was granted by the DPR in Lagos later that afternoon and Mr Idoniboye was told to print out the clearance given but he was unable to do so because of printer issues with his computer. At 21.00 hours, loading was completed and, about that time, Mr Idoniboye received notification that the DPR in Lagos had revoked the clearance it had given earlier. At 21.54, hoses were disconnected and, at 22.18, the vessel was unmoored from the FPSO and began to drift. She could not leave because she had not received documents evidencing the loading of the cargo. At 09.19 on 3 September, the laytime allowed by the charterparty expired and the vessel was thereafter on demurrage. On 7 September, the DPR in Lagos sent two letters. The first was to Total noting...