Where an owner’s property is mixed with other similar property, difficult questions arise in relation to retaining proprietary rights at law. There are various possibilities, depending upon the facts. The property may be mixed in a way in which it still remains easily identifiable, such as where a number of paintings are collected by a thief but each painting can be identified and extracted from the bulk. The law is straightforward in this situation: ordinarily the owner will retain legal title and can follow and recover his painting, suing in conversion if necessary. By contrast, difficulties occur where the property has been mixed with other similar property, such as grain or oil, so that the property has been permanently commingled. It may be that the original owner’s property forms a minor or a major addition to the mixture and it may be that the mixing has produced a new entity, such as where grapes are turned into wine. An additional complication is that the mixing may be consensual, in the sense that it is authorized by a contract between the parties, or it may be unauthorized and therefore wrongful.

The defendant, Metro Trading International Inc. (MTI), bought and sold oil. MTI stored and mixed oil of the same grade or blended different qualities of oil to sell to vessels as bunker oil or to traders on the open market as fuel oil. The mixing and blending was carried out in MTI’s oil storage facilities at Fujairah, which is part of the United Arab Emirates. One set of claimants, which included Glencore, had deposited parcels of oil for storage with MTI but, when MTI became insolvent, it was discovered that there was a serious shortfall. There were other competing proprietary claims from purchasers of oil and also from a group of banks holding charges over MTI’s assets.

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