STATOIL ASA V LOUIS DREYFUS ENERGY SERVICES LP

[2008] EWHC 2257 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Aikens, 29 September 2008

Sale of goods – Demurrage – Contract negotiations – Whether sale contract contained a term providing for demurrage – Whether exchanges post demurrage situation had resulted in agreements on the sum if demurrage due – Unilateral mistake

The claimants Statoil were entitled to recover a sum being the balance of demurrage due to it under the terms of a contract for the sale of a cargo of so-called liquid propane gas. The contract had been made in mid 2006 by exchange of e-mails with the parties in turn proposing various terms. The judge’s conclusions were: First, a proposal for a demurrage time bar clause had been met with the response “accept/except: 40,000 USD PDPR” and the judge held that this amounted to a rejection of the time bar clause. Second, in arriving at a first settlement agreement on 26 January 2007 on the demurrage sum due between the parties, one party had operated on the basis of an error in relation to the date of final discharge. The agreement was binding on the parties. A unilateral mistake could not give rise to rescission of the agreement where although it was the basis on which the agreement was made, the mistake did not become part of the agreement. If there was no equitable jurisdiction in the case of a common mistake, it was impossible to see a rationale for such jurisdiction in the case of a unilateral mistake, at least in the absence of misrepresentation by the other party. Third, the first settlement agreement had been superseded by an exchange on 19 March 2007 leading to an oral agreement on the sum of demurrage due. As a result, Statoil was entitled to succeed in its claim for demurrage under that agreement.