CHIMBUSCO PAN NATION PETRO-CHEMICAL CO LTD V ARKSTAR SHIP MANAGEMENT PTE LTD

[2019] HKCFI 57, HKSAR Court of First Instance, Mr Recorder Manzoni SC, 11 January 2019

Contract – Claim for price of bunkers – Merchantable quality – Reasonably fit for purpose – Control of Exemption Clauses Ordinance (Cap 71)

The plaintiff had sold a quantity of bunkers to the defendant and had them delivered to the defendant’s vessel Arkstar Voyager by a third party, the plaintiff’s seller, in Singapore in February 2014. This was its claim for the full invoice price plus interest and costs. The defendant counterclaimed, alleging that the bunkers were contaminated with microbiological organisms upon delivery and therefore not of merchantable quality or reasonably fit for purpose. Upon delivery, samples had been taken by the third party and the defendant. In May 2014, following an engine breakdown traced to contaminated fuel, the remaining fuel and one of the delivery samples were tested. One of the three samples of the remaining fuel, but not the other two and not the delivery sample, showed microbiological contamination. The plaintiff disputed the defendant's right to any deduction based on a 30-day notification term in the General Terms and Conditions and asserted that any counterclaim was time barred by a contractual 12-month time bar in the exclusive HK jurisdiction clause. The defendant argued that some of the terms of the contract fell foul of the Control of Exemption Clauses Ordinance (Cap 71).