Vitol has won a multi-million dollar pay-out from a Dubai shipowner after a chartered VLCC was delayed in Ghana.
The trading giant had fixed Rhine Shipping's 321,000-dwt Dijilah (built 2O19) in 2020 to load crude cargoes in West Africa.
But the ship was delayed in Ghana when items of property on board were arrested at the request of third parties taking part in unrelated arbitration in London against the bareboat charterer of the tanker.
This resulted in the Dijilah being detained for some days until security was posted.
The delay in loading at the next port of Djeno in Congo is said by Vitol to have caused it to pay an increased price to the seller of the oil.
Rhine Shipping had sued for unpaid demurrage of $3m, while Vitol had launched a counterclaim of $3.7m plus interest for breach of the charter.
The trial also considered the effect of Vitol's hedging arrangements on the recoverability of loss.
These processes involved recording a notional internal “swap” in respect of each of the pricing dates that would have been used to price the cargo, and then “rolling” these to later dates once the vessel was delayed.
Simon Birt KC, sitting as a deputy judge of the English High Court, held that there had been a breach of the warranty by Rhine Shipping and the indemnity was engaged.
The judge also ruled the likelihood of the vessel meeting the originally anticipated loading date was sufficiently certain that damages were to be assessed on the basis of that date.
And Birt found that the internal hedging transactions did not have the effect of reducing Vitol’s loss.
The owner was ordered to pay $3.7m to Vitol, plus interest.
Barrister Paul Toms of Quadrant Chambers acted for Vitol.
