BIMCO: Bunker Contract Amendments Not a Foregone Conclusion Following Res Cogitans OW Bunker Test Case Outcome

BIMCO says it will be studying the outcome of the case and others before making any decision on the possible impact on its Standard Bunker Contract

In the wake of last week's final decision in the so-called "Res Cogitans" OW Bunker UK test case, in which the UK Supreme Court found in favour of ING Bank / OW Bunker, BIMCO says it is "premature to say if changes need to be made to its standard bunker contract, BIMCO Terms 2015," Grant Hunter, BIMCO's chief officer for legal and contractual affairs, has told Ship & Bunker.

"The "Res Cogitans" is based upon a specific set of circumstances which we need to consider carefully before we jump to any conclusion in the context of our Bunker Terms.

"We will be studying the outcome of this and other legal cases involving the OW collapse before we make any decision on the possible impact on our Standard Bunker Contract."

One of the key findings of the case was that the Sale of Goods Act 1979 (SoGA) did not cover contracts signed with OW Bunker, but rather the contract with OW Bunker simply gave entitlement to use the bunkers, and required them to be paid for.

In advance of the decision, after three lower courts had made a similar determination, BIMCO issued guidance that "In the interim period BIMCO recommends to purchasers of marine fuels to incorporate into their bunker supply agreements the words 'The United Kingdom Sale of Goods Act shall apply to this Contract.'"

Hunter says that, even though the Res Cogitans judgement found SoGA did not apply, that decision does not make the inclusion of the new clause redundant.

"The reference to the SoGA in the BIMCO Terms was not added with the intent that it should somehow provide a solution to certain issues. It was added because it was the intention of the drafters that the SoGA should apply to this contract," he said.

"The new clause was added simply to place it beyond doubt what the drafters intended. The fact that some courts may draw different conclusions under some circumstances is another matter."