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Niall Hearty of commercial litigation specialists Rahman Ravelli sums up the case
UniCredit bank has lost its lawsuit for damages of $24.7 million over the loss of thousands of tonnes of oil at a port in the United Arab Emirates.
The High Court ruled that the owners of a vessel, Euronav, which carried the oil were not liable for the bank’s losses. UniCredit had sued Euronav for allegedly breaching its contractual obligations.
The bank said it had provided oil trader Gulf Petrochem with financing to buy oil from BP. But, according to UniCredit, the Euronav invoices which appeared to show the oil had been offloaded to six organizations which had purchased the oil from Gulf Petrochem “were not genuine”. The oil is said to have disappeared at the port of Fujairah.
Judge Clare Moulder said UniCredit agreed the oil would not be dumped in storage in Fujairah because the storage tanks were full. This, she said, meant the bank knew it was losing “the added protection of control”. She added that the lack of a bill of lading (a receipt for goods shipped) that was highlighted in the case did not cause the bank to lose.
The court found that if UniCredit was unaware that Gulf Petrochem was allowing Euronav to transfer oil to other vessels without production of the bill of lading, the bank would not have halted the process if it had known.
Although the judge pointed out that UniCredit would have suffered the loss even if a bill of lading had been produced, there were other factors at play in this particular situation. Issues such as port access, logistics and personnel were all considerations, especially as the transfer of oil occurred at the height of the Covid-19 pandemic.
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