The UK Supreme Court has today given its eagerly anticipated judgment in the UK test case the "Res Cogitans". The Supreme Court has unanimously dismissed the appeal and has upheld the decision of the Court of Appeal that a bunker supply contract between OW Bunker and Owners was not covered by the Sale of Goods Act 1979.
The Supreme Court was asked to determine two questions in relation to a bunker supply contract under which OW Bunker Malta Limited supplied bunkers to the vessel "Res Cogitans":
- Is the contract a contract of sale of goods within the meaning of s.2(1) of the Sale of Goods Act 1979?
- If not, was it an implied condition of the contract that OW Bunker Malta Limited would perform its obligations to its supplier, in particular by paying for the goods timeously?
The answer the Supreme Court has given to these questions is: 1. No, and 2. No.
On face value this means that OW's failure to transfer title in the bunkers or pay its supplier for the bunkers did not release Owners from their obligation to pay OW.
A more detailed analysis will follow on the judgment, its implications for this matter and its implications for the bunker industry.