Angara Maritime Ltd v Oceanconnect UK Ltd & Anor

Section 25(1) of the Sale of Goods Act 1979 protects an owner who acquires bunkers from a charterer in possession if the statutory requirements are satisfied.

The relevant inquiry is whether the buyer obtained possession with the seller’s consent, whether there was delivery to the owner, and whether the owner acted in good faith without notice of the original seller’s rights. Delivery is a question of fact and does not depend solely on the contractual machinery governing redelivery. A sub-bailment on the terms of a time charter may also defeat a bailment claim by the unpaid supplier.

Angara owned a vessel let on time charter to Britannia. Britannia bought bunkers from Oceanconnect under terms retaining title in Oceanconnect, but failed to pay and entered administration. Britannia subsequently redelivered the vessel early with bunkers remaining on board.

Oceanconnect claimed that Angara was liable in conversion, bailment and unjust enrichment. Angara sought a declaration of non-liability, relying principally on section 25(1) of the Sale of Goods Act 1979. The central issue was whether the statutory protection applied to the transfer of the bunkers on early redelivery.

1. Judgment for the claimant. Angara acquired good title to the bunkers under section 25(1) of the Sale of Goods Act 1979, so Oceanconnect’s otherwise valid conversion claim failed.
2. The court adopted the four-stage approach in Forsythe International (UK) Ltd v Silver Shipping Co Ltd [1994] 1 WLR 1334: whether the charterers obtained possession with the seller’s consent; whether there was delivery to the owners; whether the owners acted in good faith without notice; and whether the final statutory deeming provision was satisfied.
3. The first stage was satisfied because Britannia obtained possession with Oceanconnect’s consent. The second stage was also satisfied. Britannia’s telephone call, email and the accepted redelivery constituted a voluntary act amounting to delivery. This was a question of fact, not merely contractual construction. The parties had in any event agreed to an early redelivery involving Angara taking over the bunkers.
4. Angara acted in good faith and without notice of Oceanconnect’s rights. There was no evidence of negligence or suspicion sufficient to put Angara on enquiry. The relevant statutory burden remained on Angara, but it could be discharged on the evidence as a whole.
5. The fourth stage was satisfied for the reasons given in Forsythe International (UK) Ltd v Silver Shipping Co Ltd. The court therefore rejected the submission that the statutory protection was unavailable because Britannia was not acting as a mercantile agent.
6. The bailment claim also failed. Angara was a sub-bailee on the terms of the charterparty, following the principle illustrated by The Pioneer Container [1994] 2 AC 324. Oceanconnect could be in no better position than Britannia and had no better bailment claim against Angara.
7. The unjust enrichment claim was insufficiently established and failed.