Trafigura PTE Ltd v Taci Oil International Trading and Supply Company SH.A

Clear written repayment terms govern a deferred payment arrangement where the evidence shows that the parties agreed no flexibility as to due dates. The court will not imply a general obligation of cooperation or good faith discussions where it is inconsistent with the express agreement and unsupported by the evidence. An admission made by a senior employee may bind a company where actual authority is inferred from the employee’s role and conduct, or where apparent authority has been represented to the counterparty. A claimant who proves the contractual calculations is entitled to judgment for the outstanding principal and interest.

Trafigura claimed the deferred balance of the purchase price for gasoil supplied to Taci Oil under a written deferred payment regime. Taci Oil was entitled to receive goods against payment of 50 per cent of their value, with the balance payable within 90 days, subject to contractual interest. The defendant had made only limited payments and did not participate in the trial.

The defence alleged that the repayment dates remained subject to discussion and flexibility, that Trafigura had failed to engage in good faith discussions, that an admission by the defendant’s head of finance lacked authority, and that the sums claimed were unproved. The court determined those issues and the amount outstanding.

1. Express repayment terms. The written deferred payment regime stated clearly that the unpaid balance was due 90 days after the initial payment. The defendant’s vague and unparticularised allegation that the parties had agreed flexibility as to repayment dates was unsupported by evidence and was rejected.
2. No implied cooperation obligation. The agreement contained no agreed principle of cooperation and flexibility. There was no good reason to imply such a term, given the precise written repayment provisions and the parties’ contemporaneous understanding. In any event, the evidence showed that Trafigura had engaged in lengthy correspondence about repayment, so there had been no failure to conduct good faith discussions.
3. Authority and admission. The defendant’s head of finance had actual authority to admit the debt. That authority was inferred from her senior position, her participation in negotiating and operating the financing arrangement, and her continuing role as the primary contact concerning the defaults. Alternatively, she had apparent authority because the defendant had represented or permitted it to be represented that she could act on its behalf. Her email therefore had substantial evidential value, notwithstanding the unsupported challenges concerning legal advice, English-language ability, knowledge of English law, and knowledge of the relevant facts.
4. Quantum and disposition. The claimant’s evidence and supporting documentation proved the outstanding principal and interest, calculated under the deferred payment regime, at US $5,296,232 as at the day before judgment. Judgment was given for the claimant in that sum.