VITOL SA v GENSER ENERGY GHANA LIMITED

In a negotiated commercial contract, a payment default notice is effective if it clearly demands payment required by the contractual default clause. It need not spell out the contractual cure period or the consequences of non-payment unless the contract requires this.

Contractual notice provisions are construed objectively. Listing several possible recipients does not necessarily require service on every recipient or create a condition precedent to validity.

A contractual time bar extinguishes a claim where the buyer challenged the quantity within the contractual period but the seller failed to commence proceedings in time. A general agreement to pay interest cannot be inferred from isolated agreements concerning particular invoices.

Statutory late-payment interest may apply to an internationally connected contract where payment was to be made in England and the supplier carried on relevant commercial business there.

Vitol claimed sums arising from the sale and purchase of propane under a series of contractual addenda with Genser. The principal claim concerned a settlement amount calculated after Vitol terminated and liquidated the agreement following Genser’s failure to pay a revised cargo invoice.

Genser challenged the invoice due date, the validity and service of the default notice, and the settlement amount. In the alternative, it disputed three unpaid invoices, relying on a contractual time bar, denying any general agreement to pay late-payment interest, and invoking force majeure.

The court also considered whether statutory interest was recoverable under the Late Payment of Commercial Debts (Interest) Act 1998.

1. Settlement amount. The revised March invoice was due 90 days after the last business day of the month in which the February deliveries were made. In any event, the parties expressly agreed that the revised invoice retained the original invoice date. Genser was therefore in default when it failed to pay by 29 May 2019 (paras 86–88).
2. The 30 May email was a valid default notice. The Events of Default Clause required notice to make payment. It did not require the notice also to state that payment had to be made within two banking days or that Vitol would terminate and liquidate if payment was not made. Such a requirement would rewrite the bargain (paras 90–95).
3. The notice was validly served. The Notice Clause did not make strict compliance a condition precedent and did not require service on every listed address. Service on a relevant senior officer and the financial contact was sufficient (paras 96–101).
4. Alternatively, Genser would have been estopped from denying the validity or service of the notice. The court applied the principles restated in Tinkler v HMRC [2021] 3 WLR 697: common assumption, responsibility, reliance and sufficient detriment (paras 102–105).
5. The principal challenges to the settlement amount failed. The court therefore gave judgment for Vitol on that claim. The alternative invoice claims were considered.
6. The June 2018 cargo claim was extinguished by the Time Bar Clause. The independent inspector’s quantity was determinative unless challenged within 45 days, and Genser had challenged it within that period. Vitol’s failure to commence proceedings in time barred the claim (paras 108–112).
7. Genser was not liable for the late-payment interest invoice. The Seventh Addendum was never agreed or performed, and the evidence established only two specific agreements to pay interest, not a general agreement (paras 113–116).
8. Genser could not rely on force majeure in respect of the June 2019 floating-storage charges. The SPA had already been terminated. In any event, the NPA Letter did not establish prevention of performance or prevent payment of an accrued financial obligation (paras 117–123).
9. Statutory interest was recoverable. Applying Martrade Shipping & Transport GmbH v United Enterprises Corpn [2014] EWHC 1884 (Comm), payment in England and Vitol’s relevant commercial operations in London gave the contract a significant connection with England for the purposes of section 12 of the Late Payment of Commercial Debts (Interest) Act 1998 (paras 125–143). Alternatively, interest could be awarded under section 35 of the Senior Courts Act 1981 (para 144).

First-instance decision. No prior appellate decision is stated in the judgment.