Trafigura Pte Ltd v El Soobat Energy Co Ltd

Permission to seek summary judgment may be granted where the claim was validly served, the court has jurisdiction and the claimant reasonably believes that a reasoned judgment will be more readily enforceable than a default judgment.

Summary judgment is appropriate where the respondent has no realistic prospect of success and there is no compelling reason for trial. The court may determine a short point of law or construction, while avoiding a mini-trial.

Where no available market exists for goods, damages under the Sale of Goods Act 1979 may be assessed by the loss directly and naturally resulting from the breach. A reasonable resale may provide the appropriate evidence of loss.

Trafigura sought summary judgment for unpaid sums, resale losses, demurrage and interest under a contract for the sale of gasoline. The contract was governed by English law and contained an exclusive English jurisdiction clause.

El Soobat Energy was served with the proceedings and the summary judgment application but filed no acknowledgment of service or defence. It did not appear at the hearing. The court considered whether to proceed in its absence, whether permission was required under CPR 24.4(1), and whether the claims satisfied the summary judgment test.

The central issues were whether the claim should proceed to judgment on the merits for enforcement purposes, whether there was any realistic defence, and whether any compelling reason required a trial.

1. Proceeding in the defendant’s absence. The defendant had received appropriate notice of the proceedings, application and hearing, had ample opportunity to participate, and voluntarily chose not to do so. There was no reason to adjourn and a public interest in avoiding further delay. The hearing therefore proceeded under CPR 23.11.
2. Permission. Permission under CPR 24.4(1) and the summary judgment application could be sought in the same application notice. The purposes of the rule were to protect participation and jurisdictional rights. A claimant’s reasonable belief that a reasoned judgment would be more readily enforceable than a default judgment was sufficient; the court need not examine that belief minutely. Service was valid, the exclusive jurisdiction clause gave the court jurisdiction, and the enforcement concern justified permission.
3. Summary judgment test. The court applied the principles approved in The LCD Appeals. The defendant had no realistic prospect of defending the claim. The contract was authentic and valid, the advance payment obligation had been breached, and the contractual default provisions had been engaged. No disputed fact or further investigation justified a trial.
4. Loss. The prima facie market measure under section 50(3) of the Sale of Goods Act 1979 did not apply because there was no available market. The evidence established that SPC was effectively the only realistic local buyer, while an external sale involved substantial logistical difficulties and an expropriation risk. The resale and swap arrangements were reasonable mitigation, and the difference between the contract price and the prices achieved represented the loss directly and naturally resulting from the breach under section 50(2).
5. The contractual demurrage claim and interest were also due. Summary judgment was granted for the claimant, together with permission to apply for it. Costs were summarily assessed at £190,000.

First-instance decision. The judgment describes the procedural history of the claim and the applications for extensions and alternative service, but no earlier judgment in the same claim was under appeal.