In The Nounou [2020], cargo of HFO from multiple shore tanks was loaded onto the vessel with the intention of blending it onboard to meet ISO 8217:2010 standard. HFO in two of the seven shore tanks had excessively high TSP (a measure of future precipitation of asphaltenes) and as the experts later found out, the cargo in all the shore tanks were incompatible. As a result, the entire cargo was off-spec after being loaded in ship’s tanks. Buyers were claiming a loss of $7m. Had the risk already passed to the buyer at this stage and given that the COQ showed the cargo to be on-spec, was the buyer to cede to seller’s request for payment under the ‘pay now, sue later’ provision?
As per the court, because of the incompatibility of the cargo, 'production of an off-spec cargo after blending on board was, in practical terms - inevitable'. This was a contractual breach by the seller. Had incompatibility been known before, loading process would have been altered.
As regards the measure of damage, the court found that there was a market for high TSP fuel as the sellers had claimed, although there was no direct market to end consumer because of the risk of engine problems. The loss claimed by the buyer was found to be overly exaggerated and was finally awarded only half of it.
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