Certificate not so final: The Mercini Lady in the Court of Appeal


It is highly unusual for trading companies to have a real and urgent interest in a case in the English Court of Appeal. However the Court of Appeal recently heard the appeal by FOB Sellers on the decision of "The Mercini Lady" (KG Bominflot Bunkergellschaft fur Mineralole mbh & Co KG v Petroplus Marketing AG [2009] EWHC 1088 (Comm)(22 May 2009)), and this case requires all traders to watch and listen.

The initial judgment by Mr Justice Field in the Commercial Court caused much controversy for two reasons. First, it exposed FOB sellers to the risk of goods deteriorating after loading, even in a "certificates final on loading" contract. Second, it decided that standard exclusion wording was ineffective based on a very precise and legalistic interpretation of the wording. Reed Smith attended the Court of Appeal hearing to assess whether this controversial position is likely to change.

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