In BP Oil International v Panoro Equatorial Guinea (HHJ Pelling KC, 17 August 2026), the Commercial Court granted BP an interim injunction restraining the defendant from selling or marketing to third parties its entitlement to crude oil from an offshore Equatorial Guinea field.
The defendant had attempted to terminate a long-term contract with BP because it wished to sell its crude oil to a third party. BP refused to accept the termination and applied for an interim injunction to prevent the threatened sale.
The Commercial Court accepted that it was reasonably arguable that the contract between the parties contained negative covenants by which the defendant had agreed not to sell or market its crude oil other than to BP. It concluded that the case fell within the principle that negative covenants are generally enforced by injunction regardless of the balance of convenience or the adequacy of damages.
The Commercial Court also rejected the defendant’s argument that restraining the contractual breach was tantamount to ordering specific performance of a contract for the sale of unascertained goods.
The decision is an interesting example of the use of equitable remedies to enforce a commercial contract.
BP was represented by Michael Fealy KC, Sam O’Leary and Taran Molloy, instructed by Herbert Smith Freehills Kramer LLP.
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