National Bank of Abu Dhabi v BP Oil International Ltd [2016] EWHC 2892 (Comm)
On 18 November 2016, Carr J gave judgment in what is understood to be the first judgment given in a case conducted under the pilot Shorter Trials Scheme (CPR PD51N). The claim was issued in March 2016, the trial was heard on 7 November 2016, and Judgment was given just over a week later.
The Claimant (NBAD) purchased, from the Defendant (BP), 95% of a debt (in the sum of around US$70m) owed to BP by a Moroccan Oil Refining company named SAMIR. The purchase was made under a Purchase Letter, in which BP promised to convey certain rights to NBAD – including, amongst other things, making an equitable assignment to NBAD of the debt. BP also warranted to NBAD that it was not prohibited by any of its own agreements from disposing of or selling the debt to NBAD.
However, following SAMIR’s insolvency and failure to satisfy the debt, it transpired that BP’s contract with SAMIR contained a ‘no-assignment without reasonable consent’ clause, and BP had not sought or obtained SAMIR’s consent to any equitable assignment to NBAD. NBAD accordingly claimed against BP for breach of warranty and sought an order that, in accordance with the mechanism under the Purchase Letter, BP had to repay NBAD the price paid by NBAD for the debt, as well as contractual interest.
Carr J held that the existence of the no-assignment clause and BP’s failure to obtain SAMIR’s consent to any such assignment as at the warranty date rendered the warranty false – because BP was indeed prohibited by an agreement from disposing of or selling the debt to NBAD. The Court gave judgment for NBAD in the sum of US$68,881,854.62 plus contractual interest.
Rhodri Davies QC and Nicholas Sloboda appeared for NBAD (instructed by Damian Taylor of Slaughter and May).
You can view the full judgment here.