Originally from International Arbitration Court Decisions - 3rd Edition

JUDGMENT OF THE COURT OF APPEAL (CIVIL DIVISION) OF ENGLAND RENDERED IN 2001 IN CASE 1832

Subject-Matter:
When is an expert’s departure from instructions deemed to be material?

Finding:
A departure from instructions is material unless it is trivial or de minimis in the sense that it obviously made no possible difference to either party.

Parties:
Claimant: Veba Oil Supply & Trading GmbH (“Veba”/“Buyers”) (Germany)
Respondent: Petrotrade Inc., (“Petrotrade”/“Sellers”) (United Kingdom)

Place Of Court Procedures:
England

Applicable Law:
English

Summary1

Background

The parties had entered into a contract in which the respondent sold 25,000 metric tons of gasoil to the claimant. Clause 10 of the contract provided that the quantity and quality of the cargo was to be determined by an independent inspector at the loading installation in Antwerp and that the inspector’s determination was final and binding on both parties. The clause reads as follows:

10. Quantity/Quality

Quantity and quality to be determined by a mutually agreed independent inspector at the loading installation, in the manner customary at such installation. Such determination shall be final and binding for both parties save fraud or manifest error. Inspector to be appointed by Seller. Costs to be shared equally between Buyer and Seller.