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OW Bunker test case: the RES COGITANS – permission to appeal to the Supreme Court granted, February 2016

In our update of 26 October 20151, where we reported on the Court of Appeal (CA) decision in the RES COGITANS, we promised to update you on the status of any appeal of that decision to the Supreme Court.

On 11 February 2016, to the relief of many, the Supreme Court has granted an application for PST Energy 7 Shipping LLC to appeal the CA’s decision in this matter.

The CA upheld the first instance judge’s decision that the Sale of Goods Act 1979 did not apply to the relevant OW Bunker contract and owners were bound to pay OW Bunker for fuel not owned by them, exposing owners to the risk of also having to pay unpaid bunker suppliers.

Practitioners and the industry will no doubt be welcoming the prospect of a ruling from the Supreme Court, which it is hoped will clarify an area of law which many commentators believe has produced an uncommercial and unsatisfactory result.

The date that the Supreme Court will sit to hear the appeal is not yet known, but we shall keep you updated.



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