Expert Witness & Dispute Resolution

This organisation runs the Humber Oil Jetty that supplies the two Humber oil refineries, Conoco and Total-owned.   

A dispute arose when Associated British Ports refused to renew the 40 year lease on the jetty.  Channoil were approached to advise HOTT on the operability of the refineries and to demonstrate the absolute necessity of running the jetties. 

The outcome was a settlement that both parties could live with and we were congratulated by the Refinery owners on the quality of our report and evidence. 

A dispute arose between a trading company and a condensate producer.  The dispute related to a contract for the delivery of cargoes for a period of one year. The contract quality was limited to five specification points, whereas typical historic field data was specified in the contract.  The trading company had relied on the historic typical qualities coming from the production.   

Subsequent to contract signature, a new stream was introduced into the condensate stream resulting in a higher sulphur content. The buyer was not made aware of this change prior to the next cargo loading and was unable to utilise the condensate as previously.  

The producer claimed the sulphur content specification had been met and based their arguments on the wording in the used the Shell GT & Cs to justify his right to change the material up to the limit of the specification. The definition of ‘as usually produced from the field’ required clarification.  

Channoil gave expert evidence on the issue of quality for naturally-occurring crude oil and condensate fields. A settlement for compensation was satisfactorily agreed. 

Channoil provided evidence in the Commercial Court relating to the valuation of a cargo of oil product. Loading of the cargo was delayed by the seller - an oil refiner - at a time when the market was falling, leading to a loss in market value. 

The contract provided for pricing on the basis of Platts daily price assessments over a set pricing period, irrespective of the Bill of Lading (B/L) date. The seller argued that the pricing terms meant the buyer was not exposed to price risk from the B/L changing and that the seller's liability, if any, should be limited to demurrage, if incurred.  

The buyer argued that since he was denied the opportunity to sell on the day his tanker was due, the set pricing period was irrelevant.  The buyer claimed loss of value based on the difference between Platts quotations for the expected B/L and the actual B/L date.  

The use of a spread of dates for cargo valuation, as opposed to a single date, was accepted as an important principle by the Judge who ruled that a fairer way to determine quantum would be to take the average of Platts prices for the B/L date and the two days following the B/L date.  The ruling was based on the UK Sale of Goods Act.  

The major refiner suffered part damage and disruption of its supply logistics following arrival of two cargoes of crude oil contaminated by  organic chlorides. 

Channoil was instructed to carry out a study of the damage caused and the quantum of costs associated with the shutdown of the particular units and the operational consequences arising from processing the contaminated crude oil.  

We were able to bring a pragmatic and knowledge based analysis to bear on the cases that were subsequently amicably settled by claimant receiving a substantial sum. 

There have been a number of cases of breach of contract during the Covid-19 pandemic. The reasons are manifest, but most relate to disincentives due to price volatility.  These included: 

• Report and testimony regarding a contractual dispute. The claimant suffered losses due to the need to cover on going contracted sales, as a result of being supplied crude oil containing abnormally high levels of organic chlorides.  

• Report and testimony on of valuation of losses and damages incurred due to non-delivery of monthly crude parcels. 

A Taxation Authority needed advice as to how to set a formula for rebating liquids returned from Vapour Recovery Units (VRU) and returned to stock, having already paid excise.  

We were able to benchmark best practise and derive a formula that would work for both the revenue and the oil companies affected. 

Our advice has now set the standard for tax treatment in such cases.