Co-authored with Elizabeth Farrell

The recent decision of the High Court in Finco International AG v Integra Petrochemicals Europe AG [2026] EWHC 727 (Comm) offers important guidance for those trading oil and oil products on contracts incorporating the BP Oil International Limited General Terms and Conditions 2015 Edition, version 1.2 (“BP GTCs”). The guidance relates to two distinct but related questions: first, a reminder of the meaning of “delivery dates” provisions in the context of CIF and DES contracts; and second, the proper construction of the vessel nomination and rejection provisions within the BP GTCs. The case is a timely reminder that changing a single delivery term can have far-reaching and unintended consequences, and clarifies that buyers wishing to reject a vessel nomination must act swiftly and clearly.

Background and Facts

In October 2023, Finco International AG (“Buyer”) agreed to purchase 10,000 metric tonnes of methyl tertbutyl ether (“MTBE”) from Integra Petrochemicals Europe AG (“Seller”) under an email recap incorporating v.1.2 of the BP GTCs. The contract originally provided for delivery on DES (delivery ex ship) ARA (Amsterdam, Rotterdam, Antwerp) terms, with delivery dates of 10–24 November 2023 (“Delivery Dates”). Two days later, the parties amended the delivery term to CIF (cost, insurance, freight), but did not change the Delivery Dates.

Seller nominated the M/T Aramon, a long-range vessel, as the performing vessel. Buyer raised concerns that the Aramon was too large to berth at its onward customer’s preferred terminal (GES Amsterdam), and a series of communications followed by WhatsApp and email in which the parties discussed alternatives, including ship-to-ship discharge using barges. Seller confirmed that a smaller vessel was unavailable, but subsequently offered to arrange a logistical solution for discharge by barge.

Loading took place at Jubail on 24 October 2023, with an estimated arrival at the discharge port of around 17 November 2023. The Aramon was subsequently delayed, pushing its ETA at the discharge port to 27 November, three days after the end of the Delivery Dates. On 25 November 2023, Buyer purported to terminate the contract on the basis that Seller had not nominated a vessel capable of discharging within the Delivery Dates. Seller rejected that position and drew down the contract price of approximately US$11.4 million under the standby letter of credit on 4 December 2023, later selling the MTBE to a third party for a lower sum and returning the balance to Buyer after deducting costs of sale.

Buyer brought a claim against Seller in the High Court seeking restitution of the shortfall (approximately US$2.67 million) between the contract price paid and the sum returned, on the basis that the price had not become due (i.e. there had been a total failure of consideration), together with damages.

The Two Key Issues

The court was required to determine whether Buyer had been entitled to terminate on either of two grounds: first, that Seller had committed a repudiatory breach because the vessel did not arrive at the discharge port within the Delivery Dates (the “delivery dates issue”); and second, whether Buyer had validly rejected Seller’s vessel nomination (the “nomination issue”).

The Delivery Dates Issue

A central question was whether the amendment from DES to CIF altered the nature of the parties’ obligations with respect to the Delivery Dates.

As a reminder, the BP GTCs provide that:

• In a DES contract (Part 3), delivery takes place at the discharge port, and the seller’s vessel must tender a notice of readiness (“NOR”) there within any agreed “laydays”.
• Under CIF contracts (Part 2), delivery takes place when the product is placed on board the vessel at the loading port. Crucially, Section 11 of the BP GTCs provides that:
• If the contract contains “laydays” (i.e. a date/range of dates within which the Seller’s vessel must tender NOR at the loading port), and Seller provides Buyer with an express or implied indication of the date/range of dates within which the vessel will arrive at the discharge port, those discharge port dates will be indicative only. Therefore, in a CIF contract that contains loading port laydays, the only impact of Seller agreeing or indicating discharge dates is on the calculation of laytime and demurrage (which will vary depending on whether the vessel arrives at the discharge port before, within or after the indicative discharge dates, in accordance with Section 16.4). The discharge port dates will not be treated as a guarantee of the timing of the vessel’s arrival or of discharge, and the only consequence of the vessel arriving after the end of the indicative discharge port dates will be in terms of demurrage (i.e. that running hours will commence berth or no berth at NOR + 36 hours or on commencement of discharge, whichever is the earlier).
• If, as is often the case in a CIF contract, the contract does not contain loading port “laydays”, and Seller provides Buyer with an express or implied indication of the date/range of dates within which the vessel will arrive at the discharge port, those dates will be treated as indicative only. Again, there is no guarantee that the vessel will arrive at the discharge port or discharge within those dates. However, where there are no agreed loading port “laydays”, Seller’s obligation is to ensure the vessel tenders NOR at the loading port at a time consistent with arrival at the discharge port within the indicative discharge dates, “given a reasonable assessment of customary loading and voyage time”. Laytime and demurrage will be calculated depending on whether the vessel arrives before, within or after the indicative discharge dates, in accordance with Section 16.4.

Seller advanced two arguments. Its primary case, that the Delivery Dates should be reinterpreted as loading dates following the amendment of the contract to switch from a DES to a CIF delivery basis, was rejected by the court as lacking commercial sense. Prior to the amendment, the Delivery Dates had plainly referred to arrival at the discharge port (i.e. “Delivery dates: 10 – 24 November 2023”); reinterpreting them as loading dates in the Persian Gulf (weeks earlier) would have fundamentally altered the timing of contractual performance in a falling market and undermined the basis on which the price had been agreed, with no explanation or justification. 

Seller’s alternative case succeeded. The court held that the amendment to CIF terms engaged the CIF terms of the BP GTCs, including Section 11.3, with the result that the Delivery Dates became indicative only.

The court therefore determined that there were no loading port laydays and only indicative Delivery Dates. The question was then whether the Seller had complied with its obligations under Section 11.3 of the BP GTCs to tender NOR at the loading port at a time consistent with the vessel’s arrival at the discharge port within the Delivery Dates, given a reasonable assessment of customary loading and voyage time. As a matter of fact, the Court determined that Seller had complied with its obligation under section 11.3, and Buyer’s purported termination was not justified on this ground.

The Nomination Issue

The court’s analysis of section 14.6 of the BP GTCs, which governs vessel nomination and rejection, is of wider significance to market practice under these widely-used standard terms. Although Section 14.6 applies to CIF contracts, the same analysis would in our view apply to Section 21.5 in the context of DES and DAP contracts.

The parties disagreed as to how sections 14.6.1, 14.6.2, and 14.6.3 interact. Buyer argued that each sub-section confers a separate and standalone right of rejection, such that a buyer who fails to reject a vessel nomination within one business day under section 14.6.1 may still refuse to accept the vessel “on any reasonable grounds” under section 14.6.2 at any time before property passes. Seller contended that section 14.6.2 merely sets out the grounds on which a rejection under section 14.6.1 may be exercised, so that a buyer who fails to act within one business day is deemed to have accepted the vessel; section 14.6.3 then provides an additional right of rejection only where new information subsequently emerges.

The court preferred Seller’s construction, for four principal reasons. First, on Buyer’s reading, section 14.6.1 would be strangely silent on the grounds for rejection, requiring implication of a reasonableness requirement that had been expressly stated in sections 14.6.2 and 14.6.3 but conspicuously absent from 14.6.1. Second, Seller’s interpretation promoted commercial certainty: a buyer wishing to reject must act promptly, enabling both parties to know their position quickly in a fast-moving market. Third, the one-business-day limit aligned with the parallel obligation to nominate a discharge terminal under section 14.4, creating a coherent and orderly framework for resolving both vessel acceptability and discharge terminal questions simultaneously. Fourth, Buyer’s interpretation would produce overlapping and commercially unnecessary rights of rejection, undermining the clear time-limited structure that would otherwise apply.

Notably, the judge acknowledged the ambiguity in the current drafting and expressly invited the BP GTCs’ drafters to clarify the interaction of these sub-sections in future revisions, a pointed judicial observation on widely-used industry-standard terms.

Applying those principles to the facts: Seller properly nominated the Aramon by email on 5 October 2023, accompanied by the vessel’s particulars including its dimensions. The court made clear that Buyer’s WhatsApp messages on 6 October 2023 could not constitute a valid notice of rejection of a vessel, as section 70(4) of the BP GTCs expressly prohibits contractual notices by instant messaging. 

Buyer’s email on 6 October 2023 (“Our customer is still checking the vessel but it will be very difficult to get a LR [long-range] discharged”) was not sufficiently unequivocal to amount to a rejection: it expressly contemplated the possibility that the Aramon might prove acceptable and indicated only that the parties would need to discuss the method of discharge. 

The right to reject therefore lapsed at the end of the business day following Buyer’s receipt of the vessel nomination (under Section 14.6.1 of the BP GTCs). In the absence of an express rejection by Buyer, Buyer was deemed to have accepted the vessel.  

The court dismissed Buyer’s argument that it could have (under Section 14.6.2 of the BP GTCs) rejected the vessel on any reasonable grounds after the one business day had expired, but prior to the passing of property.

That was sufficient to resolve the nomination issue against Buyer.

Having clarified that the Buyer’s rejection of a vessel within one business day must be on a “reasonable ground”, the judge provided some guidance as to what a “reasonable ground” might be. First, reasonableness is an objective standard i.e. the ground for rejection must be one that a reasonable Buyer would consider sufficient reason for rejecting the vessel in the circumstances existing at the time of rejection. For example, a lack of availability anywhere at the discharge port for the vessel to berth safely due to its size would be a reasonable ground for rejection. On the other hand, if the discharge port has multiple berths, and the vast majority of those berths would accommodate the vessel, the fact that the vessel is too large for one berth that the Buyer wished to use would not be a reasonable ground for rejection. In between those two extremes, whether or not a vessel will fit at the terminal that the Buyer wishes to use is a matter of degree, having regard to the size of the vessel, the available berths/terminals at the discharge port, the nature of the constraint, and perhaps also the expense and delay involved in undertaking delivery using the nominated vessel (e.g. by discharging into lighters or by ship-to-ship transfer). 

Key Takeaways

Amending delivery terms requires care.  There is no bar to departing from the usual attributes of a CIF contract, including by imposing an obligation to effect complete delivery at destination by a specified date (i.e. a “hybrid” contract). However, a bare switch from DES to CIF carries full and far-reaching consequences under the BP GTCs, including the conversion of firm arrival dates (DES) into indicative discharge dates only (CIF). Parties who wish to preserve specific obligations, such as a binding arrival window, when amending the delivery basis must say so expressly.

Vessel rejection must be prompt, unequivocal, and by a permitted means.  The court’s construction of Section 14.6 places a premium on timely, clear action. Buyers who receive a vessel nomination and have concerns about suitability must reject the vessel on reasonable grounds by email (not instant messaging) within one business day of receiving the nomination. A failure to do so will be treated as acceptance, extinguishing the right to reject except where genuinely new information arises under section 14.6.3. Tentative expressions of concern or an invitation to discuss alternatives will not suffice.

A seller’s re-nomination with an adequate discharge solution may extinguish the buyer’s right to reject.  Even where an initial rejection is valid, a seller who re-nominates the same vessel on terms that adequately address the original grounds of rejection, such as by offering to arrange and pay for discharge by way of lighters, places the buyer in a position where it can no longer rely on those same grounds. Buyers should therefore consider carefully whether, and on what terms, they are willing to engage in discussions about discharge alternatives following a vessel rejection.