Dear all,

The Court of Appeal of England and Wales today delivered an
interesting judgment concerning the measure of damages in a claim for
deceit in OMV Petrom SA v Glencore International AG [2016] EWCA Civ
778.

http://www.bailii.org/ew/cases/EWCA/Civ/2016/778.html

In this case, Glencore sold crude oil to the Plaintiff, which it
falsely represented to be of various classes of crude oil, well known
in the oil industry.

In fact, the oil sold was a blend designed to mimic the yield and
other characteristics of the classes of crude concerned but which was
cheaper for Glencore to acquire and blend.

Among the questions considered by the CA was whether the judge had
been correct to award damages, being the difference between the price
paid by the Plaintiff for the oil it purchased, believing that oil to
be of the class concerned and the discount which the Plaintiff would
have sought had it known the oil to be an untried and unknown blend.
Glencore argued that the Court should instead assess damages on the
basis of comparative yield. The Court (surely correctly) rejected that
analysis.

The Court also considered whether subsequent information should be
taken into account in considering the damages to be awarded. That
arose because one of the reasons why an untried blend could be sold
only at a discount was and is the risk of damage to an oil refinery
which it causes and/or the time taken to set up the refinery to
process the blend at optimal efficiency.

Glencore argued that the yield from the blend had in fact been as good
as yield from oil of the various classes which the Plaintiff believed
it was buying would have been and that no problems had been caused to
the Plaintiff's oil refinery. Again correctly in my view, the Court
rejects that argument. I say correctly, since for me, it lies not in
the mouth of a fraudster to say that 'it came out allright in the end
and I should have the benefit of that', having put the innocent party
to the risk concerned.

The facts of the case are also interesting.

Kind regards

Ger