We were asked to comment on issues raised by instructing solicitors on a matter involving a cargo of gasoil for delivery into Ghana, and give an opinion of the value of the gasoil cargo of oil on board the vessel at the time of receiving instructions.
In August 2013 a vessel loaded gasoil in the US and sailed to Ghana for delivery for a prearranged sales contract. When the vessel reached the port in September, the oil was tested and found to be off specification on colour, water content and sulphur. As a result the original buyer refused to take the cargo. There was an issue on the finance arrangements with an alternative buyer which substantially delayed the replacement sale, and in November the owner of the vessel served notice to the owner of the cargo to arrest the ship. In January 2014 the owner of the vessel sought permission to sell the cargo on board through the Ghanaian courts and obtained an order for the sale of the cargo.
Valuing off specification cargoes is not an exact science as such cargoes are not routinely traded. In addition, because they tend to occur as a result of some problem, any sale tends to be made in a climate of concern and urgency which can make the sale a distressed sale with the seller at the mercy of buyers. Furthermore, based on the information provided to us, we suspected that the cargo on board the vessel was a waste oil, possibly waste lubes, and was therefore even less attractive to buyers.