Socar Trading SA v City Trade and Investment SA [2026] EWHC 1240 (Comm)

[2026] EWHC 1240 (Comm)Case No LM-2025-000096
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 26/05/2026
Before
RECORDER JANET BIGNELL KCSitting as a Judge of the High Court
Between
SOCAR TRADING SAClaimantCITY TRADE AND INVESTMENT SADefendant
Oliver Caplin KC and Lukas Swyton (instructed by Stephenson Harwood LLP) for ClaimantNo appearance for DefendantHearing Hearing dates: 19 May 2026
Approved JudgmentThis judgment was handed down remotely at 10.30am on 26 May 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................RECORDER JANET BIGNELL KC
[1]The Claimant, Socar Trading SA (“Socar”), as Seller, claims market loss damages of USD $3,025,202 from the Defendant, City Trade and Investment SA (“City”), as Buyer, arising from City’s alleged breach (through non acceptance) of two contracts for the sale of ultra low sulphur diesel (“ULSD”) concluded between the companies. The claim turns on the true interpretation of the terms of each of the two contracts.[2]At trial, Socar was represented by Oliver Caplin KC and Lukas Swyton. I thank Counsel for their helpful Skeleton Argument and for their respective oral submissions. City’s Absence at Trial[3]City did not attend the trial and was not represented. In my extempore judgment at the outset of the trial in response to Socar’s application under CPR 6.28 with regard to the trial bundle and the service of its Skeleton Argument, I set out the chronology and circumstances in which City has unilaterally and voluntarily disengaged from the trial process since mid-April 2026.[4]City was represented by its former solicitors, DHM Stallard (“DHM”), and Leading and Junior Counsel, when all relevant directions for trial were made and when the trial was listed on 16 June 2025 to begin in court today, 19 May 2026. Until 14 April 2026, when HHJ Bird granted the application made by DHM to come off the court record, City was actively engaged in defending Socar’s claim. City served a Defence dated 27 November 2024, Responses to Requests for Further Information, was represented at the CCMC on 2 May 2025, and served the Witness Statement dated 8 October 2025 of Mr Zafar Ӧzcan, its sole director, for example.[5]Since DHM has come off the court record, City has not instructed any replacement solicitors. It has also failed to comply with its obligation to supply an address for service within the jurisdiction. Neither City, nor Mr Ӧzcan, nor any other representative of, or on behalf of, City has communicated with the court in respect of this trial and the hearing today. There has also been no contact with the Claimant’s solicitors, Stephenson Harwood LLP, in response to the emails they have sent to Mr Ӧzcan, at the address provided by DMH in its final correspondence, regarding final pre-trial preparations.[6]In preparing for this hearing, I have read City’s Defence and its Responses to the Request for Further Information settled by Leading Counsel in addition to those documents set out in the Claimant’s Reading List for trial. The Claimant’s Reading list had included Mr Ӧzcan’s Witness Statement and the correspondence to which reference was made there. City did not serve any Expert Report in November 2025 in accordance with directions for such Reports. The Background and the Contracts[7]Socar had the benefit of various storage tanks at the ports of Mersin and Samsun in Turkey via a storage agreement with Altinbas Petrol VE Ticaret AS (“Alpet”). Socar would bring in cargoes of ULSD into the tanks it had hired from Alpet. It is from those tanks that it could then deliver, via inter tank transfers (ITT), cargoes to buyers like City. The Contracts[8]The two contracts made between Socar and City were concluded via email in the form of deal recaps. The terms of the first contract, the “Mersin Contract”, are contained across a deal recap sent by Ugur Hekimoglu of Socar on 27 December 2019 accepted by Mr Ӧzcan of City on 31 December 2019. The terms of the second contract, known as the “Samsun Contract”, are contained across a deal recap sent by Ugur Hekimoglu of Socar on 20 January 2020 accepted by Helena Verdel of City on 21 January 2020.[9]Under the Mersin contract concluded on or around 31 December 2019, Socar agreed to sell a test parcel of 15kt (+/- 10% at City’s option) of ULSD on an ITT basis at the Mersin Alpet Terminal basis to City. The terms were stated as follows: “Product: ULSD 10 PPM TURKISH SPECS Quantity: 15Kt +/- 10% B.O. Delivery: ITT MERSIN ALPET TERMINAL WITHIN 30 DAYS AFTER cod OF THE UNDERLYING CARGO DELIVERY AT M-1 (M = Month of ITT delivery). Delivery Period: 1-31 January 2020 AS FIRST START UP TRIAL CARGO AND THEREAFTER, THE DELIVERIES SHALL BE EXTENDED TILL 31.12.2020 PRICE: H CIF MED PLATTS EURPEAN MARKETSCAN UNDER HEADING CIF MED GENOA/LAVERA FOR ULSD 10PPM + $14.00 Usd/Kt Pricing: 2/3 OF PRICING MONTHLY AVERAGE + 1/3 ON TRIGGER BASIS WITHIN 30 DAYS AFTER COD (OR LATEST WITHIN 5 WORKING DAYS AFTER EACH ITT) Payment: 60 days after each ITT against provisional invoice, ITT certificate and bank release letter to terminal operator ALPET Up to 11mill usd, buyers benefit from open account provided payment terms do not exceed 60 days after ITT for each respective take over and related invoice with 10 pct prepayment Special: - Buyers commit to perform for take over entire qty as agreed within ops limites. In the event, for any comprehensive reason beyond buyers' control, buyers remain short with the takeover of min required ITT qty, then such unlifted qty shall be moved to the next delivery month and shall be cumulatively performed. As per FIFO method, by second month, first this unlifted parcel shall be prices and taken over. Any incremental cost due to such roll over, such as insurance, storage, finance and hedge costs, shall be born to buyer as additional premium, in reference to such parcel quantity.

Special: -

[10]Under the Samsun Contract concluded on or around 21 January 2020, Socar agreed to sell to City 10Kt (+/- 10% at City’s option) of ULSD on an in tank transfer at the Samsun Alpet Terminal basis. The terms were materially similar to the Mersin Contract subject to differences in respect of the period, price and pricing. The terms were as follows:
“Product: ULSD 10 PPM TURKISH SPECS Quantity: 10Kt +/- 10% B.O Delivery: ITT SAMSUN ALPET TERMINAL WITHIN 30 DAYS AFTER cod OF THE UNDERLYING CARGO DELIVERY AT M-1 (M = Month of ITT delivery) Delivery period: 1-29 FEBRUARY 2020 AS FIRST START UP TRIAL CARGO AND THEREAFTER, THE DELIVERIES SHALL BE EXTENDED TILL 31.12.2020 Price: H CIF MED PLATTS EURPEAN MARKETSCAN UNDER HEADING CIF MED GENOA/LAVERA FOR ULSD 10 PPM + $22.00 USD/KT… Pricing: 6000 KTONS MIN/MAX BASED ON MONTHLY AVERAGE + BALANCE UPTO 4000 KTONS ON TRIGGER BASIS FOR FULL REMAINING PARCEL WITHIN 40 DAYS AFTER COD (EACH ITT TO BE PRICED LATEST WITHIN 10 WORKING DAYS AFTER EACH ITT DATE) Payment: 60 days after each ITT against provisional invoice, ITT certificate and bank release letter to terminal operator ALPET Special: - Buyers commit to perform for take over entire qty as agreed within ops limites. In the event, for any comprehensive reason beyond buyers control, buyers remain short with the take over of min required ITT qty, then such unlifted qty shall be moved to next delivery month and shall be cumulatively performed. As per FIFO method, by second month, first this unlifted parcel shall be prices and taken over. Any incremental cost due to such roll over, such as insurance, storage, finance and hedge costs, shall be born to buyer as additional premium, in reference to such parcel quantity.”

Quantity: 10Kt +/- 10% B.O

[11]There is no dispute that each Contract was intended by the parties to operate as a single test delivery of ULSD as expressly stated. There was no obligation to do so, but, if the trial deliveries were deemed to be a success, the parties would then have the option to extend the respective deals to a 12-month term contract should they wish.[12]As recorded, the price of the ULSD under each Contract was to be calculated by a combination of a temporally variable component priced from a market index and a fixed premium:(1) the high monthly quotations for ULSD 10ppm for CIF Med Genoa/Lavera in the Platts European Marketscan publication (“Platts”) and(2) a premium of US$ 14pkt for the Mersin Contract and US$22mpt for the Samsun Contract.[13]For the Platts derived components of the ULSD price: i) for the Mersin Contract, 2/3 of the 15Kt parcel, that is 10Kt, was to be priced off the monthly average of the quotations for the delivery month, January 2020. The rest was to be the subject of a trigger that City was to pull within 30 days of a bulk ULSD delivery to Socar at the Mersin Terminal, or at the latest within 5 days of an actual inter-terminal transfer by Socar to City; ii) for the Samsun Contract, the same approach was to be applied, with 6Kt of the 10Kt parcel being priced on the basis of monthly averages for February 2020 and the remaining 4Kt on the basis of a trigger, to be pulled either within 40 days of a bulk ULSD delivery to Socar at the Samsun Terminal, or within 10 days of an applicable inter terminal transfer from Socar to City.[14]Socar’s case also relies upon the operation of the final “Special” provision in each Contract, as discussed below. It was City’s case that the “Special” provisions did not apply to the trial and would only have been relevant if a long term contract had resulted. Performance of the Contracts[15]Ms Gunel Mammadova, a broker employed by Socar, attended to give (unchallenged) evidence at trial as set out in her Witness Statement dated 7 October 2025. She explained how the Contracts were operated in practice. City would notify Socar how much product under either Contract it wished to take delivery of at any particular time. Socar and City, through their traders, would agree an ITT release date for the ULSD, as well as the precise quantity and the pricing date if City wanted to take a portion of the ULSD for which it was entitled to pull the “trigger” as opposed to the pre-priced monthly average portion of the ULSD.[16]Once the traders had agreed the terms of a ULSD ITT, the operations and finance teams would take over. Socar would make sure that either pre-payment had been made, or payment security arranged, before authorising and ITT to take place. Socar would initiate all the practical quality inspection and customs formalities.[17]It is common ground on the statements of case that City accepted only the following ITT deliveries of ULSD under the Mersin Contract, for which it paid Socar in full: Delivery Date Quantity Price 1st Mersin Delivery 23 January 2020 1,000kt January average 2nd Mersin Delivery 3 February 2020 500kt Trigger 3rd Mersin Delivery 13 February 2020 500kt Trigger 4th Mersin Delivery 18 February 2020 500kt Trigger 5th Mersin Delivery 26 February 2020 500kt Trigger 6th Mersin Delivery 3 March 2020 500kt Trigger 7th Mersin Delivery 10 March 2020 500kt Trigger[18]As such, City, at its request, took delivery of a total of 4,500kt of ULSD under the Mersin Contract. Only the single delivery of 1,000kt in the month of January 2020 was priced on the January average basis.[19]Socar chased City in correspondence from the end of January, through February, and into March 2020 as to its intentions. On 26 February 2020, Mr Ӧzcan emailed Mr Hekimoglu saying the Mersin Contract was “out of market realities and over priced”.[20]On 28 February 2020, Mr Hekimoglu replied that City was under an obligation to lift the outstanding ULSD amounts under the Mersin Contract and the Samsum Contract and asked City to perform.[21]It is common ground on the statements of case that City accepted only the following ITT deliveries of ULSD under the Samsun Contract, for which it paid Socar in full: 1st Samsun Delivery 7 February 2020 1000kt February Average 2nd Samsun Delivery 19 February 2020 500kt February Average 3rd Samsun Delivery 20 February 2020 500kt February Average 4th Samsun Delivery 17 March 2020 1000kt February Average 5th Samsun Delivery 27 March 2020 1000kt February Average 6th Samsun Delivery 20 April 2020 500kt February Average[22]As such, City, at its request, took delivery of a total of 4,500kt of ULSD, all priced on the February Average basis.[23]On 3 March 2020, Socar sent a Notice of Default to City in respect of both the Mersin Contract and the Samsun Contract. Socar alleged City had been required to take full delivery in January 2020 under the Mersin Contract and in February 2020 under the Samsun Contract and that City was in breach of contract by having failed to do so. Socar called upon City to perform by taking full delivery under both Contracts by 9 March 2020.[24]City continued to take portions of ULSD under each Contract as set out in the tables above. No long term contract was ever concluded.[25]Socar served notice stating that it terminated the Mersin Contract and the Samsun Contract on 15 September 2020. Socar’s Case The Mersin Contract[26]It is Socar’s case that under the Mersin Contract City was obliged to accept delivery of at least 13,500kt of ULSD of the 15Kt test parcel to be delivered between 1 and 31 January 2020. The express margin of plus or minus 10% on the 15,000Kt was at the Buyer’s Option. Socar had to be ready to provide up to 16,500Kt in January 2020 if City required, but City was able to take only 13,500Kt if it so chose. Of the 13,500kt quantity, 9,000kt (2/3) was to be priced on the Platts January averages plus the premium stated, and 4,500kt (1/3) was to be priced on a trigger basis plus the premium stated.[27]If City was not able to take the entire quantity of ULSD in January 2020, as indicated at paragraph 14 above, Socar says City enjoyed the contractual right to take advantage of the “Special” term which allowed it to rollover any quantity it had not accepted and paid for to the following month (“Rollover”). Under the Mersin Contract, from January 2020 to February 2020. However, if City did not accept and pay for all the rolled over quantity of ULSD by the end of February 2020, by that stage City would be in repudiatory breach of the Mersin Contract, entitling Socar to terminate.[28]The price of any quantity of ULSD “rolled over” was to be on a first in and first out basis and City was to be liable to Socar for any associated increased costs, including interest, storage or hedging costs. The intent being that Socar should not be prejudiced by the consequences of any Rollover by City.[29]Applying its interpretation of the contractual framework to City’s actual performance, Socar says that the only parcel of ULSD that City took within the originally intended test delivery month of January 2020 was the 1,000kt priced on January averages. City then took advantage of the Rollover provisions to take the four deliveries it took in February 2020 on the trigger basis (when Socar says the market was falling and the price was favourable to City). In breach of contract, City therefore failed to accept delivery of, and pay for, the entire outstanding balance of the 13,500kt of ULSD which had to have been taken and paid for by 29 February 2020.[30]Accordingly, by the time City took the two further small deliveries in March 2020, Socar says City was already in breach of its obligations because only one Rollover was permitted and that had elapsed. These deliveries took place before Socar had terminated the Mersin Contract and at a time when City was showing conduct consistent with an intention to cure the breach.[31]At the date of the final delivery on 10 March 2020, Socar says City had therefore failed to take and pay for 8,000kt of the ULSD, all of which had to be priced under the Mersin Contract on the basis of the January 2020 average dates. That is the minimum contractual amount of 13,500kt less the 1,000kt taken by City on the January average price less the 4,500kt taken by City on trigger pricing. Socar claims this led to a resultant market loss to it of $2,312,640 US dollars. The Samsun Contact[32]Socar’s case with respect to the Samsun Contract is that at a minimum City was obliged to accept delivery of and pay for 9,000kt of the 10kt test parcel of ULSD to be delivered between 1 and 29 February 2020, subject only to the effect of the “Special” Rollover provision which entitled City to spread the obligation to take delivery of and pay for a parcel of ULSD in February 2020 into March 2020. Of this quantity, 6,000kt (2/3) was to be priced on the Platts February averages plus the premium stated, and 3,000kt (1/3) was to be priced on a trigger basis plus the premium stated.[33]If City did not accept and pay for all the rolled over quantity of ULSD by the end of March 2020, by that stage City would be in repudiatory breach of the Samsun Contract, entitling Socar to terminate.[34]In breach of that obligation, Socar says City failed to take delivery of and pay for, 9,000kt of ULSD under the Samsun Contract by the end of March 2020.[35]Accordingly, by the time City took the small April 2020 delivery, Socar says City was in breach of its obligations because only one Rollover was permitted and that had elapsed. Socar says this delivery took place before Socar had terminated the Samsun Contract and represented an attempt by City to cure the breach.[36]By the time of the final delivery on 20 April 2020, Socar therefore claims City had failed to take and pay for 4,500kt of ULSD. Of that amount, 1,500kt was left to be priced on the February average prices, that is 6,000kt less 4,500kt, and the balance of 3,000kt was to be priced on the trigger basis.[37]Socar claims that City’s breach of the Samsun Contract resulted in a market loss to it of $712,562 US dollars. City’s Pleaded Defence[38]City’s pleaded Defence was that it was not in breach of either Contract. The Mersin Contract[39]City’s case was that it was not obliged to accept delivery of, and pay for, any minimum quantity of ULSD delivered to it by Socar pursuant to the Mersin Contract. The Mersin Contract was a trial only, under which Socar would endeavour to deliver 15kt of ULSD +/- 10%, and City would pay for as much ULSD as it was able to lift. City was only obliged to pay for the ULSD which it had lifted, and it did so.[40]City pleaded it was not obliged to take any further delivery of ULSD beyond the end of the trial period in January 2020. On the proper construction of the Mersin Contract, City said the Rollover provisions did not operate because the provision did not apply in circumstances where the Contract did not extend beyond the trial period. Alternatively, a term was to be implied to that effect to give business efficacy to the trial that the parties had agreed to carry out. It was inconsistent with the purpose of the trial to require City to pay for ULSD it had not been able to lift.[41]If, contrary to its primary position, City was in breach of the Mersin Contract, City pleaded that it was for Socar to prove(i) the relevant date for the assessment of any market loss damages, and(ii) the value of the ULSD at such date. The Samsun Contract[42]City pleaded that under the Samsun Contract it was not obliged to accept delivery of, and pay for, any minimum quantity of ULSD delivered to it by Socar. The Samsun Contract was a trial only, under which Socar would endeavour to deliver 10Kt of ULSD +/- 10%, and City would pay for as much ULSD as it was able to lift. It did pay for the ULSD that it did lift.[43]City’s case was that it was not obliged to take any further delivery of ULSD beyond the end of the trial period in January 2020. On the proper construction of the Samsun Contract, the Rollover provisions did not operate because the provision did not apply in circumstances where the contract did not extend beyond the trial period. Alternatively, a term was to be implied to that effect to give business efficacy to the trial that the parties had agreed to carry out. It was inconsistent with the purpose of the trial to require City to pay for ULSD it had not been able to lift.[44]If, contrary to its primary position, City was in breach of the Samsun Contract, City pleaded that it was for Socar to prove(i) the relevant date for the assessment of any market loss damages, and(ii) the value of the ULSD at such date. Socar’s Submissions on Interpretation[45]Socar’s substantive submissions on liability are identical in the case of each Contract. That is that the Contracts are clear that City was primarily obliged to take and pay for at least 13,500kt of ULSD under the Mersin Contract by the end of January 2020 and 9,000kt of ULSD under the Samsun Contract by the of February 2020 respectively. City was afforded the opportunity through the Rollover provisions to “shift” some of the 13,500kt to February 2020 under the Mersin Contract and some of the 9,000kt of ULSD to March 2020 under the Samsun Contract without being in breach of its acceptance and payment obligations. Otherwise, it was in breach of contract.[46]Socar’s Counsel describe City’s defence as “hopeless” that it was only obliged to accept and pay for as much of the 15,000Kt under the Mersin Contract as it could during January 2020, and that anything it could not accept by 31 January was to be simply washed out. They say the position is no different and “equally wrong” in respect of its defence that it was only obliged to accept and pay for as much of the 10,000kt under the Samsun Contract as it could during February 2020, and that anything it could not accept by the end of February was to be washed out.[47]Socar submits that there is no positive support for City’s defence in the language of the Contracts at all. In fact the language used in each of the Contracts militates against City’s argument. First, that if a wash out type agreement had been intended, there would be no need for City’s negative 10% tolerance option. The Contracts would have, on City’s hypothesis, already been for simply “as much of the 15,000kt as City could manage”. The tolerance in City's favour, which is intended to regulate the lower limit of what City had to take, would have been pointless. The proper way to read the Contracts is that, in the normal way, City was obliged to take the 15,000kt, subject only to the impact of the tolerance.[48]Secondly, even though the Rollover Provision in each Contract was no doubt intended to apply if the Contract had been extended to its full term, that does not mean the provision does not apply to the test month. The Rollover Provision is included in the Mersin Contract and the Samsun Contract and on its terms it applies in each case. Even if wrong, City would not be exculpated. Instead, City would have been in breach from the end of January 2020 under the Mersin Contract and from the end of February 2020 under the Samsun Contract rather than at the end of the respective Rollover months.[49]Thirdly, Socar submits that City’s construction is uncommercial. Socar submits it would be a rare thing for two commercial parties to contract on the basis that the buyer has no real obligation to take any of the product it has agreed to purchase. Its Counsel invited the court to be very slow in accepting any such interpretation in the absence of wording to support such an unusual deal, of which they say there is none. They add there is nothing in the documentary factual background to support such a construction. Discussion[50]It is necessary to construe the Contracts applying the usual general principles of construction. The principles set out in Wood v Capita Insurance Services Ltd [2017] UKSC 24, [2017] AC 1173 are summarised in Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2 at [29].[51]As explained by Lord Neuberger in Wood v Capita at [15]: “When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean”, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101, para 14. And it does so by focussing on the meaning of the relevant words … in their documentary, factual and commercial context. That meaning has to be assessed in the light of(i) the natural and ordinary meaning of the clause,(ii) any other relevant provisions of the [contract](iii) the overall purpose of the clause and the [contract](iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and(v) commercial common sense, but(vi) disregarding subjective evidence of any party's intentions. …”.[52]The following factors which Lord Neuberger emphasised in Wood v Capita at [17]-[20] are pertinent to the process of interpretation here. They are:
“17. First, the reliance placed in some cases on commercial common sense and surrounding circumstances (eg in Chartbrook [2009] AC 1101, paras 16-26) should not be invoked to undervalue the importance of the language of the provision which is to be construed. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract. And, again save perhaps in a very unusual case, the parties must have been specifically focussing on the issue covered by the provision when agreeing the wording of that provision. 18. Secondly, when it comes to considering the centrally relevant words to be interpreted, I accept that the less clear they are, or, to put it another way, the worse their drafting, the more ready the court can properly be to depart from their natural meaning. That is simply the obverse of the sensible proposition that the clearer the natural meaning the more difficult it is to justify departing from it. However, that does not justify the court embarking on an exercise of searching for, let alone constructing, drafting infelicities in order to facilitate a departure from the natural meaning. If there is a specific error in the drafting, it may often have no relevance to the issue of interpretation which the court has to resolve. 19. The third point I should mention is that commercial common sense is not to be invoked retrospectively. The mere fact that a contractual arrangement, if interpreted according to its natural language, has worked out badly, or even disastrously, for one of the parties is not a reason for departing from the natural language. Commercial common sense is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the contract was made. … 20. Fourthly, while commercial common sense is a very important factor to take into account when interpreting a contract, a court should be very slow to reject the natural meaning of a provision as correct simply because it appears to be a very imprudent term for one of the parties to have agreed, even ignoring the benefit of wisdom of hindsight. The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed. Experience shows that it is by no means unknown for people to enter into arrangements which are ill-advised, even ignoring the benefit of wisdom of hindsight, and it is not the function of a court when interpreting an agreement to relieve a party from the consequences of his imprudence or poor advice. Accordingly, when interpreting a contract a judge should avoid re-writing it in an attempt to assist an unwise party or to penalise an astute party.”
[53]As the case law makes clear, interpretation is a unitary exercise which then involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its implications and its consequences are investigated.[54]I have applied these principles to the interpretation of each of the Mersin Contract and the Samsun Contract separately. As I consider that the same conclusions result in the case of each Contract, I have not, however, repeated my conclusions Contract by Contract below.[55]It would be wrong to construe the words “Quantity: 15KT +/- 10% [Buyer’s Option] …. Delivery Period: 1-31 January 2020” and the words “Quantity: 10KT +/- 10% [Buyer’s Option] …. Delivery Period: 1-29 February 2020” in each of the two Contracts in any way other than to give them their full force and effect. In each Contract, the stated test delivery quantity, the precise scope of the Buyer’s Option to require more or to take less than that stated quantity, and the delivery period are clear and express. Where the parties have used unambiguous language, the Court must apply it: see Rainy Sky SA v Kookmin Bank [2011] UKSC 50 [2011] 1 WLR 2900 per Lord Clarke JSC at [23].[56]In each case this natural reading of the words used is an interpretation that a reasonable person with all the background knowledge which would have reasonably been available to the parties when they entered the Contract, would have understood the language used by the parties to mean. The entire purpose of each Contract was that the transaction would act as a test. The parties must have been specifically focussing on the issue covered by the provisions as to Quantity and Delivery Period when agreeing the wording of these provisions.[57]The Buyer’s Option was plainly intended to regulate between the parties the potential for City to require a greater or lesser amount of ULSD. Thus it was clearly in contemplation that the exact amount of 15,000kt or 10,000kt need not be purchased under the relevant Contract but an explicit bracket was placed upon the amount City was contractually obliged to accept and pay for. Indeed, this bracket was for the benefit of, and controlled by, City itself. That being so, the provisions are effective to exclude the suggestion that City could simply take such amount as it decided it wished to take without any obligation to purchase at all by way of test.[58]I agree with Socar that notwithstanding the Rollover provision was a valuable feature of any long term contract to 31 December 2020 that may have been concluded by the parties following the test, it was a provision that was nevertheless included in the Mersin Contract and in the Samsun Contract. Although I can see that it could be argued there was no “next delivery month” if the Contracts were not extended beyond the identified one month “Delivery Period”, the Rollover provision is capable of application to the trial cargo under each Contract. It was intended to operate to benefit City in circumstances where City would otherwise have been in breach of contract at the end of January 2020 and February 20202 respectively.[59]Interpreting each Contract as a whole the wording of the “Special” Rollover provision supports Socar’s primary case. The wording emphasises City’s basic contractual commitment to take the “Quantity” of ULSD as specified:
“Buyers commit to perform for take over entire qty as agreed within ops limites.”
The subsequent express reference to the “[minimum] required” can only be read as a further reference to the Buyer’s Option to take 10% less than the stated quantity: “In the event, for any comprehensive reason beyond buyers control, buyers remain short with the takeover of min required ITT qty, then such uplifted qty shall be moved …”.[60]The fact that it appears the each of the Mersin Contract and the Samsun Contract worked out badly for City is not a reason for departing from the natural language used in each Contract. Commercial common sense is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the relevant Contract was made. It is not considered retrospectively.[61]The application of commercial common sense as at the date that each of these Contracts was made supports Socar’s case. Each Contract provided for a trial in which Socar was required to buy and take delivery of the agreed maximum quantity of ULSD and to make that available to City in the Alpet tanks at Mersin or Samsun for City to take ITTs, within the scope of its Buyer’s Option, at a date or dates of its own choosing within the stated Delivery Period. If matters went well there was the prospect of extension for another 11 months to 31 December 2020, if both parties so agreed.[62]On performing an iterative check, I consider that the uncommercial consequences of City’s case that it had no contractual obligation to take any quantity of ULSD in the Delivery Period (or otherwise) mean that clear wording would have been required to be included in the Contracts to achieve such aim. The consequence of City’s pleaded case would have been to place Socar entirely at risk that, having performed its own part of the bargain, it could be left with the entirety of the quantity of ULSD that it had obtained for test delivery to City in its own tanks at the end of the trial period. There is no wording to support such a conclusion in the Contracts.[63]I also reject City’s alternative pleaded case that a term should be implied into each Contract to the effect that City was not obliged to take any further delivery of ULSD under the Mersin Contract after 31 January 2020 and under the Samsun Contract after 29 February 2020 because it was inconsistent with the purpose of the trial to require City to pay for ULSD it had not been able to lift.[64]Applying the test for the implication of terms set out in Marks & Spencer Plc v BNP Paribas [2015] UKSC 72, there are no grounds to suggest that such a term is so obvious that it goes without saying or that such a term is necessary to give either Contract business efficacy. The implication of such a term would conflict with the express terms of each Contract. In the light of the express contractual terms, commercial common sense as explained above, and on the basis of the facts known to both parties at the time each Contract was entered, no such term stands to be implied.[65]For these reasons, I find that: i) City breached the terms of the Mersin Contract by failing to accept and pay for by the end of February 2020 at the latest 8000kt of the 13,500kt it had agreed to buy under the Contract. The breach was repudiatory as City’s obligation to accept the goods was a condition, time being of the essence of the delivery obligations under a commercial contract of sale such as this; ii) City breached the terms of the Samsun Contract by failing to accept and pay for by the end of March 2020 at the latest 4500Kt of the 9,000Kt it had agreed to buy under the Contract. The breach was again repudiatory as City’s obligation to accept the goods was a condition, time being of the essence of the delivery obligations under a commercial contract of sale such as this.[66]Given City’s pleaded case that its obligations under the Mersin Contract came to an end on 31 January 2020 and its obligations under the Samsun Contract ended on 29 February 2020, it unsurprisingly took no point on the potential impact of the subsequent deliveries taken in the months following the Rollover month under each Contract. I accept Socar’s case regarding these deliveries on the basis of the contemporaneous correspondence and the notices Socar then served. That is that these deliveries properly fall to be classified as limited non-contractual performance. Quantum[67]As this is a non-acceptance claim, if there was an available market at Mersin and Samsun, which Socar says there is and which was accepted by City in its Response 3 to City’s Response to the Request for Further Information at or around the time of City’s breaches, the damages payable by City to Socar fall to be calculated in accordance with section 50 of the Sale of Goods Act 1979. That section provides as follows:
“50 Damages for non-acceptance. (1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for nonacceptance. (2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer’s breach of contract. (3) Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted or (if no time was fixed for acceptance) at the time of the refusal to accept.”
[68]Under the Mersin Contract, it was Socar’s pleaded case that the contract price for the undelivered Mersin quantities should be calculated on the basis of the January 2020 average Platts CIF Med High ULSD prices. It pleaded that for the market price the correct date for the assessment of damages is on or around 23 March 2020.[69]Under the Samsun Contract, it was Socar’s pleaded case that the contract price for 1,500kt of the undelivered Samsun quantities should be calculated based on the February 2020 average Platts CIF Med High ULSD prices. It pleaded that the market price of the remaining 3,000kt of the undelivered Samsun quantities which was subject to the trigger pricing should be(i) derived from the market price average across 2 March to 9 April 2020, and(ii) assuming that City would have triggered pricing for the 3,000kt in six equally spaced 500kt lots over that period. It pleaded that for the market price the correct date for the assessment of damages is on or around 30 April 2020.[70]City is, therefore, well aware of Socar’s case on quantum.[71]City’s own pleaded position was to the effect that the proper dates of the assessment of any market damages were all in June 2020. Its rationale was not explained, and no expert evidence was provided to support these dates.[72]The date of assessment is designed to replicate the innocent seller’s obligation to mitigate its loss. It therefore represents the date on which a reasonable seller in Socar’s position would have gone into the market to sell the ULSD that had not been accepted by the putative buyer.[73]I agree with Socar that, applying that logic here, the date of assessment falls to be ascertained on the facts as follows. Socar was in breach of the Mersin Contract from 1 March 2020. It should be afforded a hypothetical week or so from that date to take account of its position, City’s position, and decide whether or not to enter the market. However, beyond that, because City responded to Socar’s correspondence with late, non-contractual performance, until the 10th of March and took two more Mersin deliveries, that state of affairs also properly requires to be reflected.[74]In such circumstances, where the innocent seller has in effect postponed the time for acceptance, it would be reasonable for the hypothetical seller to defer beginning its consideration of the need to go to the market and resell the entirety of the yet to be accepted goods: see Benjamin’s Sale of Goods (12th Ed) at 16-075. Accordingly, and on the facts here, that time would instead come after it had become clear that City’s belated performance was at an end, and unlikely to continue.[75]In my judgment it is reasonable to take the date of 23 March 2020 as the date of assessment. That was 10 days after City's last acceptance and with nothing more in contemplation. It is at, or around, that date that the hypothetical seller in Socar’s position ought reasonably to have gone into the market.[76]Turning to the Samsun Contract, Socar was in breach from 1 April 2020. It should again be afforded a hypothetical week or so from that date to take account of its position, City’s position, and decide whether or not to enter the market. Given City’s late non-contractual performance extended to one final acceptance on 20 April 2020, it is reasonable to take the date of 30 April 2020 as the date of assessment.[77]Socar’s expert evidence concerning the quantum of the market losses claimed is contained in the report of Mr Ben Holt of Consilience Energy Advisory Group. Although legally represented at the date of receipt, City did not itself file any expert evidence. Furthermore, City did not provide any other form of written response or challenge to Mr Holt’s Report. Mr Holt’s report was, and is, therefore uncontested.[78]I have read Mr Holt’s Report in detail. I accept Mr Holt’s evidence and his endorsement of Socar’s approach for the detailed reasons that he explains.[79]In summary, that evidence is as follows in respect of the Mersin Contract: i) the contract price for 8,000kt of ULSD was US$588.58pkt based on the average of the relevant Platts prices across January 2020 (US$574.5795) plus the agreed premium of $14pkt. ii) the market value / price for the ULSD on 23 March 2020 was US$299.50pkt. That figure is calculated based on the Platts price (CIF Med High) for ULSD on that date, US$283.75, and a premium of US$15.75pkt. The premium selected by Mr Holt is supported by some further trades that City and Socar made for ULSD later in 2020 as explained by Mr Holt. These trades show the market premium for ULSD had increased by US$1.75pkt between December 2020 (when the Mersin Contract was concluded) and March 2020. iii) the market loss is the market price across the 8,000Kt of ULSD. The relevant calculation is US$588.58 less $299.50 multiplied by 8,000. This gives a total of US$2,312,636.[80]As regards the Samsun Contract, the calculation carried out by Mr Holt is a little more complicated as 1,500kt of the outstanding quantity of 4,500kt of ULSD falls to be calculated on the Platts averages whereas 3000kt of that quantity needs to be priced on a basis that takes account of City’s rights to trigger and how that right to trigger could have (counterfactually) influenced the contract price. In summary, Mr Holt’s evidence is as follows: i) the contract price for 1,500kt of ULSD was US$525.76pkt based on the average of the relevant Platts prices across February 2020 (US$503.7625) plus the agreed premium of $22pkt. ii) on the basis of use of the trigger option, in respect of which Mr Holt’s expert opinion is to the express effect that Socar’s assumption as to what City would have done, had it sought to perform the Contract, is reasonable, Mr Holt’s opinion is that the trigger pricing should be applied for the 3,000kt across six equally spaced 500kt lots between 2 March 2020 and 9 April 2020, when City ceased to perform. In Mr Holt’s view, spreading consignments in this way would have helped City to manage the market volatility present at that time. As a result, Mr Holt calculates the contract price for the 3000kt as US$353.39pkt comprised of an average Platts price for ULSD over that period of US$331.39pkt and the premium of US$22pkt. iii) the market price for the ULSD on 30 April 2020 was US$252.50 based on the Platts CIF Med High Price on that date of US$230.50kt and the contractual premium of US$22pkt. iv) the market loss is the market price across the 4,500Kt of ULSD on 30 April 2020. That is a total of US$712.558 as set out by Mr Holt in his Report.[81]As a result, in respect of City’s breach of: i) the Mersin Contract, I award Socar market loss damages of US$ 2,312,636. ii) the Samsun Contract, I award Socar market loss damages of US$712,558. Consequential Matters[82]At the conclusion of the hearing I was addressed by Mr Swyton on interest and costs in order to avoid the need for me to address these matters on paper or to hold a second hearing.[83]I award simple interest on the sums awarded to Socar under section 35A of the Senior Courts Act 1981 at a rate of 2.5% above US Dollar Prime Rate averaged over the period from the date of breach to the date of the hearing. The currency of the Contracts is United States dollars. I accept that the rate sought reflects Socar’s own ability to borrow money. On 19 May 2026, I notified Socar of my decisions with my written reasons to follow. The sum of the interest awarded is therefore: i) under the Mersin Contract, US$1,222,749.32; and ii) under the Samsun Contract US$373,017.79.[84]I order that City should pay Socar’s costs of the Claim. I also accede to Socar’s invitation that I should assess those costs summarily in this case. A detailed assessment is unlikely to be economic for Socar to pursue where City has disengaged from the proceedings.[85]The case was costs managed. At the hearing, I was given a set of updated and corrected figures to replace those set out in the Skeleton Argument. The costs I award are as follows: i) with respect to Socar’s incurred costs by the date of the Costs and Case Management Conference of £131,615.17, I summarily assess those costs at 75% on a standard basis. That is an award of £98,711.38 ii) with respect to Socar’s budgeted costs as at the date of the Costs and Case Management Conference of £440,540, Socar has in fact spent £251,156.09. I summarily assess those costs at 90% on a standard basis. That is an award of £226,040.48.[86]I therefore order that City is to pay Socar’s total costs assessed in the sum of £324,751.86.[87]Applying the Court’s power in CPR r44.2(6)(g), and in the light of the commentary in the White Book, I award interest on the costs I have awarded at the rate of the Bank of England’s base rate plus 2.5% from the date of payment out by Socar of any particular invoice. The Bank of England rate is the correct rate for interest on costs incurred in pounds sterling: Phones 4U Ltd (In Administration) v EE Ltd [2023] ERWHC 3378 (Ch) per Roth J at [4]. Having reviewed the calculations set out in Appendix 3 to Socar’s Skeleton Argument, as updated at the hearing to reflect a further bill paid by Socar, this award of interest totals £26,571.93.[88]Having considered the form of draft Order provided, I invited Socar’s Counsel to submit a revised draft to the Court. This was provided to me on the afternoon of 20 May 2025. The revised draft Order is approved.