Euro-Asian Oil SA (formerly Euro-Asian Oil AG) v Abilo (UK) Ltd and others; Euro-Asian Oil SA (formerly Euro-Asian Oil AG) v Credit Suisse AG

Contract – Breach of contract. The Commercial Court ruled on two claims brought by the claimant company, Euro-Asian, arising out of four transactions entered into with the first defendant company in the first claim, Abilo. Euro-Asian contended that it had paid for ultra-low sulphur diesel (ULSD) under a 'fourth sale contract', but had not received any product. The defendant in the second claim, Credit Suisse, had financed Abilo's purchases of the ULSD by letters of credit, and Abilo had then on-sold to Euro-Asian. Credit Suisse had also co-signed letters of indemnity with Abilo, which were presented, in lieu of the bills of lading, to Euro-Asian's banks under the letters of credit which those banks had opened for Euro-Asian to pay for the purchases of the ULSD from Abilo. The court held that both Abilo and Credit Suisse were liable for breach of warranties in the letter of indemnity, and that Credit Suisse was entitled to an 80% contribution from Abilo for the damages it had to pay to Euro-Asian. The court further ruled in favour of Euro-Asian, against Abilo, in respect of a claim based on the fourth contract of sale. However, it held that Euro-Asian had not proved its case in deceit against Abilo and the second defendant in the first claim.

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