The Commercial Court handed down judgment on 13 January 2026 in Moeve Trading S.A.U. (Formerly CEPSA TRADING SAU) v Mael Trading FZ LLC [2026] EWHC 17 (Comm).
The Seller sold gasoline and gasoil to the Buyer on FOB terms, with title passing on shipment. Although the original bills of lading remained with the Seller, the cargo was discharged to the Buyer or its order, save a portion said to have been liened by the shipowner for unpaid demurrage. The Buyer never rejected the cargo.
The Buyer was required to open letters of credit to cover the contract price of c. US$13m. The bank refused to pay on the Seller’s presentation of documents. The Court was not asked to determine whether the Seller’s presentation was compliant: [30].
The Seller applied for summary judgment for the unpaid price. The Buyer resisted on the basis that the letters of credit had discharged its payment obligation.
Peter MacDonald Eggers KC (sitting as a Deputy Judge of the High Court) reviewed several English and Australian authorities requiring “careful consideration”: [67]. The Judge also considered the statement in Benjamin’s Sale of Goods (12th ed, 2023) at [23-263] that “[a] seller that fails to make a complying presentation has no right to require payment instead from the buyer”. The Judge noted at [94] that authority cited for that statement “was not concerned with a case where the buyer in fact received the goods and obtained title to them”.
The Judge distilled the following principles at [102]:
- “The letter of credit will normally operate as a conditional payment, rather than as an absolute payment (or no payment at all).”
- If the letter of credit is conditional payment and the bank’s refusal to pay is “unrelated to the seller’s own fault or responsibility”, the seller may claim the price or damages from the buyer.
- If the letter of credit is conditional payment and “the seller is responsible” for its failure, the seller has no recourse against the buyer where “title to the goods has not passed … and the buyer is entitled to, and does, reject the documents and goods”. But if the buyer “has accepted the goods” and “title … has passed”, the seller “is entitled to be paid the price of the goods by the buyer”.
Applying those principles, the Judge found that the Buyer had no real prospect of defending the claim for the price under s.49 of the Sale of Goods Act 1979, including for the cargo said to have been liened by the shipowner: [105].
The full judgment can be found here.
Claire Blanchard KC and Sebastian Mellab appeared for the Seller, instructed by William Gidman, Paolo Ghirardani and Miranda Stock of Holman Fenwick Willan LLP.
