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Toyomenka Pacific Petroleum, Inc. v. Hess Oil Virgin Islands Corp.

United States District Court for the Southern District of New York

July 23, 1991, Decided ; July 24, 1991, Filed

No. 90 Civ. 3720 (MGC)

Opinion

 [*64] AMENDED OPINION AND ORDER

MIRIAM GOLDMAN CEDARBAUM, UNITED STATES DISTRICT JUDGE

Plaintiff Toyomenka Pacific Petroleum, Inc. ("Toyomenka") is a California corporation. Defendant Hess Oil Virgin Islands Corp. ("Hess") is a U.S. Virgin Islands corporation. Toyomenka brings this diversity action to recover demurrage for Hess's delay in taking delivery of a cargo under a contract for the sale of crude oil. Both parties have moved for summary judgment. Because the material facts are not in dispute and I conclude that Hess's delay is excused by the force majeure clause of the contract, Hess's motion for summary judgment is granted and Toyomenka's motion is denied.

FACTS

The following facts are undisputed except where noted.

Hess owns an oil refinery on St. Croix with a terminal for receiving crude oil. On September 11, 1989, Toyomenka contracted to sell crude oil to Hess and to deliver the oil by ship to Hess's St. Croix terminal between October 25 and November 7, 1989.  [**2]  (Contract, Cl. EEE.) 1 Toyomenka provided the wording of the Contract. (Toyomenka Rule 3(g) Counterstatement, para. 2.)

The Contract provided that Hess would pay demurrage for the ship's laytime at the terminal. (Contract, Cl. JJJ, KKK.) The Contract fixed the rate of demurrage "as per charter party demurrage rate." (Contract, Cl. KKK.) On September 15, 1989, Toyomenka chartered the Edenburgh Fruid ("Fruid") to deliver the oil to Hess under a charter party which set daily demurrage at $ 17,500. (Toyomenka Ex. 2, Part I, Clause I.)

The Contract also included a force majeure clause, Clause QQQ, which reads as follows:

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771 F. Supp. 63 *; 1991 U.S. Dist. LEXIS 10116 **; 1991 AMC 2720

TOYOMENKA PACIFIC PETROLEUM, INC., Plaintiff, v. HESS OIL VIRGIN ISLANDS CORP., Defendant

CORE TERMS

force majeure, notice, demurrage, delivery, hurricane, terminate, cargo, arrived, refinery, argues, invoking, damages, ship, condition precedent, forty-eight, charter, delayed, excused, parties, storage, written notice, thirty days, crude oil, undisputed, laytime, seller, summary judgment motion, Hess Rule, occurrence, genuine

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, General Overview, Judgments, Motions for Summary Judgment, Appropriateness, Genuine Disputes, Legal Entitlement, Materiality of Facts, Trials, Judgment as Matter of Law, Burdens of Proof, Business & Corporate Compliance, Contracts Law, Contract Conditions & Provisions, Conditions Precedent, Contracts Law, Standards of Performance, Impossibility of Performance, Breach, Material Breach, Defenses, Admiralty & Maritime Law, Maritime Contracts, Types of Contracts, Torts, Remedies, Damages, Transportation Law, Carrier Duties & Liabilities, Demurrage