The Lawyer Top 20 cases 2015: Clyde & Co client Glencore to pay $40m to Petrom over crude oil “deceit”

Clyde & Co client Glencore International has been ordered to pay $40m (£27m) to Romanian oil companies Petrom and Petrolexportimport for fraudulently shipping low-quality crude oil to Romania in the 1990s.

Withers client Petrom put in a $100m claim before Mr Justice Flaux in the Commercial Court over claims it received 32 cargoes of blended cheaper and heavier crude oils in a deceit backed up by falsified documents.

The case featured in The Lawyer’s Top 20 Cases of 2015 (19 January 2015).

Flaux J ruled on Friday (13 March) Glencore had profited by around $40.1m from the “deceit”.

Glencore’s legal team, led by 7KBW’s Richard Southern QC and Brick Court Chambers’ Fionn Pilbrow, who were instructed by Clyde & Co partner Hatty Sumption, have announced they will appeal the ruling.

Petrom and Petrolexportimport were represented by 20 Essex Street’s Duncan Matthews QC, Andrew Fulton and Luke Pearce, instructed by Withers’ head of civil fraud Stephen Ross and Madalina Dumitrescu.

The fraud was reported in 2002 by a Glencore whistle-blower who advised Petrolexportimport to question to quality of the crude oil cargoes. Flaux J said in his judgment the trader in question “revealed that the 32 cargoes were not what they purported to be”.

Glencore contended in defence that Petrom’s claims are time-barred, and that the company is not the successor in title to the Romanian companies, which received the cargoes.

The dispute goes back more than a decade and has been the subject of two arbitration proceedings. An attempt to pursue the claim as a breach of contract in arbitration was thrown out by Mr Justice Blair in February last year. Petrom filed the lawsuit against Glencore in the UK in 2008.

The legal lineup:

For the claimant, OMV Petrom SA & SC Petrolexportimport SA

20 Essex Street’s Duncan Matthews QC, Andrew Fulton and Luke Pearce, instructed by Withers partner Stephen Ross

For the defendant, Glencore

7KBW’s Richard Southern QC and Brick Court Chambers’ Fionn Pilbrow, instructed by Clyde & Co partner Hatty Sumption