UAE court orders Dh63.8m refund after LPG shipment fails to arrive

The Sharjah Court has ordered a company to refund Dh63.8 million after finding that it breached a contract to supply 41,000 metric tonnes of liquefied petroleum gas (LPG), failing to deliver the shipment within the agreed deadline or provide the required shipping documents.

The court cancelled the sales contract and ordered the company to pay Dh63,819,327.81, representing payments it had received towards the purchase price, along with 5 per cent interest from the date the lawsuit was filed until full settlement.

The dispute arose from a contract under which the defendant agreed to supply 41,000 metric tonnes of LPG to the claimant for Dh112,214,155.63.

The agreement stipulated that the purchase price would be paid in instalments, including advance payments, further payments upon receipt of the bills of lading in the UAE, and a final instalment upon delivery of the goods at the port of delivery.

However, the defendant failed to deliver the goods within the agreed timeframe and did not provide the shipping documents required for the shipment to the UAE, prompting the claimant to seek termination of the contract and recovery of the money paid.

Lawyer Marwa Al Suwaidi, representing the claimant company, argued that the failure to meet the delivery deadline entitled her client to rescind the agreement and seek compensation for the resulting losses.

To support the claim, Al Suwaidi presented evidence that her client had entered into a separate sales agreement with another company for the same petroleum product covered by the original contract. The subsequent agreement included a penalty clause for delayed delivery.

After examining the evidence, the court found that the defendant had failed to fulfil its contractual obligations by not supplying the agreed goods within the stipulated period and not providing the required shipping documents.

The court consequently cancelled the contract and ordered the defendant to return the full amount it had received from the claimant towards the purchase price.

The refund was set at Dh63,819,327.81, with interest accruing at 5 per cent from the date the lawsuit was filed until full payment is made.