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Summary and Facts
CE Energy DMCC v Bashar CE Energy DMCC v Ultimate Oil & Gas DMCC [2026] Lloyds’s Rep 267 concerns on CE Energy DMCC sold gasoil and jet fuel to Ultimate Oil & Gas DMCC (“UOG”) between 2022 and 2023 under several spot contracts and a later term contract. Ultimate failed to pay all sums due, including price, interest, and demurrage. In January 2024, both parties signed a Payment Agreement where Ultimate admitted the debts and agreed to repay in instalments. To secure that, a personal guarantee also given by Bashar. CEE then supplied one further cargo. UOG later defaulted in payment. CEE then demanded about USD 34.7 million from both Ultimate and Bashar under the guarantee and UOG for payment of the final cargo supplied under a new spot contract. CE Energy applied for summary judgment before the English Court, even though it had not yet obtained any arbitration award or prior judgment against Ultimate.
Legal Issues
- Whether the guarantee a demand guarantee or a surety guarantee.
- Whether UOG’s admission of debt in the Payment Agreement binding.
- Whether CE Energy can sue for the price of goods even though title in the goods had been retained under the contracts.
- Whether the defendants have the realistic defences to avoid summary judgment.
Court’s Findings
- The Court held that the guarantee was not a demand guarantee, but a contract of suretyship.
- CE Energy had to prove UOG was in default but did not need first to obtain an arbitral award of court judgment against UOG before suing Bashar.
- UOG had “irrevocably admitted” the outstanding sums in the Payment Agreement where the court treated this as contractual estoppel (a binding promise preventing UOG and guarantor from denying the debts later.)
- CE Energy could still sue for the price although the title to the oil had been retained because the payment was due on a fixed date, satisfying section 49(2) of the Sale of Goods Act 1979.
- The defendants’ arguments about incorrect allocation of payments, demurrage, and interest had no realistic prospect of success.
Practical Implications
This judgment affirms the several principle of laws including:
- Not All “On Demand” Guarantees Are Demand Guarantees.
- Personal Guarantees by Directors Carry Real Risk.
- Settlement Agreements Can Lock You In.
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