Court Dismisses $9 Million Trafigura Claim In Nigeria Force Majeure

LONDON -(Dow Jones)- A Paris arbitration tribunal has dismissed a $9 million claim by Trafigura Beheer B.V. against Indian Oil Corp. (530965.BY) in a Nigeria dispute, underscoring the risks tied to the country's frequent supply disruptions, according to a person familiar with the matter.

The disagreement between the European commodities trading firm and the Indian state-oil company stemmed from a one-month delay in a cargo delivery early 2008 after sabotage on a Niger Delta pipeline.

Trafigura had to postpone the loading after Royal Dutch Shell PLC (RDSB.LN) declared force majeure on Bonny Light exports. In doing so, it changed the price it charged to $101 million from $91.9 million as the Nigerian disruptions also led to oil-price rises.

But in a decision published Feb. 3, the tribunal at the International Court of Arbitration of the International Chamber of Commerce ruled that Trafigura should have kept the charged oil price at the originally planned time of delivery.

Trafigura declined to comment while IOC didn't return a request for comment.

IOC was represented by Zaiwalla & Co. Solicitors and Trafigura by Reed Smith LLP.

A spokesperson for Reed Smith said: "It's Reed Smith's policy not to comment on clients or matters."

"Please note, however, that the case to which you refer is subject to express terms of confidentiality between the parties in question," the spokesperson added.

A spokeswoman for Zaiwalla also declined to comment.

Though most militants behind oil sabotage disarmed late 2009, oil theft continues to be a source of disruption in the restive Delta.

By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; benoit.faucon@dowjones.com

(END) Dow Jones Newswires

February 25, 2010 03:37 ET (08:37 GMT)

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